SD- 2021- ACTIVE MANAGEMENT FOR GREATER SUCCESS IN 2021

[sd]

A Plug for WWW.Stockmarketmentor.com-
The 30 day free trial offers access to the website, Daily Forum, and education videos-
A good opportunity to try out the website, check out some of the forum trades and watchlist trades, but I like the video content in the Education section-
Many of the videos were done years ago- but the message is pretty consistent- Position sizing, Risk control- setting stops- Don't take a big loss-
There are a number of different types of traders on the website forum- some are chasing bitcoin- but some are also looking for being more mainstream -
The focus is primarily on individual stocks, with a few ETFs occasionally in mention-
My 30 day temporary period is likely Close- and i think my focus is more to be overweighted on ETFs- but the site has delivered some good stock trades that would have paid for the subscription- I foresee that I will ideally be spending less time involved in the markets and more time living in the months ahead- but I may continue the active subscription for the 1st month- and check out some of the individual stock picks they highlight on a day to day basis. But stocks will remain a minority position for me - but they have noted a number of strong outperformers ....

For the reader- The Value of the website is that the Host - Dan- wants to be a mentor- not a stock GURU- and so he has put forth a lot of information to help those wanting to learn his version of TA applied to price movements- and to stay essentially on the right side of the trend-
I've only viewed a small portion of the video content he offers- Position sizing, moving averages, trendlines etc, and it's solid stuff to know and apply. There's a lot there to take advantage and view and perhaps incorporate-
I note that he is willing to give Price in a winning position more room for volatility than I am inclined to do- But that's trading-
I also like the knowledge of Tom Bowley- but I certainly find the SSM mentor site much more interactive- and trader oriented.




Note that the majority of the videos are dated, but often the message applies across time for the TA trade-
Check out the "Taking Losses" video-1st- and move on from there-
Some of the other intro videos - moving averages, trend lines etc - are all essentials-
Plenty of videos to review - and overall- Dan presents a pretty consistent approach to his entries, exits, take losses, take profits- and for further TA chart education- you can't beat the offer of 30 days of a free trial.

{Position sizing, moving averages, trend lines etc-

[ira85]

SD mentioned he plans to spend more time living and less time following the market near term. We all have competing issues calling to us. Surprisingly I think I'm spending too much time following the market. I am amazingly slow. I move at sloth speed. The post I put up March 12 took me about 5 hours start to finish. I'm awe struck by how much work SD does and how much he posts. Amazing! Too bad we don't have more young/new traders on this board who could benefit from the dynamite stuff SD is explaining. SD suggested watching videos from stockmarketmentor.com/free-chart-videos/
I've spent only a little time on that site, but it sounds like a great resource with the potential to change a person's life.

Change a person's life? Yes! We ALL make decisions that have tremendous potential to dramatically change our lives. Getting started in an Individual Retirement Account is a big one. Learning to manage that account is another series of decisions. I started contributing to an IRA at age 35. Good step. I read a lot about investing in mutual funds. The importance of being a long term holder of mutual funds and avoid making frequent changes was often encouraged. Be consistent was the advice in most financial magazines. I had no systematic plan for managing my IRA other than Buy and Hold. My IRA was way under invested. Missed out on huge bull market gains. That IRA grew only a little over 30+ years. On this board I've learned that Buy and Hold exposes you to the risk of losing 50 to 80% of your account in a bear market. Learning to use a system for technical analysis and trading can greatly reduce market risk. The trading skills SD is talking about would reduce risks of being overly aggressive and/or too defensive. Learning how to use position sizing and following the trend, those 2 skills alone applied over a long period would most likely make a huge benefit in a person's IRA growth.

Also career decisions make a huge difference. For example, I used to work with a guy who changed careers. He was a college professor. Had a PhD in English. He liked his work, but knew he was going to make teacher's wages and he'd most likely never make much money. He made the big decision, went back to school and became a physician. He said it was a great decision. People make big decisions all the time. For example, lots of kids don't have much interest in school, don't work hard, and don't develop the kind of work habits and attitudes to get into a high paying career. I know a guy who was on that path, realized it was a dead end, and got motivated to become an electrician. He has a good job now and is glad to have it.

If you have more than five years left to manage your savings and investments you'll need in retirement you could benefit from SD's experience. To learn how to manage your IRA and other investments, I'd follow SD here and watch the videos and books he recommends. Its a lot of work, but its also a big benefit. - ira

[sd]

