I'm struggling to find the right entry point for KISS system
trades. Have set my favorites but when I receive an email
alert, more often than not the stock has already made a big move.
That makes me hesitate. Yesterday for example, I received an email
for JD after it moved up 15% on the day. Today it gapped higher
again on the open. Chasing those type of moves does not sit
well with me, even ones with a smaller % move at the outset.
I understand KISS is a trending following system identifying
stocks that may move higher for months, but the initial entries
seem exceedingly high relative to the initial STS. I struggle
making the adjustment since my plays for years have been tied to
BPT trade ideas, the majority of which rely upon a breakout from a
pattern.
again guys...read my post, you don't always want to do that,
depends on what triggered the entry - for washout and ABC entries I
wouldn't bother waiting because those are already very good entries
and you might not get a chance as it could just continue running.
But you should always look at various time frames regardless
just to make sure it fits you
Also - remember you can see the % away from the STS, if it's too
far like 15% or something, yeah, but if it's pretty close that's
not high risk
The tables are not telling you what triggered the trade entry,
that said, you can tell if it's one of the wider entries via a
confirmation over the ATR because those tend to be a bit extended.
Washout entries occur after a big candle reversal one day off
the bottomafter a big sell off. And ABC entries occur generally
well below the ATR price, so that's kind of how you can
tell, and the ATR is listed on the table where price is relative to
it. The wider entries occur OVER the ATR
I mocked up the daily QQQ KISS for the last 3 entries to show
the last 3 entries and the % away the entry was from the initial
stop, as well as what triggered the trade (no washout triggers only
ABC and ATR confirmation trades)
The first long back in March of last year was entered via the
ABC 3-wave pullback logic. The initial stop was 4.6% from entry,
but again that was the swing low so make sense via a daily time
frame for hte stop to be there
the long from Oct 31st last year same thing, entered via the 3
wave ABC logic, and that entry was only 2.4% above the stop, quite
tight
the whipsaw trade in Aug/Sept was entered via the ATR
confirmation break, remember the stops tend to much wider on those
per my discussion before, the stop was 5.9% from entry. I
don't think that's what caused that to be a losing trade, it's a
trending system, and the way markets trend you very rarely get 2
back to back trending moves, generally after a trending move you
get a consolidation or whipsaw.
again you can read my discussion from earlier
Daily charts are going to have wider stops because things like
the previous swing lows are used. The KISS system ran on something
like a 130 min chart smaller time frame is obviously going to have
a might tigher stop, just common sense.
The system uses multiple average true range calculations that
can and off to each other at different times in the trend, it's all
in the FAQ, I'm not going to list all of them
I've said that the ATR is an exponential one, meaning the most
recent days have more of a weighted effect on the current reading,
so if a 14 length was used, the last 2 days have more of an effect
on the ATR than the previous ones - basically not all days are
equal weighted
and again the KISS systems can be used as full systems from
entry to exit
or they can be used as half systems, a trade management tool
basically. For example stocks or ETF's you already own that you
bought for some other reason, and you wanted to use the system for
the stop management too. You didn't enter because of the
system, but now that your trades are nicely profitable, you might
decide to use the stops suggested by the system, hence a 1/2 system
or management tool
Posted by DigiNomad on 12th of Mar 2024 at 02:47 pm
If your trading plan requires a 2 to 1 setup, a 6% stop requires
a 12% gain. That's pretty hard to come by so I wait for stops
that can be set in the 2 - 3% range...which is also hard to come by
if you sort the STS tables by the distance to the STS.
DigiNomad - I wanted to respond to your comment from earlier
If your trading plan
requires a 2 to 1 setup, a 6% stop requires a 12% gain.
That's pretty hard to come by so I wait for stops that can be
set in the 2 - 3% range...which is also hard to come by if you sort
the STS tables by the distance to the STS.
I understand your point, but first off as I showed earlier, a
lot of the initial stops are not that wide, 3% or 5%. yes there's
some with 6% etc depending on what long condition triggered the
entry (washout and ABC's are very tight stops, while ATR confirm
breaks are wider)
However, your trade philosophy of targeting 2:1 or 3:1 trades
where you are trying to target 2X your risk or 3X your risk is
something very common and what a lot of traders do and something I
employ as well.
