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Having reasonably proven success in long stocks trading, we plan to apply our coaching now to bearish strategies and timing.
We will also watch securities we have recently exited trades in for signs it may be time to re-enter a trade (eg after a correction; bullish -or- after a rally; bearish). Watching takes little time, but when the trend is broken for the criteria (bullish or bearish) we’ll drop the symbol after a while.
Stocks that break their trend beyond a normal correction, or Industries that develop a reverse trend will cause a stock to be removed from the watch list.
We have been using more advanced technical analysis to do trading in this relatively flat market of the last few years.
We have added the Slow Stochastic (80,20) as another technical indicator we use for decision and confirmation of entry and exit points. Here a green arrow is a positive crossing or an upturn and a red arrow is a negative crossing or a downturn.
We look to 90-minute intervals to anticipate moves on the
daily chart, and to the weekly chart looking for
longer term trade entry points. We have observed that on the 90-minute
intervals there are about 3 cycles of technical indicators for each
daily up or down signal. This is helpful for anticipating signals
on the slower daily scale. The same principle applies from the
daily to the weekly intervals.
We are active in the market during the day and make decisions
intra-day. We generally make buy decisions near the end of the
day based on the technical signals the toolbox tells us to use for the
next day...
We qualify a Short List from the Watch List based on buy-qualified
stocks that are about to present buy signals. We confirm these
qualifiers intra-day and generally buy near the close of the market
given entry conditions met during the day. We will short-list a
stock for 2-5 days and re-evaluate the short list in mid-week.
Short List Qualifiers:
Entry Condition:
Short List Qualifiers:
Entry Condition:
Exits are generally from stops, but in a flat and channeling market
we will be willing to take profits when things look towards reversal.
Stops are evaluated/adjusted upon new entry signals and upon
technical reversal signals.
Our investing portion of the portfolio is divided by about 59%
retirement (14% ROTH) and the rest in Rollover, and 41% savings (13%
reserved for Options strategies). Of the retirement funds 100% of
the ROTH and 60% of the rollover is allocated for ETF related trades
while the rest is for single stock trades and other strategies.
We have been dividing our stock purchases into roughly equal parts,
and generally entering trades with about 1/2 part. If the trade
takes off we may increase the stake to a whole part, if the trade does
not take off then we can exit. This complies more or less with
the 3% rule (don't risk more than about 1-3% loss on any single trade)
and the 10% rule (don't risk more than 10-15% of portfolio on any 1
trade).