Thanks for the kind words and I also appreciate you sharing your investing experience , insights, and honesty-
To your point about having started investing at a relatively early age -35 years- but conservatively -mid 80's - Mutual funds dominated and fund and stock management back through most of the 1990's was done by the professionals- at quite a high fee- as you likely are aware- Between the commissions, the expense ratios charged , and the "Other fees" and kickbacks- The mutual fund industry likely captured 40% of your total investment returns in fees charged, while taking none of the Risks. I started much later- with Edward Jones who charged a 5.75% commission to purchase funds- and when I started stock trading through them in the late 1990s- charged $50 per transaction plus $1 for every share purchased! Compared to todays low cost ETFs options and now "no commissions", the higher cost of underperforming mutual funds -and hedge funds- is seeing a huge transformation- all to the advantage of the individual- But what is lost for the self directed and active investor is the "stay the course" and gradually get conservative approach that professional managers encourage. Over the long term, that consistent monthly investing approach has delivered returns- perhaps not huge- but has seen the investment monies compounding over time-
Active investors- such as myself- tend to Buy high and sell low- reacting late to get into a trade, quick to take small profits, and slow to sell a loser- and so the average active investor underperforms the investor that pays higher fees using a financial adviser- This is also precipitated by today's trading platforms that encourage active trading as a retirement plan- So, I would add here that one should have a core retirement strategy-preferably diversified and in indexes, that one adds to every month with regular contributions- and "trading" should be done with a smaller separate account-
I think some TA understanding of charts and trends- and perhaps a strategy to shift those assets on a breakdown of the market's rotation, is prudent- And when All of the indexes are declining with prices falling lower and going below the 50 ema- that's a good time to be moving assets that have had gains into safety- but that's hard to time successfully- as a 10% pullback may appear to be the beginning of a big decline and as one exits, the market rallies higher- since shallow pullbacks are far more common than the deeper 20% -40% declines- Tough to time those except in hindsight- And index investing has shown that purchasing shares during pullbacks (such as in one's monthly retirement contribution) eventually has proven to be "Buying the Dips" that has been rewarded since 2009 in this Bull market-
But not so much prudent buying during the Tech decline in 2001-03 taking - Dead money- but a shift in assets into what was working - such as Brian Livingston's "Muscular Portfolios" would have been the much smarter approach.
Brian Livingston's simple approach - Identifying the best performers over a period of months- and shifting that strategy to invest conservatively when the market's go into a significant decline- is a good starting point IMO-

Recognizing that a secular shift is underway only comes when what was once working well no longer is doing so- Value has been out of favor for a decade, and Growth has been the place to be- and Tech has outperformed the market for the past 4 years- eventually will again regain it's status- but the temporary shift is presently into Value-, infrastructure plays, recovery- so that's drilling down and finding those areas with upside momentum-
Meanwhile, tech gets a revaluation at a lower price, EEM getting discounted, and perhaps the pendulum swing will push the present day winners too far as well to the upside as everyone shifts into them.

Your comments about life's choices- Truly, today's choices are evolving to the idea that one may not have just a single career- Consistently learning and the ability to transition as the new world technological advances will prove very disruptive across many occupations- and long term survival requires the ability to acquire additional skills and be adaptive-Particularly in the private markets- I ended up on a relatively decent blue collar career as a construction Supt because I raised my hand on a jobsite and said- "YES, I've taken a class in reading blueprints-" -That simply opened a path that -combined with a good work ethic, and the willingness
to learn new things and "grow' - and transition from Blueprints to an I-Pad- - all kept me steadily employed for the past 35 years through economic booms and declines-
Yes, I spent the early years dragging my family across the Country like a fruit picker going where the crops were- but fortunately the projects were several years in duration- Deciding to get off the conestoga wagon train and get a job with a local construction company when the last project in Chapel Hill,NC completed, proved to be the best decision I made for myself and my family....Took a paycut - Made lesser money based on the wage scale for construction in the area, but never regretted the decision. Worked for a family owned firm that kept it's doors opened and also had work consistently through thick and thin times- There's been a lot of changes, but a lot of opportunity- That fellow you know that chose to become an electrician can have a life long career-
So many young people have racked up huge student debt -some 50% I understand will not get a job in the career they intended- and also- employers today expect to see a lot of mobility amongst employees that will have more than one career path in their lifetime-

So , a lot of more rapid changes are underway as our society moves forward- individuals today need to be willing to adapt to those changes- but investing 1st and trading 2nd should be one of those- I think the get-rich- quick Spac, Gamestop mentality will give today's younger investors a distorted view of what investing is supposed to be- Even a Robo adviser firm like Betterment would be a low cost alternative and provide a consistent market approach- Being so active in the market can give a one sided view- not seeing the bigger picture- for the long run.


Sorry that your condition takes so much effort to complete certain tasks- I would hope that some of the medical advances we are seeing would find an improvement to dealing with Parkinson's impact on your life-
On the prior page I did recommend that you consider reentering DBA-

It's been a busy weekend, little time spent on trading or investing-

[sd]

3-15-21
Markets up slightly-including tech-
Concerns about the new Tax policy that the Biden admin may suggest affecting the rich will cause a sell in the markets to lock in lower taxes that we presently have?
Heard that mentioned on CNBC as a possible result?

A quick morning look-Tech is still up this am, small gains in Ark funds, CNBS, while the conventional recovery plays are down slightly....
I'm presently holding minimal tech, and a higher allocation towards the recovery, industrials, including holding OUSM- O'Leary's div fund for small caps

In thinking about the difficulty in keeping stops tight- 4-8% on an ideal Entry- Difficult to do , unless one gets a really good entry coming off a pullback swing Low or in a base- Or early in a breakout- or perhaps on a pullback from the breakout- Particularly if something one is buying is often volatile-- Here's a chart of AIA, and it's often volatile- How can I define a good, a better, and a Best Entry?
This is something I have been heading towards as I tend to view price now on a faster 4 hr, 2 hr time frame along with the daily- Particularly if things are more volatile.

1st- understand that in the fast time frame chart , the 10 & 30 emas used in this example are much faster than the 10 & 30 on the Daily charts.
But the general principles are valid-
If the moving averages are in decline, price is downtrending- and a potential entry would be on a change in the Down trend, which is 1st accomplished
by a price move above the declining moving averages.- The 1st move higher often fails - but it provides a potential Buy signal- particularly in a pullback on an actual uptrend on a daily chart. The definition of an uptrend is a series of higher highs and higher lows, so targeting a low risk entry from a swing low pullback starts with identifying what is the trend.

