SD- 2021- ACTIVE MANAGEMENT FOR GREATER SUCCESS IN 2021

[sd]

3-25-21
Futures premarket down slightly- Blockchain down- Biden's corp tax rate wants 28% - ARE we setting up for a more significant correction? Feels like it....
Presently $194k in cash- stops using the 2 hr chart and psar levels on all positions-
Acct value $241,835- Been a tough week of losses in most positions- If i deduct the $14k I rolled in, the account value would be @ $227k- a drop of $24 k from the high- or 9.5%-
That's my expected range max of -10% using stops- but my experimenting with trades- and some complacency- allowed it to go that far.
While I am still only giving back "Profits" got to stop the bleeding and complacency- Have to trust the charts to tell when it is smart to get back in- and perhaps that means only gradually- on solid turns in the trend from down to waiting for that upturn- potentially very early signals on the 2 hr- moderately faster on the 4 hr- and perhaps slower and "safer" on the Daily- Finding those other investments that are trending- making new recent highs in this market-

Time to get more defensive- reduce losing positions, take early losses rather than deeper- Pay attention to the Chart..
Even SPACS are getting panned- and a lot of the newer IPOs are pricing below their expected range-
Quick review- Yesterday initially started to look bullish for tech and that bullishness gave way to selling-
Tech is still in the crosshairs of getting repriced lower- Value didn't do well either, and small caps IWM made a very bearish low Close well below the 50 ema after initially going higher-
The 50 ema didn't provide one barrier for the IWM to cut straight through this week- The past 5 days of red bars - all below the fast ema- dropped through the 21 and potentially now goes lower-
This market appears to be thinking it has made a top- and is telling us that a deeper correction is perhaps underway. After making a new high Mar 15- this counter move to the downside is something of an extreme reaction- but the Close at the very low indicates bearish sentiment- This in spite of the new stimulus checks being sent out-
Tech has clearly topped- and is selling off - If the qqq's go below the prior swing low- $300 look out below .
The big gains in small caps are now looking very toppish as well-
I took my losses in the Asia positions yesterday, raising Cash.
Took small losses as I tried small positions -testing the waters with what looked like an initially bullish move for tech in TSLA and CRM- I ended up using the faster time frame charts and seeing the turn down, raised stops which were hit.
Trading account is all in cash-
Bearish open- some stops getting hit...DIA - Dow gap down lower See if things turn up at 10:00

QQQ'S CONVERGENGING EMA-S (BASING) WHIPSAW PRICE ACTION- WEAK
SPY- Gap down - BELOW RECENT BASE LOWS. Target lower? $372.00 is only -6% from the highs-
4 hr chart

IWM SMALL CAPS -BELOW THE DAILY 50 EMA- 100 EMA ON THE 4 HR


VIOV- SMALL CAP VALUE


ARKK- THE OUTPERFORMER IN 2020 Giving back -30% so far in 1 month-






CSCO - Cramer promoting- making a new high. low valuation-
ARKK FUNDS- OLD FAVORITE down -30% from it's highs. Since ARKK holds a select number of innovation stocks- some of those are down almost -50% from their highs-
While it is tempting to think that because things are cheaper, it's time to be a Buyer- WRONG- VIOV- small cap value- gapping down lower -
When the recovery plays are selling off-
AG related- DBA, IPI, MOS, at the 50 ema. DE- BELOW THE 21
Steel- SLX, X,CLF -ALL LOW- 50 EMA MT BELOW THE 21 NUE HOLDING UP -TRENDING POTENTIALLY WILL LEAD HIGHER? cmc-REBAR- @ 21
MATERIALS-COMMODITIES- METALS GUNR- 50 EMA; FCX- BELOW THE 50; SCCO -DROPPING LIKE A ROCK- COPPER;
PAVE- UNDER THE 21; VMC- BELOW THE 50,

Under all the selling - there are some gainers- IBM, HD, PG ,mo- on the Dow. in the face of market weakness- Refer to the stockcharts main page- market movers.
Viewing these on the 2 hr chart w/psar - Presents a potential tight stop-loss on stocks within uptrend- mo presently pulling back with a psar sell.
i will look to see how these hold up over the rest of the day, and potentially consider a small entry later today



3 PM - Reversal attempt by VIOV,IWM,SPY, not jumping in .

3:40 pm . Buying- IBM on today's breakout $133.24- It has been uptrending for 3 weeks, moving substantially higher today. a stop @ $128 presents a fairly tight % Risk .