That said, the system is not trying to exit after a 2:1 or 3:1
target has been achieved. The system holds trades for as long as
possible and tries to stay in uptrends as long as possible, it
doesn't exit on an arbitrary target. The system may exit after a
2:1 move however it captures a lot of trades where it manages to
get 10:1 or 20:1 or more, way beyond a 2:1 or 3:1. It's not
looking at 2:1 or 3:1, it's simply trying to stay in the trend as
long as it lasts, which could be short, or go on for weeks and
months.
heck just looking at the QQQ chart I posted earlier, the entry
in late Oct where the stop was only 2.4% away from the long entry,
if one had taken a 2:1 or 3:1 target, they would have been out of
the trade within a week and missed 90% of the rally.
The trade with the initial risk from the stop is now at a 13 to
1 target to risk ratio. When the system went long QQQ's in Oct, the
stop was about 8 points from entry, and the trade is up 102 points
now 102 /8 = 12.75, that's way beyond a 2:1 or 3:1 and that's
pretty common with a lot of the system trades when it catches
runners. I see trades that are up 20:1 and 30:1
looking at the system as 2:1 and 3:1 doesn't really make sense
here
could we make a version of the system again that takes profits
like that? Yes and we may do something like that in the future, as
I've stated, these systems are only going to get better and better
with new tools and systems added over time
Posted by DigiNomad on 13th of Mar 2024 at 10:14 am
Thanks for this, Matt. The systems are great and there are lots
of ways to implement them in a personal trading system. I trade
full time these days so the wider stops are less useful than they
used to be (I have time to use tight stops and play for a reset
when they get hit), but I find the sortable spreadsheet aspect of
the systems page to be extremely useful. I regularly sort by
distance to STS and the demark count to find targets that might be
starting at a move or potentially ending one (I would rather not
buy something at a Demark 7, etc).
probably, but that's pretty low priority to me, something to do
later on. One thing I was thinking about adding to the table was
the earnings date and to automatically have the website to email
you if one of your favorites have an earnings date coming up, to me
that's pretty useful and a great reminder to people to alert then
of earnings so that they can make a determination on if they are
going to hold into earnings or not. But like anything, when we
looked into getting that data, it's would cost us $200 a month for
the data
Posted by mastermind on 12th of Mar 2024 at 02:56 pm
Yes, similar if it is extended from moving averages. If it pulls
back to support, add an equal amount. If it holds steady or starts
moving higher instead, add 50-60% more.
Posted by DigiNomad on 12th of Mar 2024 at 02:34 pm
Once I identify a target based on the KISS system buy alerts
(daily timeframe), I switch down to a lower time frame in order to
identify an entry point. Like you, the stops are usually too wide
for my trading style at the trigger point in the KISS systems. If I
want something badly, I'll switch to a 10 minute and wait for a
touch of the 20. If I'm on the fence, I might use a 2 hour chart
and wait for a touch of the 20.
good points and practice, I always state that I'm looking at
smaller time frames as well for better entries
that said
it's important not to paint all the stops being too wide from
the initial entry. yes some are quite wide, but others are not
at all, it depends on what triggered it going long.
I find that the washout longs have very good entries and logical
stops, but those trades are rare
The other entries that are really good are the ABC 3 wave
pullback entries - that's what enabled the system to go long just a
couple days off the lows on many things back in late October or
early November, with stops at the low.
the trades that occur over a confirmed ATR break, those tend to
be much further from the stop
so again, it depends on the stock and what trade condition
triggered
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I'm struggling to find the
Posted by RichieD on 12th of Mar 2024 at 02:30 pm
I'm struggling to find the right entry point for KISS system trades. Have set my favorites but when I receive an email alert, more often than not the stock has already made a big move. That makes me hesitate. Yesterday for example, I received an email for JD after it moved up 15% on the day. Today it gapped higher again on the open. Chasing those type of moves does not sit well with me, even ones with a smaller % move at the outset.
I understand KISS is a trending following system identifying stocks that may move higher for months, but the initial entries seem exceedingly high relative to the initial STS. I struggle making the adjustment since my plays for years have been tied to BPT trade ideas, the majority of which rely upon a breakout from a pattern.
Any suggestions?