The AIA chart- In Jan , Price was in an uptrend, hit a high Jan 25, price dropped below the slower ema, that was still a higher low- but a warning .
On the 27th ,28,29, price tried to base but dropped to a new lower low Jan 29. This was followed by a 1st reversal of the downtrend on the 1 hr chart but really a (pullback) on the larger time frame. The FEB 1 higher move above both moving averages would have presented a potential 1st reversal move to Buy @ the higher $96.50 Close - If one entered Feb 1 early @ $96.50 - perhaps with only a partial 1/2 entry- the stop loss would have to be set below the prior day's swing low price @ $93.00 As price continues, it has a pullback - call it a swing low on this time frame- and price then moves higher - a couple of trend lines may be overkill- but provide a good reference- but when price declines and the fast ema turns down through the slower- a potential pullback may be underway. Note that this is followed by a move higher- above the declining emas, but it is a lower high- By this time, the stops should have been brought up to breakeven- and raised to below the swing low $99.00

Note the decline that follows- Price tries to make a rally higher Mar 1 with a close above both declining moving averages- that would seem to suggest a reversal of trend was underway- so one would have tried to Buy that reversal @ $97 with a stop @ $94 - but this 1st reversal try saw a pullback the following day, preventing the fast moving average from crossing above the slower. - This actually provided a good low cost Risk to enter the following day on the bullish open $97.50 with a stop-loss at $95.50 below the higher swing low Mar 2 made. The trade fails, gets stopped out, and declines further-Note there was no buying Volume or accumulation on the AD line AT the Mar 8 92 low, big volume buying comes in . Price moves higher the next day, followed by a yet higher swing low - Buying the Mar 11 upmove with 1/2 the position seems a good early buy- and then adding at the pullback -higher swing low- to get a full position on at a relatively low Risk trade.
This swing low today $93.90 as an entry add also gives a lower Risk to the $91.00 stop-loss under the primary swing low made 3-8 - about a 3% RISK.

This is also a lower Swing low than the prior Jan 29 - swing low- so we have 2 lower lows and it's critical to watch the present price try to make a higher high., or the trend could continue even lower. I have a full AIA position on now. The Ema's are downtrending on the daily chart -below the uptrending 50 ema so that goes against my grain- but I'm trying to get more tactical in my trading as well as diversified.
On the Daily chart, price appears to be basing, exceeded the PSAR and generated a Buy signal....
NICE POP IN THE CNBS POSITION_ Today thanks to Gov Cuomo of NY announcing the intent to get regulation/ legalization done this year.
OLED trade working higher -Back in @ $223.85 2 other trades flat FLR_ recovery construction- and LLNW flat.
Time to get outside- Rain tomorrow-






CNBC is talking that 10% of the stimulus checks will go into the market - talk about a potential inflow!

ADDING IIPR - Reit focused on Pot properties. Watching to add a partial position- 5 share entry this pm as it is pulling back on the 5 min chart.
I presently have a Buy-stop @ $194.00 -194.10 that was put in above Price @ $193.00

It was interesting to consider this trade on the fast 5 min time frame- Later in the day I thought that if the Pot trade was doing so well, the IIPR Reit would also benefit- It was the afternoon, the price had hit a $196.49 but was declining under the fast ema- I set the initial Buy-stop order- and reduced the order size to just a 5 share initial entry- The $194 buy stop order did not get filled, price based sideways @ $193.30, and then declined lower- Price dropped down to $191.50 and as I went to change my order from a buy-stop to a market buy, price reversed higher and I got a $193.00 fill. Interesting experiment to watch it on the fast 5 min chart- Potentially, if this was a less expensively priced purchase, and done with some size, identifying a $1 -$2 dollar difference in an entry might add up to a net -2-4% price improvement-. Buying this at the open would have been the best fill though.\


Added to the KURE position -Asia- with Asia closing higher... eem up slightly at the Close. vwo

Started a fresh JETS position-
Added to GNOM position-

Markets Closed higher - Tech up 1.12% nice gains in Van Roth with the higher tech names- gaining today.
Waiting for some unsettled cash to clear-
I also rolled over into the Van IRA the final $18k from my employer IRA> - Those funds are not yet available to Buy with.May take several days?

MRNA gave a Green bar on the Daily for considering a small position tomorrow it's up 4.88% in 1 day, well above the Mar 9 swing low.
Several analysts think the RNA approach can lead to wider medical break throughs- I got whipsawed out of this a week ago.

Morgan Stanley is downgrading small caps IWM here-as being over extended. but thinks the small caps 600 are better positioned.
I think they assume we will see a pop still higher with the stimulus.... but the small caps have been big out performers of late.

[sd]

3-16-21


Got some cash freed up -In the IB trading account:
Presently I have 200 shares of CNBS- avg cost @ $29.65 - a Pot fund -a good early entry on the upturn after weeks of decline-
1st Buy -100 $28.29 I think on what was a positive move on the 2 hr chart- an early entry , followed by an add 100 as cash cleared 3-11 $31.01 that was less than ideal- a few minutes before the Close the decision was made to add to the position.
Daily PSAR just generated a Buy yesterday on the move above 31-
Daily Elder Impulse provided a 1st Green bar Mar 11. The 2 hr chart issued a green bar Mar 9 - 2 days earlier....