SPY made a reversal try today- opening lower, but closing higher.
DIA also moved lower,to the 21 ema , but reversed to close higher than the prior high- and trying to regain the fast ema -
The QQQ's opened lower, tried to recover, but Closed at a 2 week low. Still above the Mar 8 low Close @ $300.00 but the emas are now appearing to be inclined to go from converging to perhaps lower. a Close below $300 would confirm the downtrend.


Today's price action hit the majority of my stops- IYT and XLU- the remaining positions in the Van IRA- ONly a small SLV position in the Van Roth--
And yes- I hold 1 share of the recent port positions- I find it convenient to allow 1 share to remain to judge how it is performing in the accounts.
The IBM trade was in the IB account.

How will I feel when prices rally higher? I have to assume that this will occur- but you have to be willing to take a loss at a point that the trade no longer meets your expectations-
That's the price to be paid for having some level of control about the trade (s) taken. The worst lesson is to think -"IF only I didn't have a stop, I would be on the road to recovery"
and that to undermine your discipline in future trades- That may happen on a number of trades, where one's stop-loss seems punitive- perhaps it could have been tighter -or perhaps wider-
but the real hard lesson is to trade and remove a stop- only to find out that a 10% loss turns into a much larger loss- A -50% loss requires a 100% gain to get back to breakeven.
A 10% loss requires a 11% gain to get back to breakeven.

[ira85]

SD, I've used that little math reminder about how it takes a bigger win to catch up. I find it helful. I know I've been guilty of trying to hold on too long trying to salvage a loser. One thing that helps me is remembering that is a common newbie problem. It also helps me to remember I have to preserve and grow capitol. Letting a trade go against me is a losing strategy. Also, inceasing position size hoping to catch up is another. When I catch myself thinking that way, I reject the thought as invalid. I tell myself to move on and consider a strategy that has a chance to win, I talk to myself. Silently. I am often my own worst enemy and I need corrective thinking . . as you have probably noticed many times. -ira

[sd]

Premarket post wouldn't upload-
Nas was negative premarket- but now - turning higher-

I agree on the corrective thinking- As i judge my recent losses- it was due to not following my own defined approach- Perhaps simple trader's "fatigue" in having a series of small losers allowed be to intentionally experiment with giving price greater latitude- Piss poor timing for that as an approach- I thought having rotated out of Tech previously was the right path- It's a simple trend following approach and I didn't stay with it- So I absolutely deserve the losses I finally had to take-
My final act of saying "Uncle" was potentially at yesterdays swing lows - Everything moving back higher today- But is today the right time to react and get back into the expected winners in the recovery ? Potentially yes- using yesterdays lows as an initial stop-loss

I think it's worth using VIOV as an ETF we both have owned- and I will look to potentially reenter it again .
How can I make better- more tactical trades. Comparing the Daily and the 4 hr Charts- The 4 hr charts give am quicker time frame view, and the psar is also faster and closer to the price action- Viov has opened higher- but is still below the daily declining Fast ema- but this price action is a 1st R.O.T. on the Daily and the 4 hr.
The 4 hr chart is showing an upturn from oversold on the indicators, Price presently higher @ $174 and a 1st psar Buy signal on the 4 HR-
I will take a partial position entry here- relying on the faster 4 hr signals. .Buying 15 @ $175.20- but the bid-ask on Vanguard is well above the actual transaction
exchange - On stockcharts- the present high is just $174.46 - In IB it is showing $ 174.79- so Van is routing orders to not get a best Fill. I think.
Should of used a limit- ...