You can just wait for
Posted by srusso1 on 12th of Mar 2024 at 02:39 pm
You can just wait for a pull back then get in use the STS. I did this for PATH so far so good you just trust the systems but put in the stop.
again guys...read my post, you
Posted by matt on 12th of Mar 2024 at 02:43 pm
again guys...read my post, you don't always want to do that, depends on what triggered the entry - for washout and ABC entries I wouldn't bother waiting because those are already very good entries and you might not get a chance as it could just continue running. But you should always look at various time frames regardless just to make sure it fits you
Also - remember you can see the % away from the STS, if it's too far like 15% or something, yeah, but if it's pretty close that's not high risk
The tables are not telling you what triggered the trade entry, that said, you can tell if it's one of the wider entries via a confirmation over the ATR because those tend to be a bit extended. Washout entries occur after a big candle reversal one day off the bottomafter a big sell off. And ABC entries occur generally well below the ATR price, so that's kind of how you can tell, and the ATR is listed on the table where price is relative to it. The wider entries occur OVER the ATR
I mocked up the daily
Posted by matt on 12th of Mar 2024 at 04:18 pm
I mocked up the daily QQQ KISS for the last 3 entries to show the last 3 entries and the % away the entry was from the initial stop, as well as what triggered the trade (no washout triggers only ABC and ATR confirmation trades)
The first long back in March of last year was entered via the ABC 3-wave pullback logic. The initial stop was 4.6% from entry, but again that was the swing low so make sense via a daily time frame for hte stop to be there
the long from Oct 31st last year same thing, entered via the 3 wave ABC logic, and that entry was only 2.4% above the stop, quite tight
the whipsaw trade in Aug/Sept was entered via the ATR confirmation break, remember the stops tend to much wider on those per my discussion before, the stop was 5.9% from entry. I don't think that's what caused that to be a losing trade, it's a trending system, and the way markets trend you very rarely get 2 back to back trending moves, generally after a trending move you get a consolidation or whipsaw.
again you can read my discussion from earlier
Daily charts are going to have wider stops because things like the previous swing lows are used. The KISS system ran on something like a 130 min chart smaller time frame is obviously going to have a might tigher stop, just common sense.
I know I’ve asked this
Posted by Glad on 12th of Mar 2024 at 02:50 pm
I know I’ve asked this before can you share the ATR settings that you use?
The system uses multiple average
Posted by matt on 12th of Mar 2024 at 02:56 pm
The system uses multiple average true range calculations that can and off to each other at different times in the trend, it's all in the FAQ, I'm not going to list all of them
I've said that the ATR is an exponential one, meaning the most recent days have more of a weighted effect on the current reading, so if a 14 length was used, the last 2 days have more of an effect on the ATR than the previous ones - basically not all days are equal weighted
and again the KISS systems
Posted by matt on 12th of Mar 2024 at 02:49 pm
and again the KISS systems can be used as full systems from entry to exit
or they can be used as half systems, a trade management tool basically. For example stocks or ETF's you already own that you bought for some other reason, and you wanted to use the system for the stop management too. You didn't enter because of the system, but now that your trades are nicely profitable, you might decide to use the stops suggested by the system, hence a 1/2 system or management tool
again lot of ways to skin the cat
If your trading plan requires
Posted by DigiNomad on 12th of Mar 2024 at 02:47 pm
If your trading plan requires a 2 to 1 setup, a 6% stop requires a 12% gain. That's pretty hard to come by so I wait for stops that can be set in the 2 - 3% range...which is also hard to come by if you sort the STS tables by the distance to the STS.
DigiNomad - I wanted to
Posted by matt on 12th of Mar 2024 at 08:21 pm
DigiNomad - I wanted to respond to your comment from earlier
If your trading plan requires a 2 to 1 setup, a 6% stop requires a 12% gain. That's pretty hard to come by so I wait for stops that can be set in the 2 - 3% range...which is also hard to come by if you sort the STS tables by the distance to the STS.
I understand your point, but first off as I showed earlier, a lot of the initial stops are not that wide, 3% or 5%. yes there's some with 6% etc depending on what long condition triggered the entry (washout and ABC's are very tight stops, while ATR confirm breaks are wider)
However, your trade philosophy of targeting 2:1 or 3:1 trades where you are trying to target 2X your risk or 3X your risk is something very common and what a lot of traders do and something I employ as well.