The Daily chart:
The Feb 10 gap away bar was a Climax high- Even though it Closed almost at the open, the expectation would be for another gap higher the following day.
If part of a position wasn't Sold on that move, a stop could have been raised up under the Closing price to get hit the next day if price did not do another gap higher- The $40 level should be targeted as resistance.



the 2 hr hr Chart provides early -and multiple signals- Best entry is likely on the fast ema upcrossing the slower declining ema.
and psar should be given some wider room as a trailing stop-loss - Momentum gap aways from the Ema should see a tightened stop in the event of a Climax type move-


Cramer again promoting MRNA not only as a vaccine, but a possible cancer treatment. Suggests Millenials use some of the stimulus check to purchase-
MRNA daily- Yesterday, MRNA delivered a green Elder bar on the Daily , coming off of 3 updays on the daily and Closing above the fast ema.
Will likely upcross the 50 ema today- Will take a partial entry @ the open, and watch to see how it goes after 10 am to add .


the 2 hr chart: Premarket MRNA is up - I will set a $147.00 limit for 10 shares and plan to add 10 on the 10:30 direction.




Adding limit 50 CNBS on the expected higher move - will do 25 at the open limit $33.70 , add 25 after 1 hour/direction.
Filled MRNA $147.10 limit
AMD $84.31

Fed 2 days of meetings scheduled- .
Higher yields on the bond market are a concern for the markets. Both are causing indecisiveness in the markets-
Seeing some weakness in the infrastructure names- seems odd.

3:30 pm - The markets softened intraday- I had a lot of positions that I had to upgrade stops on and used the faster time frame charts to select tight stops and to ensure I lock in some gains and not allow a win to turn to a loss.
Best trade today- MRNA- my avg cost of 20 shares $149.23 Presently higher @ $152.67- Closed higher

I also bought PFE- $35.76 - hasn't gained from the open high.
Holding some JNJ from last week - I would think the single shot and less rigorous storage requirements would make their vaccine highly desirable.
The tight stops -and protecting profits took out a number of my positions- including energy XLE, CNBS,ARKK,ARKW,KOMP,GNOM,REMX,KRE. I had a sizable CNBS position in 2 accounts, which also hit stops-
A new Add today - Semi- AMD- lost momentum and I sold because it was quickly going negative...Still in a nice uptrend but the weakness prompted me to sell-

A concern for me is that the recent small cap momentum did not act as a safe haven today - Perhaps it has come too far? Also being discussed on CNBC by Santolli after hours-

Viewing the VIOV small cap 600- It's had a large surge in volume in recent weeks, pushing it to the top trendline- and has 2 consecutive high volume sell days this week. Today made a Close under the fast daily ema- and it's clearly well extended above the slower moving average & the lower trend line-
A pullback target that keeps the uptrend intact would possibly be as low as $172.00 which should see support from the prior sideways basing 172- 165-
It's quite possible that price does not pullback that sharply, but I've tightened stops to lock in gains should it weaken further. This will also be the case for the broader IWM ,IWD indexes.


A view of the 2 hr with a break of the fast ema, Red Bars forming today, are seen as a negative. As viewed on the daily chart trend lines- a pullback from the upper trend line can go to the lower trend line- and the uptrend is still intact- I'm viewing this present market action and weakness in the trend to assume that the markets will continue to be weak for several days on inflation, rates, and Fed policy a question mark- I think Price could venture down to the lower trend line seen on the daily $175-$172 - If I get stopped out at $181 - I'll watch for a reentry- at a lower price. Because the recent move was a high momo to the upside, I think it can have a larger downside velocity- reversion to the mean makes me think that price continues to trend but comes back to 175- 172 and bounces from there. Potentially , that would also be an ideal reentry level- I think unless the FED gives the market all the encouragement it wants to hear, the trend goes lower before it goes higher.


The russell 1000 value- has also been steadily climbing. Perhaps is also extended???

[ira85]

The RIOT trailing stop March 16. RIOT purchase price was 48.83 on Tuesday March 9. Wednesday, Thursday, and Friday I didn't think of entering a stop loss. It may seem weird but it just didn't cross my mind. A 70-year old making a rookie mistake. I don't have a habit, a routine, or a checklist. Price was going up and I was relaxed, enjoying the ride. It was Sunday when it hit me. What if we get hit by heavy selling Monday morning? By Sunday it's too late to do anything. I was aggravated by my mistake. Monday morning there was selling and I considered my options. I ended up putting in an 8% trailing stop, activate at $54.97. It was too wide to help much. If I had activated it sooner on Monday it would have been much more effective.

SD, I bet you never discuss a situation like this at one of your groups!
- sheepishly -ira

[sd]

It Happens IRA! I just set stops on new positions yesterday- and with the markets uncertain, I've intentionally set many to get hit on minor pullbacks just to lock in some net profits- TECH is in the crosshairs today 3-17 with a big loss at the open.. I'm concerned that the market is getting too worried about rising bond rates and the Fed's guidance- Even infrastructure plays are not holding up well. Talk on CNBC about the historical high outperformance of small caps and value-
I think your stop @ $54.97 likely got hit here at today's open - The low this am was $54.37 - So even if your stop fill was at the Low - that was still over an 11% net gain. Very decent. Since yesterday's blue bar Close was below the Fast ema, setting a stop just below that level was prudent -imo. That gives price one chance to go yet higher-and resume the uptrend, but a 2nd price move lower hits the stop-
I'll explore this further in greater detail later today- but I think this was smart to set a tighter stop on a price weakness- take the gain- and look to reenter - particularly based on the expectation that price will be possibly declining. Thus- allowing a reentry at a lower cost basis- We are heading out in a bit to get our 2nd shots !