The 4 hr Chart-
Yesterday a price low at the 50 ema, and a high volume higher Close- potentially above the declining fast ema, causing it to make a slight upturn -
This higher Close above the fast ema represents a 1st substantial Reversal of Trend attempt by price - This was also done on very high Buy volume-
Today, price opened higher, and by 10 am had continued to be above the Open.
Notice the PSAR issued a Buy as price exceeded the decling psar values- The Decling psar trigger was at $173- and could have been used as a buy-stop entry- On the daily chart- the psar trigger value is presently a very high and wide $181.27, so the 4 hr is considerably closer to the price. The 2 hr issued a Buy @ yesterday's price above $ 171.00. but also whipsaws much easier-


Transports breaking out- I will add to my existing position today- added 10 shares - Van IRA
Pause- errands-

3 pm update- IBM higher +2% , IYT higher- Small cap value VIOV pulling back below today's open. - IWM pulling back further from the open.
SPY higher- Dow higher- Tech down. ARKK, TSLA testing deeper lows made 3 weeks ago.
China stocks under deeper pressure-Good to be out-
In the trading account: added some stock positions on the basis of chart strength-
ADXDED MO- 50 @ $52.00 on the breakout - Big move today, Stop @ $49.00- Will look to add to this if it pulls back Monday. Also considered to be a defensive holding- Held up above the uptrending ema during the recent market weakness- a couple of penetrations but Closes stayed higher .
NUE gap higher & large gain- Cramers favorite low pe steel stock. I'll try to place a limit $77.50 to see if there's selling into the Close- 20 shares-partial position.looking very solid into the close.
Buying 100 HPQ on the breakout- PSAR Buy- psar stop- $29.-- Entry fill $31.37 @ 3:45
Semis- AMAT, TXN higher.
taking a small AMAT 15 $128.17 fill- had to raise my limit at the close.
PG $135.71- a conservative position for sure- but trending higher past 3 weeks from a sell-off.

The Nas closed higher- +1.55%- good way to end a bad week for Tech- ARKK did not gain, but Closed at yesterday's Close- down on the week.

VIOV Closed near the intraday highs $176.03, as did small caps- SPY made a solid upmove in the last 15 minutes to Close solidly higher.
Had to be attributed to institutional buyers stepping in strong.

[sd]

3-26-21 End of Week Tally $242,314 equates to a 2021 low on a deduct of the rollover = $227,914. Still net gain in 2021 -but i don't want to give back that much that easily again! The last hour's Rally - had to be institutions stepping in - pushing the indexes higher by buying- should continue on Monday...

Other than not implementing stops as I should have- and taking a beating- it seems the China sell-off this week was one or two large funds having to liquidate their position.

Now that I have a very large cash position in both the Van IRA and the Van Roth, it depends on how well I invest in the future with a disciplined approach-
This week is a 1 year anniversary from the market sell-off last year - and from that low, I have a combined Van and IRA average return of 28% -
The smaller Roth contributed 47% of that gain- while the IRA contributed 21% -
Keep in mind, this starts from the market lows- the next graph will take the return back to the beginning of 2020 for a more conservative return.



from Dec 31 2019 to present: a difference of 3 months- - the combined return was 38% over that period not too shabby- as can be seen in the graph- the largest portion of the gains were made after taking a -6% drawdown in the fall.



Note that the graph reflects the values at the end of the monthly periods, so it does not illustrate the periodic dips and fluctuations over each month-
So, it does not reflect that my loss from the intramonth high was more substantial a decline than depicted.

[ira85]

The market had been down from last Tuesday to Thursday morning this week, 7 days. Then bingo, a turn around. Today is 3-26-21, a Friday, Wednesday it seemed all of my charts were covered with red bars. Things started to change this Thursday morning. The bars started coming in mostly blue. In two days these small value picks changed from looking like damaged goods to rising smartly. Here's the NYSE today:
Advances 2,554
Declines 752
Up volume 758,524,517
Down volume 349,558,358

For the weekly totals the NYSE had more declines than advances and more declining volume than advancing volume. So the week had been bearish until the turn around started Thursday and continued Friday.
I sold all of my holdings but one during the bearish period. PSCT, PSCD, and the last of VIOV were sold. Only RSP stayed on my books by the end of the day Thursday.
Then on Friday I began thinking about what to buy if this rally lasts a while. The charts for RZV, RWJ, and VIOV all looked good. I had them a week or two ago. Example Friday afternoon RZV had price higher than the 7, the 50, and the 200 SMA with those SMAs in the positive order. Price finished with blue bars. I bought positions in those 3. I hope I'm not calling this a buy signal prematurely. -ira

[sd]