That said, the system is not trying to exit after a 2:1 or 3:1 target has been achieved. The system holds trades for as long as possible and tries to stay in uptrends as long as possible, it doesn't exit on an arbitrary target. The system may exit after a 2:1 move however it captures a lot of trades where it manages to get 10:1 or 20:1 or more, way beyond a 2:1 or 3:1. It's not looking at 2:1 or 3:1, it's simply trying to stay in the trend as long as it lasts, which could be short, or go on for weeks and months.
heck just looking at the QQQ chart I posted earlier, the entry in late Oct where the stop was only 2.4% away from the long entry, if one had taken a 2:1 or 3:1 target, they would have been out of the trade within a week and missed 90% of the rally.
The trade with the initial risk from the stop is now at a 13 to 1 target to risk ratio. When the system went long QQQ's in Oct, the stop was about 8 points from entry, and the trade is up 102 points now 102 /8 = 12.75, that's way beyond a 2:1 or 3:1 and that's pretty common with a lot of the system trades when it catches runners. I see trades that are up 20:1 and 30:1
looking at the system as 2:1 and 3:1 doesn't really make sense here
could we make a version of the system again that takes profits like that? Yes and we may do something like that in the future, as I've stated, these systems are only going to get better and better with new tools and systems added over time
Thanks for this, Matt. The
Posted by DigiNomad on 13th of Mar 2024 at 10:14 am
Thanks for this, Matt. The systems are great and there are lots of ways to implement them in a personal trading system. I trade full time these days so the wider stops are less useful than they used to be (I have time to use tight stops and play for a reset when they get hit), but I find the sortable spreadsheet aspect of the systems page to be extremely useful. I regularly sort by distance to STS and the demark count to find targets that might be starting at a move or potentially ending one (I would rather not buy something at a Demark 7, etc).
Would it be possible to
Posted by bulf6285 on 13th of Mar 2024 at 09:14 am
Would it be possible to add the long condition that triggered the trade to the tables?
probably, but that's pretty low
Posted by matt on 13th of Mar 2024 at 09:26 am
probably, but that's pretty low priority to me, something to do later on. One thing I was thinking about adding to the table was the earnings date and to automatically have the website to email you if one of your favorites have an earnings date coming up, to me that's pretty useful and a great reminder to people to alert then of earnings so that they can make a determination on if they are going to hold into earnings or not. But like anything, when we looked into getting that data, it's would cost us $200 a month for the data
earnings date and to automatically
Posted by srusso1 on 13th of Mar 2024 at 09:32 am
earnings date and to automatically have the website to email you if one of your favorites have an earnings date coming up That would be awesome.
again then enter your trades
Posted by matt on 12th of Mar 2024 at 02:53 pm
again then enter your trades on your own, and later on after the stock has been uptrending well, use the system stops then
I also see MDLZ triggered yesterday, was only 2.35% away from the stop, EXPE was 4%
I always add in pieces
Posted by Glad on 12th of Mar 2024 at 02:35 pm
I always add in pieces do partials in the beginning and add as it pulls back towards The STS stop hopefully improving your price
I’m sure some of the other members will share their approach Good luck
Yes, similar if it is
Posted by mastermind on 12th of Mar 2024 at 02:56 pm
Yes, similar if it is extended from moving averages. If it pulls back to support, add an equal amount. If it holds steady or starts moving higher instead, add 50-60% more.
Once I identify a target
Posted by DigiNomad on 12th of Mar 2024 at 02:34 pm
Once I identify a target based on the KISS system buy alerts (daily timeframe), I switch down to a lower time frame in order to identify an entry point. Like you, the stops are usually too wide for my trading style at the trigger point in the KISS systems. If I want something badly, I'll switch to a 10 minute and wait for a touch of the 20. If I'm on the fence, I might use a 2 hour chart and wait for a touch of the 20.
good points and practice, I
Posted by matt on 12th of Mar 2024 at 02:38 pm
good points and practice, I always state that I'm looking at smaller time frames as well for better entries
that said it's important not to paint all the stops being too wide from the initial entry. yes some are quite wide, but others are not at all, it depends on what triggered it going long.
I find that the washout longs have very good entries and logical stops, but those trades are rare
The other entries that are really good are the ABC 3 wave pullback entries - that's what enabled the system to go long just a couple days off the lows on many things back in late October or early November, with stops at the low.
the trades that occur over a confirmed ATR break, those tend to be much further from the stop
so again, it depends on the stock and what trade condition triggered