The RIOT trailing stop March 16. RIOT purchase price was 48.83 on Tuesday March 9. Wednesday, Thursday, and Friday I didn't think of entering a stop loss. It may seem weird but it just didn't cross my mind. A 70-year old making a rookie mistake. I don't have a habit, a routine, or a checklist. Price was going up and I was relaxed, enjoying the ride. It was Sunday when it hit me. What if we get hit by heavy selling Monday morning? By Sunday it's too late to do anything. I was aggravated by my mistake. Monday morning there was selling and I considered my options. I ended up putting in an 8% trailing stop, activate at $54.97. It was too wide to help much. If I had activated it sooner on Monday it would have been much more effective.

SD, I bet you never discuss a situation like this at one of your groups!
- sheepishly -ira

Well, I'm not involved with the SMM group- although I certainly do recommend it , the free training, and the forum for a bunch of different types of trade ideas- and Dan has a daily video lesson that's worth a listen. I did make a few comments, and then after hours posted a losing trade I had taken a loss on. Posting that loss irritated one of the members that suggested I should just keep that to myself! The conversation degraded from there- I wasn't aware that the site had chaperones and thought that sharing a losing trade was not uncommon. I wouldn't allow one defensive numbskull to discourage the many benefits of engaging on an active forum- and generally a very well organized site.

[sd]

A friend that follows this site emailed & has suggested I encourage IRA's Riot trade to encourage IRA to hold for the larger potential gain that could be achieved if one holds longer- There is merit in holding a winning position for the long term - One also has to have an approach that recognizes that a pullback may become more than a minor decline-and may not be a good time to choose to Hold for longer-

One method I have used for longer term holds in an uptrend is to allow price to have 1 bar Close below the fast ema. That generates a raised stop-loss under that low bar- perhaps -1% below the Low of that bar - If the trade is already profitable, one could consider that tighter stop for a portion, and a wider stop- say 30 ema for the remainder- or even the 50 ema if above the entry cost for the other-
Will add to this chart later today.



I have to learn to save a longer post in increments- Lost this portion.
I'm posting a chart here with 3 moving averages- a Fast 5 ema, a slower 21, and also a slow 50 EMA-
The Green 50 EMA tells us that the primary trend is still up - and sloping higher to the right-
The 21 ema moves faster relative to the 50 - and the fast 5 moves both up,. down ,and sideways as Price pulls it higher, lower, and sideways.
Without seeing the actual price bars- one can likely guess where one would want to be purchasing a position, and then selling for a larger profit.
In all likelihood, One would want to be Buying a position as the Blue line turned up, and selling a position as the blue line turned down.

This is essentially the basic approach of taking advantage of trends in trades to time better entries and exits and then reentries- as long as the Primary Trend stays climbing up and to the right-
Take a moment to view this simple chart example- it seems pretty straightforward- until we add back the Price bars-



At this 2 pm I am writing, Bitcoin is taking a turn higher because of the Fed's policy statements...trying to reassure the markets.

With colored Price Bars added back in - we can see that the easy trade is to be long when green bars form Above a rising moving average- But when do we make our exits? In hindsight, we see how high Price can exceed above the moving average. For example Price hit $80 on Feb 17 , but went down to $60 the following day That was a $20 one day move or a 25% pullback from the high achieved .

Perhaps this RIOT chart also represents how the Tech trade itself has gone this past year- since the Mar lows- We had a period of a huge run higher- let's say we were the savvy Buyer that Buys the 1st green bar that Closed above the fast ema @ $22. Price then provided 12 bars that all Closed above the fast ema and went from $22 to $80.00. WOW! that represented an upside Move Entry to market Top of $58.00 or + 263%. but that would have been the Max possible perfect timing. The Reality is that as long as price Closes above the fast ema and continues to do so, it should be assumed the trend is going higher.
That would also suggest that the opportunity along the way to take some part of the position off would be prudent- Minervini and others take a partial gain at a relatively small +10% capture- Which means they are not waiting for price to pullback to take that off, they are selling a portion into an up move- and then possibly another 1/3 at a higher gain- but who would have thought that this could mover over 200% in less than a few weeks?
One has to have a method to decide when to sell some or all of a position.
One method I have used in the past to stay in a trade longer that allows some slight pullback and volatility, is to allow the trade to make a Close below the fast ema- and then to raise a stop to just below that day's low. That allows the trade to potentially continue higher, or gets stopped out on the next bar that drops lower. That was a promising approach when the broad markets were all trending, but that also left a lot of potential gains on the table when one only sells into weakness. That's fine to do if one has decent gains at that level-

Reading Minervini today- He pointed out that he also uses split stops on his entries- If his Max-stoploss for the trade is an average of 6% but he questions that- as possibly too tenative- he will tighten 1/2 of his stop position to 4%, and allow the remaining 1/2 to go to 8%, the combined Risk is still just 6% but potentially allows the wider stop to survive and allows that portion of the trade to become a bigger winner.

This final chart- illustrates Entries simply on a Green bar above the fast ema, and stops raised after a Bar Closes under the fast ema-
It worked well during strong momentum trends- but also gets whipsawed in March- but it provides a winning approach . Today's lower price action would have stopped out, but price recovered thanks to Powell & Co giving the markets the reassurance they needed. I entered both Riot and GBTC this pm as price reversed and moved higher above the fast ema.

[sd]

I am Buying both small positions in RIOT and GBTC @ 3:15 pm as Powell's delivery is allowing these to react higher-Incorrect, I apparently bought 2 orders of RIOT - and -0 orders of GBTC. Ended up with 100 shares of Riot at an average $63.70 cost basis.
Today I had a number of my holdings hit tightened stops- for a net account loss from yesterday of -1.25% - I also added back AIA today after stops hit this am.