I think these are all valid signals - The primary uptrend is intact, bullish buying volumes, and looking at the 4 hr chart vs the daily to get a more responsive entry/exit signals: The overall markets enjoyed a bullish Close, and as you noted, advancers were the vast majority on the NYSE....
The price correction in Viov from the high to the low was a substantial -11% RZV -13% RWJ -16%
Viewing other pullbacks in this uptrend, following red bar lows, all 4 hr green bars that followed that dip lower Typically led to higher prices- but not always in a straight line. This recent pullback qualified as a "Correction" based on it's magnitude- Ideally Price will lead the fast ema higher and uptrending., but consider that the potential for a shallower pullback is certainly a potential to be aware of- Of course, there may be a more substantial rebound directly higher-

[sd]

Friday's positive price action and market recovery was substantial- indicative of a bottom reversal- While I was not jumping back into ETF's on Friday to any degree, I will have to make that call Monday -depending on how the markets are shaping up- I'm expecting a follow through will occur to the upside momentum-
Part of the large sell-off last week including some Tech and Chinese internet funds was liquidation of billions of dollars by an investment firm to cover margin calls by the brokerage firms. And profit taking and automated selling programs likely added to the decline, but the Friday turn was impressive- although I was focused on adding stocks in the trading account that have been holding up well during the downtrend- It looked like a flight to "safe" stocks has been underway- with some very conservative dividend payers gaining.
Small caps have seen profit taking this past week- and one observation I heard expressed is that small cap valuations are now at historical highs-- and having outperformed -
and perhaps the potential new higher taxes suggested by Biden would be a real headwind for small caps to bear in the recovery- including an increase in the min wage- increased SS taxes and corporate rates going higher-





Visiting the muscular portfolio page small caps VIOV,VIOG, and large cap Value VTV are still the portfolio's holdings, meeting the criteria of outperformance over the past year- and likely simply ignoring the recent volatility.
www.etfscreen.com/muscular-portfolios/papa-bear.php
I have to present the question of how far down one or more of these top holdings would have to decline to get replaced in any one month dip? And if there was a swing into real estate for example VNQ that is presently showing only an average return of 25% over that 3,6,12 month gain - What if one compared growth in shorter increments-- say 1, 3, 6 months?
Granddaughter's Birthday Party today! Life regaining some normalcy!!!

[ira85]

SD,
I followed the link to Muscular Portfolios in your recent post. I think you wondered about how long it would take for an ETF to get to the recommended list. I would think a shorter holding period would change some of the recommendations. These rules for selection as a recommended holding puts a lot of weight in the holding being a long term out-performer. I like the systematic procedure being objective and rule bound. It seems this system would favor long term out-performers and remove under-performers.
Livingston says the Papa Bear is designed to (1) keep losses small during bear markets, (2) underperform the S&P 500 with less volatility during bull markets, and (3) wind up with superior performance over each complete bear-bull market cycle. It sounds like he's expecting it to it out-performs the indexes by reducing risk. I suppose I should listen to that advice. My next thought was maybe I should share the results my money manager had managing my funds for his first year, March 20 to March 21. Not tonight. Too late.
www.etfscreen.com/muscular-portfolios/papa-bear.php

Muscular Portfolio Strategy rules:

1, Select any consistent day of the month to reallocate your portfolio.

2. Momentum Rule: Before the market closes on your chosen day, note the three ETFs with the highest average 3, 6, and 12-month gain (the green rows with a Buy percentage).

3. If, because of a previous month’s rankings, you already own all of the ETFs in the green rows, do nothing.

4. Sell any ETF you own that now has no Buy percentage.

5. Use the cash from any sales to buy any indicated ETF you don’t already own. Exact percentages are not crucial.

6. Hold each of the top 3 ETFs, whether the average 3, 6, 12-month gain is positive or negative. Even if slightly negative, the strongest ETFs tend to rise in the following one month or more.

7. There's no need to rebalance the three ETFs back to their original Buy percentages unless an ETF is more than 20% off its target dollar amount.
-ira

[sd]

Good Monday! Futures down again as the potential for a large institutional fund in trouble last week due to margin calls and over weight their positions on some individual names -
Credit Suisse bank/brokerage down large. - affecting some other banks/brokers. This may be a bigger issue than what is being publicly disclosed- ARCHEGOS Capitol may also affect other hedge funds that use leverage.... Credit Suisse, & Nomura are liquidating those losing trades today. This could snowball if the markets get nervous about these failures- and over leveraged. Morgan Stanley, GS others may have been involved with this firm.
I don't know how this will affect the larger markets- Hitting some banks/brokers this am.....
Bitcoin up, TSLA below $600.00- ARKK down. ARKX -Ark space ETF to open Tuesday XAR etf up slightly today - but it is not a strongly trending sector.

10 year is holding higher 1.678 - which has a drag on stocks until the markets agree that higher rates & stock appreciation can go hand in hand as part of a normalized recovery-

Buying 1/2 BA (7) on the breakout @ 10 am- $252.06 - setting a limit order lower for another 7 shares on a possible intraday retest to $247.00

I hadn't added back some of the funds I got stopped out on last week- and when I do, will reduce my position size- I apparently still hold 16 VIOV in the Van IRA.
an hour into the day, Markets are lower- good time to stay defensive.....



Hey IRA- I Think that the muscular portfolios concept is solid- Go with the best performers- I wonder how it performed in the very rapid 6 week sell-off a year ago? If the funds are held without stops- as i believe is the case, that would be quite a ride down. And yes, the longer duration- month added into the mix identifies the longer term outperformer--
During periods of market rotation- It would be interesting to understand how the rotation from tech into value occurred over this past year- Going long with the market outperformers is going With the Tide-
As you noted, it is a Rules based system- I have the book- muscular portfolios-will give it another read this week. It certainly seems focused presently on the small cap arena-
I like selecting the better performers- and I wonder if that could be done on a shorter time frame - 1 mos, 3 mos,6 mos average to also find that transition or rotation?

Your Broker ideally gave you a very decent 1 year return- He got your $$$ at the market lows- Out of curiosity, how much trading -in and out- did he do? When did he make a decision to sell a position? And, is he repositioning now?
The easy money has been made - now it's time to be tactical- aggressive with stops- and perhaps just smaller positions- or a larger % in cash- Or maybe just hold cash, don't force any trades- and trade much smaller when you do- Don't have to FOMO a whole lot.
I don't know what catalyst will be there to drive the markets higher-that the markets haven't already factored in- And when P&G is trending, that's certainly a Risk-off trade.
I did add to the PG position today.


Small caps selling off EOD -2.78 % Jim LaCamp - MS thinks small caps have topped- as an index play IT'S ALLREADY BAKED IN . Dow closing higher-Spy flAT .
fINANCIALS DOWN-
i'M STAYING fLAT IN THE vAN - iyt TRANSPORTS POSITION IS DOWN .60% vIOV -2.47% gbtc- gRAYSCALE BITCOIN UP +6% -SEEMS TO BE RANGING 53-40

gOING FISHING TOMORROW AM- DOESN'T APPEAR i'LL BE MISSING OUT ON MUCH IN THE MARKETS!

PM note- Cramer says the markets are being flooded with Spacs and IPOs and simply too much fresh supply coming in and not enough demand- Also, many of these recent offerings have issued secondary offerings of millions of shares- diluting price even further-

This was indeed reminiscent of trading in the Tech bubble in 2,000. The end result should not be as hard on tech now, as many of these companies are actually earning $$$ and not being valued on "eyeballs"-
Covid cases are surging higher- President Biden is asking Governors to keep mask mandates in effect . Spring Break, and openings across businesses are seen as being too early-
Europe is fighting a new surge- and that is expected in the US in the weeks ahead.

The upcoming infrastructure bill has already been priced into the markets- NUE- steel producer has already been surging higher for 2 months- as the market institutions have looked ahead to who the winners would be. CMC rebar; USCR,

Materials play such as road crews, VMC, Jacobs engineering, USCR perhaps already priced in.

[ira85]

positions 3-29-2021

26 stocks Market Value
AAPL APPLE INC
ABBV ABBVIE INC
ABT ABBOTT LABS
AMZN AMAZON COM
CMI CUMMINS INC
COST COSTCO WHOLESALE
CRWD CROWDSTRIKE HOLDINGS
EXK ENDEAVOUR SILVER
GBTC GRAYSCALE BITCOIN TRUST 12,659
HD HOME DEPOT INC
IBM INTERNATIONAL BUS MACH
ITW ILLINOIS TOOL WORKS
JNJ JOHNSON & JOHNSON
KNTNF K92 MNG INC 4,359
MSFT MICROSOFT CORP
NRG NRG ENERGY INC
NVDA NVIDIA CORP
PEP PEPSICO INC
PLTR PALANTIR TECH
QRVO QORVO INC
T AT&T INC
URI UNITED RENTALS
UTF COHEN & STEERS INFRASTRUCTURE
VZ VERIZON COMMUNICATIONS
WEC WEC ENERGY GROUP INC
WMT WALMART INC