2 hr GBTC

[sd]

With Powell's conversation today causing the markets to rally higher- No Rate Hikes for several years - 10 year 1.646% but expecting a 6% GDP growth this year but no rate increase- so this should give the markets reason to rally higher- Higher bond yields will undermine the market's pushing higher-. But Powell's statements seem to say that they will stay the course to see the economy recover. He thinks inflation in the short term will go higher- but expects that will be a short term condition they will not react to.
My positions that Sold today- but netted gains- XLE, IYT, VIOV- All positions I plan to look to reenter-These were all relatively small gains- base hits and not grand slams- but
I entered back into AIA- after getting stopped on today's initial pullback- I may have to give these EM markets more room for Volatility. I'm getting whipsawed for small -1-2% moves, eroding the position. Since these are not trending higher- simply sideways price action- I just have to assume that the swinglow previously will not be broken lower- and set a stop at that level. I'm anticipating a new uptrend move will be starting soon- based on valuations if nothing else- Still holding CHIQ, KWEB,KURE, and again AIA- a small INDA position- I would think a proper portfolio position would allocate 15-20% into the EM markets- possibly more.

The discussions going on around the bond markets are critical to the equity markets...
The question to ask one'sself- since price declines in stocks ultimately are due to institutions selling off their holdings-not the retail holders- or reducing their position size - downtrends in a stock are typically due to the professionals liquidating - and they are also better informed as to whether they should be a Buyer or a Seller. So, trust the trend direction - Go Long, And stay on the sidelines when downtrending.

Sharing an e-mail I received about an individual new to trading adding to several positions during the downtrend-/decline-
TSLA " TSLA (1x838.08; 1x835; 1x800; 1x750)- clearly trying to build a position.
this person tried to "Average Down" when the stock was downtrending- thinking it was a "Value" because it was cheaper- when a little bit of patience would have allowed the Buy's to be done at $100 less- Note these Buys were all with price below a declining fast ema -
tHE AVERAGE COST BASIS OF THE 4 ENTRIES $805.75.

tHE cOST OF THE INVESTMENTS $3,223. THE vALUE OF THE 4 SHARES mAR 8 = 570 X 4= 2,280.00 OR A LOSS ON PAPER OF $923.00 or a paper loss of -29% -
All because of Buying Early in a downtrend and not waiting for a bottom reversal -
Since the primary trend has been higher since March 23 2020- and particularly favoring the Tech sector- Those recent 2020 market participants don't know anything else as the "Norm" - and certainly not market rotations. Where Buying the Dips worked well previously, the recent market rotation does not favor Tech - and buying Early is buying Wrong. It is smart to wait for a move higher that turns the fast ema up, and use that as a potential bottom- but the 1st bottom upturn should be suspect- Particularly when the 50 ema is now above, the 1st Rally may be a dead cat bounce, and the trend may continue even lower-
For example- This rebound of TSLA to $700 is still below the declining 21 ema - The $700 level appears to be a resistance level that coincidentally coincides with the 21 ema. And today's lows - $650 - perhaps gives the range width $650-$700 - but a Buy above this level - $710- $725 upcrosses that 21 ema- necessary for an uptrend resumption- If that is not achieved, Price potentially seeks a lower level....The $50 price range is a 7% swing at this level- but a better Buy risks less- entering at a higher price from here-

[ira85]

I see SD has written something about these issues. But since I'm much slower my entry was written before I had a chance to see SD's remarks. Here is what I wrote.

3-17 3:30 pm. On Sunday while looking at the charts I was thinking I should have put a fairly tight stop on RIOT right away, March 9 or10. I already had a nice paper profit and RIOT had a history of big price moves. That would indicate I might be able to sell high, buy much lower taking advantage of that volatility. That strategy would also be consistent with the general philosophy to keep losses low and don't fight the trend. Ii think that's what I should have done. But instead of doing that I elected to place a wide stop, raising the risk of bigger losses. I was thinking I shouldn't risk him stopping out over trivial volatility. But in hindsight, that just seems like my old buy and hold training. As if selling after a short hold would be giving up prematurely, somehow wrong. As I write this it seems to me I'm battling my long history of buy and hold training as a mutual fund investor. Well first I was battling being asleep at the wheel, failing to check every new position I buy for possible stop loss needs.

By being so slow to enter the stop and making it such a wide stop, the stop let much of the profit go. The 48.83 purchase price with a tight stop applied quickly could have resulted selling RIOT March 11 or 12 at a price of about 58 to 63. Instead, by being show to enter the stop and making it so wide, the stop didn't get activated until Monday, March 16, resulting in a sale price of 54.70. The profit per share dropped from about $9.00 - $14.00 for quick action and tight stops down to $5.87 per share for slow and wide.

I guess the way it has worked out so far shows the risk of failing to assess promptly for stop loss risks, aggressively cut losses and fighting the trend. Now that I figured it out to be a mess, I'll have to come up with a plan for what to do next.
-ira 5:00 pm

[sd]

Hey Ira! I think taking the profits on the weakness was indeed very smart- and also exiting on the fast ema break very prudent-
Riot reversed higher today-and Closed back above the fast ema - likely due to the Fed's remarks- and i also purchased some (More than I intended) this afternoon-
Part of the active trading process and limiting downturns requires taking the reentry when it presents itself.
Today's low and higher price reversal and higher Close would suggest a trend resumption higher- Please note that the momentum level has not been strong- as viewed by the indicator levels. just modestly above the oversold levels.... So this is a possible tenative upmove based on market upmoves due to the Fed speak today-
I did take the entry as Price regained the fast ema- and will track how this trade evolves .