5 ETFs
HYS PIMCO ETF TRUST 0-5 HIGH YIELD ETF 21,372
SCHO SCHWAB STRATEGIC TR SHT TM US TRES ETF
SILJ ETF MANAGERS TRUST PRIME JUNIOR SILVER MINERS ETF
SPSB SPDR SERIES TRUST PORTFOLIO SHORT ETF
XBI SPDR SERIES TRUST S&P BIOTECH ETF

1 Mutual Fund
TIPWX BLUEROCK TOTAL INCOME + REAL ESTATE I -market value $18,613.

Some Cash

Biggest stock position is Grayscale Bitcoin Trust. Instead of calling this a stock holding, it would seem more accurate to say it's a speculation on Bitcoin a cryptocurrency.

Biggest ETF is Pimco High Yield

Market value 3-31-2020 was $171,913
Current market value 239,837
one year gain 67,924 39.5%

KNTNF is a gold, silver, and copper mining company operating in Papua, New Guinea and headquartered in Canada. The stock has been as low as $2 this year, so I think it's fair to say it's a penny stock. It's been as high as $7 and closed today at $5.01.

Pretty diverse. Old fashioned blue chips are in the portfolio, e.g. Abbott Labs, AT&T, Home Depot, IBM, Johnson and Johnson, Walmart. And some speculative picks, like the Bitcoin trust and the penny stock gold mining company.

Having the first year begin March 31, 2020 was a huge impact on performance. If it had started a month earlier it would have caught the market crash. The DJIA opened 3-01-2020 at 25,590 and closed 3-31-2020 at 21,917. A loss of 3,673 points or 14.4%.

[sd]

I think that's a very diverse portfolio, and also a good 1 year return! It certainly trounced the return that I received from my fee based adviser-! Thanks for sharing- I know it took some time to post all of that-.. Some solid infrastructure names as well as some old guard stuff- dividend payers, healthcare & bonds, so the really spec stuff is the sizzle, but not a major portion !
Should be well able to withstand some market swings-


3-30-21 10 year jumped up overnight- 1.76% - likely will keep a push lower for tech-
Watch the safety plays today- PG, PEP, MO, VZ- etc- when the dividend payers are where the market rotation is heading. - market becoming more conservative?
I'll check that out when we get off the Lake today- Blue Skies, Sunshine , and getting warm-60's+

ARKX- Ark Funds Space focused ETF opens today- It will be interesting to see how it performs in this market.

[sd]

3-31-21
Nasdaq up almost 2% ! so some sector rotation and portfolio adjusting is occurring-
Hade a sleepover last night, and the am with the granddaughters- so no stock or index Small caps making a tenative green bar today as well- Will get some added positions in before the Close do some research...

From Dan @ StockMarket Mentor- He sends out a daily email ,and also a video at the end of day on the website to talk about market action-

Hey, he offers a Free 30 days view of his forum, his type of trading , and what's not to like- It's Free- After 30 days, it's $94/month- but one can cancel- I'm likely not going to continue aftefr this month because I anticipate not spending much time trading- Too much other Living things to do-
Here's a sampler of Dan's insights-
"
So, in this environment, here are some truths that you've got to know...accept, and own:

During a volatile environment your batting average (% of winners vs. losers) will be lower. You'll make fewer profitable trades. Sorry, but it's true. ¯\_(ツ)_/¯ What is a measure of volatility? If the market (or your stock) is not in a clear trend...it’s volatile. The only question is “to what degree is it volatile?”

Along with a lower batting average, your average profits will be smaller. If it were otherwise, it wouldn’t be volatile environment. It would be a trending environment that rewarded holding positions for bigger gains.

With a bad batting average and smaller gains on winning trades, you must have tighter stops. To think otherwise is just bad math. If you want to make money and your gains are smaller, then your losses MUST also be smaller. "Win little and lose a lot" is not a recipe for success. "Win little and lose a little" is a recipe for treading water, which is better than sinking. "Win a little but lose tiny" is actually a recipe for success...even with a lower batting average.

Smaller, choppier gains can add up...but large losses (and certainly ONE or 2 big losses) can wipe these gains out quickly. Think about it. You can be trading with discipline and keeping those losses really small. You're playing tight. Folding at the first sign that your hand is not a winner. You're treading water...but getting some lifts here and there. You're making steady gains in your account, though they're pretty modest. Still, it's a tough environment and you're making good decisions. You wish you were making more and are just waiting for your chance to win big.

Then comes your chance. You see VIPshop ($VIPS) get crushed on Wednesday and sell off 22%, closing right at the 50-day moving average! You've been trading small and on defense, but this is the chance to make a killing. You pile in at the close with a BIG position, eagerly awaiting your reward for taking action!! No more tiny positions. You're going in big...and you're going to win big.

Two days later, you're down 30% and you sell...just as the stock is bouncing off the 200-day moving average after a 45% plunge in just three trading days. You missed that technical level because your account was on fire and you were just trying to find a hose to put out the fire.

In a nutshell, you went on tilt. You had been making good decisions and trading with discipline. But then you went nuts. And now you're back to where you were in January...of 2020. Good times.

In a bad market, downside gaps are more common, and so are big pullbacks. You've got to tighten your stops and cut your position size. If you are normally risking 8% on a stock, cut it to 5% or maybe 6%. Maybe even 4% or 3%. Me? I’m a wimp these days, taking smaller positions and cutting them off at around 2%. Occasionally I'm down 4%, but never 6%. I've given back about 4% of my highest account equity...and I'm not gonna give back 5%. If you're down 4%, you only have to make 4% (plus a rounding error) to get to new highs. If you're down 10%, you've got to make 11%. If you're down 20%, you've got to make 25%. And if you're bad enough to take a 20% draw down, what makes you think you're good enough to make 25%? (When I say "bad", I'm not being mean. I'm just making a point. Losers lose money, which is why they're losers. If you don't want to be a loser, then define what "losing" is to you, and don't lose that much. Pretty simple stuff really. You just need to be oriented towards not losing.

Start with smaller positions. If you normally put 10% of your account into a starter position (with a tight stop on that position), then cut it to 5%...7%...whatever. Just make it a bit smaller.

Take profits earlier. Focus on the chart -- where are traders typically taking profits right now? Measure the recent peaks against the 50-day MA. How far is the move before it stalls out. Bil O'Neil has written that a 20% move in a stock from a proper breakout is when you should start taking profits...because everyone else is. Now, that's from a "proper breakout"...from a solid base. That's different than "hold your position until you make 20%." If you bought a stock after it has run up quite a bit, you don't have the luxury of trying for 20%. Maybe you're gonna get only 5%. Or maybe this trade is going to be a loser. Again... ¯\_(ツ)_/¯ It's called "trading", not "winning."

Last point: Track your trades -- focus on batting average and average gain vs. average loss. YOUR actual batting average, accounting for ALL trades. YOUR batting average and win/loss stats are the only numbers that matter. Know where you are RIGHT now. And once your batting average and win/loss stats start improving, then the market might be getting better, and your defensive efforts will start to pay off.

That's all I've got this morning. It's what I've been thinking about for the past few days.

Have a good day.

--Dan"

[sd]

3-31 I'll be buying more of BA as it makes this cup formation here- AMAT had a nice gap break higher here - HPQ as well- Semis moving higher with tech
IBM not participating today - will tighten the stop to $131.00 psar $132.07 daily on an entry cost of $133.24
Bought 20 MSFT on large gov't contract announced today

Reviewing what to invest in this pm- So many charts are just rolling - and many are well below the 50 ema- and it seems that the infrastructure names are in favor for a few days, and then out- The Copper plays FCX, SCCO were good through Feb, and since have cracked, rolled down under the 50 ema-
Steel trades in favor - but I didn't jump back in .. SLX- NUE,X, CLF-

IRA had posed the question about possibly defining a better entry - and with these rolling breakouts and then pullbacks- perhaps as long as the trend is up and sloping to the right- Buy the next up day after a penetration of the 50 ema-???Use that lower bar as the stop- We don't seem to be able to see that months long uptrend with barely a pullback below the fast ema- instead, we have short term pops higher, pullbacks follow- but the trend is intact-
10 year is higher- tech is up, small caps still up , Midcaps up, SPY up
I'll be taking a starting position in VWO today @ $52.00, and bought starting positions in VOOG, FIW,GNOM, DBA, DIA,TDV, ousm, and also back into some of the beaten down China names- KURE,KWEB-- These are

Bought a small position in ARKK at the Close-
I'm still holding a high 2/3% in cash in the Van accounts. The smaller IB trading account is all in with today's adds.