[sd]

Responding to my friend that wanted to know why I am changing things up here- talking about PSAR, Elder impulse, When to Sell, -faster time frames -

My 1st emphasis is on understanding the 3 phases using moving averages-
without any price bars- and defining whether the trend is up, down, or sideways (basing) ema's tight converging.
To try to allow a trade room to run- just viewing Price bars and the fast ema-
I illustrated one approach to wait and only tighten a stop-loss below a bar's low that Closes under the fast ema- to give it a bit of leeway- perhaps set the stop just -1% below the low- While this worked well when markets were trending strongly, as tech has weakened - and also possibly Riot as it did not make a new higher high, and the momentum is very low on the RSI- perhaps one adapts their approach to better work in a more volatile environment.
PSAR seems to work very well overall in trending environments- but not so when price is in a sideways basing -pattern. Sometimes it is uncanny how well PSAR can Close in on getting the right entry , and is useful as a stop-loss once it's closer to the fast ema -if one uses the 2nd or 3rd psar value below the active price psar--
I will try to do a post today illustrating the pros and perhaps the cons of PSAR- But overall, if one applies it to mechanize their market approach, the results should overall be very positive as it keeps one out of big declines-
The issue I have with the Daily PSAR is how far away from an entry it often starts out with as a stoploss- Particularly when the prior bars were wide & volatile-
So, in that case, I tend to rely more on the Entry gauging a stop that can be tighter- and I often look at a faster time frame - 4 hour or 2 hour chart to judge that tighter entry stop-loss-

The Elder impulse colored bars give quicker indications of a change in Price momentum- so I tend to use these as my primary signal- If the Elder bars are all green and above the fast ema, they're uptrending- If they get a blue bar- still can be uptrending but it indicates a drop in the momentum- A REd bar is usually a reason to be out of the trade- as it is generally below the fast ema anyways.

There is one very consistent theme that is essential- and that is to understand that it's dangerous to jump onto a trade when it is in a downtrend- I illustrated your friend's entries into TSLA as that example- Much better to be long in an uptrend- but at some point, a bar that Closes below the fast uptrending ema gives way to another lower bar , and yet a third- and then the ema is "rolling over and heading lower- We don't have any way to know how much lower it may go, so it's prudent to step out of the trade at that point and look to reenter once price makes a bottom and then a successful upturn of the fast ema-
This is where PSAR often keeps one out of jumping into a trade too early - It is not infallible as an indicator- but it is certainly one tool to consider before one trades-
If one uses a 4 hr chart- it will provide earlier signals- but more failed whipsaw signals as well- That's the trade-off in using faster time frames -4hr, 2 hr- 1 hr-
the faster the time frame- the more numerous and conflicting the signals will be -

Ultimately, It's your choice as to what tools you want to use-, but you will do well if you focus on just a few basics- like the price direction with the few emas as a guide- and perhaps PSAR- and perhaps add a single momentum indicator-
MACD or PPO - just apply these together and do some backtesting to see if it yields positive results- Use as few indicators as necessary in your toolbox-
If you want to slow down the ema signals-to be less reactive- use a 7 ema instead of a 5. This is the "Fast" ema that ideally Price Closes Above this and is trending up. Instead of a 21 - Use a 30- a bit wider- gives price a bit more room-
And Finally - use a 50 ema as a line that tells us the predominant trend direction- also, we don't want to see price falling below it- because that means the fast ema is downtrending hard.
Although i put various shorter time frames on some of the charts, it is because the faster time frames illustrate what occurred during different periods of the day-
Stay with what is easiest to implement - and works for you .

RIOT CHART -FOCUS ON PSAR AS A PRIMARY TOOL TO BUY AND AS A STOP-LOSS - DOES IT WORK OVER A NUMBER OF TRADE SIGNALS?



In the above chart, PSAR provided All winning trades- but the Trend was definitely favorable and up - until the most recent trade, where the trend momentum is now in question. Notice how far the PSAR stop is suggested though - @ $ 24.00 below the price entry- Also notice that PSAR appears to have suggested a buy-stop that should have been signaled days earlier. This is due to the volatility of the prior price movements-

In the next chart, we put in a 7 ema - Notice that the psar stop that is hit is typically on the 1st bar that Closes under the 7 ema.



A closer look at the more recent 2 months psar buy and suggested stop-loss with the 7 ema. The price bars are Candlesticks.


looking at the same chart, and replacing the candlesticks with Elder impulse bars.- Does that improve the entry? the exit remains on a stop-loss set -1% below the bar that Closes under the fast ema. ENTRY ON AN ELDER GREEN BAR WAS EARLIER THAN PSAR- BUT , IT ALSO PROVIDED A FAILED TRADE MAR 1 -
Elder impulse provided an earlier entry Mar 9 $52.00 vs PSAR Mar 11 @ $64.--

Note that the Typical "rule" for an exit -allowing a stop to be placed -1% under a Bar that Closed below the fast ema- did poorly on the Feb 23 pullback, gap down-
PSAR would have sold @ $47, while the -1% rule would have sold lower days later @ $41.00
So which is better?
Psar worked out well , had 2 winning trades , but the initial entry stop is too wide and too large a % for my comfort level-
In this example, nothing was suggested about taking some profits off as the trade proceeded- The price move was extreme over a relatively short period- and is not reflective of most trades that one may put on with conventional stocks or etfs. So, taking some profits on the way needs to be a part of one's trading approach-

Note that the entry at $23 saw a price high of 80- a huge gain- in a short period - Over 200% gains! On paper only if one didn't sell- anywhere's on the way up-
If one waited for that pullback Close to tighten a stop as the only method to take profits- One Sold near $42.-- a 90% gain - Not bad- but left a lot of profit escape.
PSAR sold @ $48.00 - a better gain.



LET'S DROP DOWN TO A FASTER CHART USING THE 4 HOUR TIME FRAME. This will provide 2 bars per each day, but also makes the indicators get tighter to the price action-than the Daily .
What clearly becomes obvious when viewing price and psar on the 4 hr chart compared to the Daily chart, is that the psar Buy signals and stop signals are much faster than on the Daily chart. Also, the psar as a trailing stop-loss is much tighter to price- - In this particular example, it looks very promising to capture more gains by entering the trade earlier and having a tighter stop-loss- Notice it also suggested selling the day before yesterday, with the psar as a stop executing yesterday am,
Although yesterday afternoon, the 2nd bar of the day turned solidly higher and an Elder suggested Buy as it was above the fast ema. , it did not result in a 4 hr psar to Buy -yet- It needs to see a higher move above the present psar value of $66.86 to issue a psar Buy signal.
Note I did take the entry in Riot yesterday based on the climb back above the fast ema and the green elder bar.

However, to be understood, in the larger context- This prior recent rally move higher did not make a new higher high compared to the Feb 17 high @ $80.00- and the momentum indicator - Stoch-RSI on the Daily chart did not suggest much underlying momentum. This potentially could suggest that it's a lower high- to be followed by a lower low-
How will I be positioning myself with this new RIOT position? Initially I have to consider that I bought more of this than intended- but the GBTC will typically follow suit as well I assume- It also looks as though the market is selling off Tech again today, and the enthusiasm for the Fed talk yesterday is waning- I may have to look to split a stop-loss - Minervini style - and reduce my position size if the trade does not go in my favor today.




As I drill down on an even faster 2 hr chart, it shows multiple psar reactions to price - including an early "Buy" on Yesterday's move higher.
As I review this very fast chart- I can't help but notice that every 1st psar Buy signal on the 2 hr chart has resulted in at least a few bars going higher, if not
actually the start of a bigger trend move.



The RIOT position @ Midday - making a bit of a recovery from the lower open-
Obviously I'm pleased to be IN the money vs underwater...


cOUNTED THE RIOT GAINS PREMATURELY !
sTOP UNDER THE PULLBACK SWING LOW $62.99 IS LIKDELY TO GET HIT FOR 50 SHARES-

[sd]

3-18-21

1o Year yield higher +1.73- Not listening to the reassurances of Powell yesterday-
Nas Futures down -215. looks like another ugly day for the Tech sector-
TECH as viewed by the QQQ's has put in a head and shoulders and Break of the "Neckline" with the present price attempt to move higher seen as a 2nd Right shoulder-
Well illustrated using the 2 hr chart


looking FOR sTRENGTH OUTSIDE OF tECH-

RIOT lower @ 10:40 down -2.5% Asian shares higher - Tech getting thrown out to the woodshed this am- While stopped out of all Ark funds previously, still holding 1 tracking share of each- all RED- ARKK down -4% ! saw a mention that many of the Ark holdings are all down below the 50 day ema- So this Doozy of a correction expected by CW appears to be ready to push prices lower. - Storm prep outside for the Front coming through this pm-
Going to get some seeds started today, but buying what is working-. JETS, IYT at recent highs. -Areas of strength when the wider markets are weak-
DFEN 3x the aerospace/defense- bought 100 $22.56 in the trading acct- ITA largest Defense sector fund - recently broke out of a months long base 98-100 and presently at a recent high base- I'm a Buyer 50 @ $106.20 with a split stop $103, $99.39 , Doubling the XLI position as it clearly is trending higher- holding 100 shares with the add today- Industrials and financials showing green today - dbld JETS - Chasing KRE after a tight stop got hit- making a new high- I'll give the financials more room. Buying 100 on the breakout -
Buying 50 VIOV on today's recovery higher- This provides a very low RISK entry

VIOV - shallow pullback- took out my prior stop-loss Reentering higher than where I sold it- using unsettled funds -so no stop allowed for a day or 2 -


TRANSPORTS- IYT


JETS



DFEN - 3X DEFENSE/AEROSPACE- SHALLOW PULLBACK- SMALL POSITION IN THE TRADING ACCOUNT.


ITA DEFENSE/AERO SHALLOW PULLBACK -ENTRY BEFORE A BREAKOUT REDUCES THE RISK % ON THIS TRADE.


REGIONAL BANKS - CHASING THE BREAKOUT MOVE TODAY.

[ira85]

SD. Your post today mentioning Powell . . . that's a lot of data to analyze! That's a lot of work on your part. Thanks. I'm still trying to understand yesterday regarding managing my RIOT trade. I still think it was a mistake for me to not put in a tight stop early and get out of that trade. But regardless of how I might have worked it differently, in fact it resulted in a profit of $352 for an investment of $2,930 over a 9-day period. Annualized that's earning at a rate of $14,275.56 a year for not much work. From that perspective I got nothing to complain about. I've worked more for less plenty of times.
-ira


Responding here- That was smart to do that sell and lock in that gain- I took my loss on tightened stops a short time ago- posted on the next page in this thread. I went from up + 300 to losing a bit over $300- hadn't calculated the exact damage yet- ODD to me that RIOT did not track Bitcoin better- like GBTC is doing. But bitcoin is still up 1.3% this pm @ 2:30 . Well, I had the opportunity to take a quick small gain on part of the position, but got too busy shopping for other adds. Lesson learned.