It feels as though the market is slicing and dicing- discarding some areas, favoring another, only to go back and is now also looking at tech again- but undoubtedly it is odd to see - but possibly a good sign....
DBA provided a good entry today- Price had broke the uptrend as it dropped below the 21 ema- went lower , and crossed below the 50 ema-
Today's high volume reversal bar Closed back above the 50 & 7 ema- and this suggests a low Risk entry - stop @ $16.50.

Without a solid trend to rely on- Yet the Spy and Dow have made new highs- and continue to push on ....So, being willing to reconsider the ideal entries- may be also the perception to take on a higher level of Risk- but the trend must be to the upside for this to be considered-

[ira85]

I read the comments from Dan. He makes a lot of sense. I've been thinking more about just retiring and giving the rest of my investments to my advisor to manage. I expect to be making some trips before next winter. Being away from the computer for several days would require doing a lot of preparation then a lot of work to open back up when I get home. It already takes a lot of my time and trying to work in more time to prepare for travel doesn't sound like fun. I'm to slow, both physically and mentally to be very good at this. You are so much faster I'd bet you can do this for several more years. I have to be careful to make sure no one challenges my competency and puts me in a home. I bought a fancy bath tub today. Cost is $20k+ I better not give anyone more ammunition to lock me up. So I'll work with my professional manager, the one who has me in bitcoin and penny gold mining stocks. (I'm writing this trying to be funny. Don't worry, I'm not the least bit depressed. And if I do get depressed, I'll have my bath tub to comfort me.) -ira

[sd]

Congratulations on the new TUB! I hope you get many years of enjoyment from it! @ 20k it's Got to be quite the Tub! cOMMITTED? Not at all- you deserve to splurge after all those years! You get to use it everyday- year round! I spent that plus a bit on a boat i only use 7 months out of the year! Which one of us will get the greater use LOL!
I really appreciate your input and keeping things somewhat active here- these last years. . The decision to unburden yourself of self management and removing one complication from your life at this time may be a really prudent decision- - It certainly removes one thing to get stressed about! there is something to be said for hiring a professional to take care of all of those things- RMDs etc, and allowing you to participate in Life and more important things than tracking stocks- I'll miss your feedback, and wish you the very best- And if your travels ever bring you near Raleigh NC, please look us up-!
Your adviser gave you a very good net return - and had a couple of Risk plays in there-for some sizzle -
I recently talked with my adviser and explained to him that I wanted to be more allocated to a higher Risk- portfolio because I was unimpressed with the 5.5% average return over the past 4 years he has delivered. He gets his management fee , but there should have been much more growth- I think he's geared up for those $Million dollar+ accounts that have all the cash they need- just want preservation- I need some growth in that account- he manages- , his firm doesn't pick an individual stock portfolio like your active manager- Uses some institutional funds- a few of which have very low "safe" returns" Of course it only had a -10% drawdown- last March- but that's also about my active drawdown limit as well- yet with a much better higher net return-

I sent him a copy of my Vanguard account, talked with him about my net gains- and he mentioned that their firm also offers other strategies- that potentially would yield much better returns- yet have downside protection- We agreed to discuss it in a few months- I may rollout the profits to him -and even a portion of the IRA account, keeping the Roth for self management-
I think the easy money and market momentum for easy trading has certainly given way to a more typical choppier market -
The Spac and speculative momentum has climaxed- It's going to be a sorting out in the months and year ahead of what will be the best way to be positioned as we actually do
see a return to some normalcy- I'd like nothing more than to become a longer term investor- and potentially that's where I'm heading- Too many other things to do with good weather here....
A balanced portfolio of ETFs with perhaps 5-10 additional speculative stock positions - that I glance at only at the end of the day- or the week, with stops to protect my entry and trailed wider- AHH- - There are many other things to occupy my time - but none that are as potentially intellectually stimulating and potentially profitable-
but I'd also rather build warm memories to reflect on rather than account statements-
Best Wishes in your journey ahead!
SD