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Moderator: Duma Assistants: spdpro
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Last Post: 7/21/2017 11:20:22 AM - Followers: 73 - Board type: Free - Posts Today: 2

INTRODUCTION (modified 10/2014)

I originally created this board for the specific purpose of discussing the Phase Chart method of trading cycles that was first presented on the ETF SWING & DAY TRADING board, my main board.
I have since changed that goal.  I now much more favor a community of traders who know how to share ideas with each other and discuss ideas about how to improve cycle trading. That is what we have evolved to, and I like it. So if you have an idea, we would love to hear it.
If you are a new trader and want some help, we will do our best to point you in the right direction to get you started. There are no dumb questions on this board?



All of us do a lot of posting on this board with our ideas and our views of what we see. That doesn’t mean that they are all correct. We all bring our history of trading with us, so there will be lots of times that two traders will see the same event very differently. There is nothing wrong with that. 

I for one am still in a very large learning curve and very much appreciate the views of others, even if I don’t agree or can’t understand. So I try to pick and choose what I think works with my personality and my trading style. I have gotten new ideas from the most unusually places. That search never ends. 

So if you disagree with something that I say, please by all means, post back as how you see things and WHY. The WHY is very important. I have totally reversed my opinion on issues many times after hearing a good argument for another view. I respect your right to a different opinion/view. This board, as all boards should be, is about how to make all of us better traders. We learn from each other.

Personal attacks on posters either directly or indirectly will not be tolerated. Continued useless posts will not be allowed.

Yield Summary for 2016

Buy & Hold 
12.0% SPY 
10.8% SSO (stated as 1x) 
 21.6% IWM 
19.7% TNA (stated as 1x) 

Traded with Daily Phase Chart 
16.3% SPY 
38.8% IWM 
 48.9% TNA (a bit of a surprise, same trade dates as IWM) 

Sector Trading with Daily Phase Chart (The 10 SPDR ETFs) 
Independent Trading
19.3% Each sector invested with the same weighting as in the S&P when long 
Rebalance Trading
24.3% Investing long sectors only with weighting each has in S&P, scaled up to 100% 
 26.0% same as above except scaled to 110% when 9 sectors long 
27.7% same as above except scaled to 120% when 9 sectors long 
29.1% same as above except scaled to 125% when 9 sectors long 

PHASE TRADING - I am changing my focus for 2017 to the Daily Charts. See posts 16950 and 17054 for more detail.
The following is a description of how I normally trade each Phase. In the past I gave guide lines for shorting. With my focus now on Daily charts I do not advocate shorting. Long only.
 Mark Down - Should start MD phase in cash. Hold cash until get long signal. Singal is when MACD
(85,90,24) flattens and MACD-histogram(85,90,24)>MA5.

 Accumulation  - Should be long. A few times the trade fails, but is low probability.  If it does fail, just get out and get ready for the next signal. I like to go back to cash if 
MACD-histogram(85,90,24) drops back below MA10.

 Mark Up  - Stay long. At times I have used 2nd support as a stop, but it is seldom needed.

 Distribution  - Go to cash immediately upon entering Distribution. Go long again with the same rules as going long in Mark Down.


IWM Daily Phase Chart

SPY - Daily Phase Chart

QQQ - Daily Phase Chart

Major Indexes plus BRK YTD

The Big Three


Sector Trading

I have changed my direction for trading in 2017. After trading 60min charts for many years, I have decided to go back to daily charts. I am doing this for two reasons. 1) I want to have more free time in 2017, and 2) I have come to believe that Sector Trading with the use of my Phase Daily Charts will give some impressive results. In 2016 this style of trading gained over 25% vs S&P of 12%. I will be very pleased with anything over 20%.

There are no guarantees that this will work, so it is somewhat an experimental plan.
I will be adding additional information in this area and document the results.


List of key posts that I wrote on Sector Trading as I developed my plan. 
16870 - why Sector investing
16901 - Phase trading by Sector
16950 - initial investigation and results for trading by Sectors
17054 - Investors vs Traders
17065 - how to become rich
17090 - final yield numbers for 2016
17130 - Rebalance and Independent Invest plans described


10 Habits of Highly Profitable Traders
1. Create asymmetry in your trading by using stop losses. Profitable trading only happens by making more money than you lose. Big losses are the main cause of not being profitable. Eliminate big losses by cutting your loss when proven wrong. 
2. Have a great risk/reward ratio on entry. Give yourself the potential to make two or three times more if you are right than you could lose if you are wring. Let a winning trade run until there is a reason to exit. 
3. Trade with the odds on your side. Trade historical patterns and price action that has worked in the past. 
4. Trade a plan and a system using quantifiable signals instead of your own predictions and opinions. 
5. Trade your plan with discipline and perseverance. 
6. Limit your capital at risk on any one trade to eliminate your risk of ruin. 
7. Work so hard when the market is closed that all their is to do when the market is open is take your signals. 
8. Have a system that profits in up and down trends. 
9. Have a system that works in multiple markets. 
10. Trade position sizing that does not cause your emotions or ego to get louder than your trading plan.

Linda Raschke's 12 Rules for Technical Trading.

1. Buy the first pullback after a new high. Sell the first rally after a new low. 
2. Afternoon strength or weakness should have follow through the next day. 
3. The best trading reversals occur in the morning, not the afternoon. 
4. The larger the market gaps, the greater the odds of continuation and a trend. 
5. The way the market trades around the previous day’s high or low is a good indicator of the market’s technical strength or weakness. 
6. The previous day’s high and low are two very important “pivot” points, for this was the definitive point where buyers or sellers came in the day before. Look for the market to either test and reverse off these points, or push through and show signs of continuation. 
7. The last hour often tells the truth about how strong a trend truly is. “Smart” money shows their hand in the last hour, continuing to mark positions in their favor. As long as a market is having consecutive strong closes, look for up-trend to continue. The up trend is most likely to end when there is a morning rally first, followed by a weak close. 
8. High volume on the close implies continuation the next morning in the direction of the last half-hour. In a strongly trending market, look for resumption of the trend in the last hour. 
9. The first hour’s range establishes the framework for the rest of the trading day
10. A greater percentage of the day’s range occurs in the first hour then was the case in the past, and thus it has become increasingly important to trade aggressively if there are early signs of a strong trend for the day. 
11. There are four basic principles of price behavior which have held up over time. Confidence that a type of price action is a true principle is what allows a trader to develop a systematic approach. The following four principles can be modeled and quantified and hold true for all time frames, all markets. The majority of patterns or systems that have a demonstrable edge are based on one of these four enduring principles of price behavior. Charles Dow was one of the first to touch on them in his writings. 
Principle One: A Trend Has a Higher Probability of Continuation than Reversal 
Principle Two: Momentum Precedes Price 
Principle Three: Trends End in a Climax 
Principle Four: The Market Alternates between Range Expansion and Range Contraction! 
12. In the world of money, which is a world shaped by human behavior, nobody has the foggiest notion of what will happen in the future. Mark that word – Nobody! Thus the successful trader does not base moves on what supposedly will happen but reacts instead to what does happen. 

Trading Checklist
1. Risking only a fraction of your capital
2. Trade with the trend
3. Trade from an area of value
4. What is your entry tirgger
5. Where to exit if you are wrong
6. Where to exit if you are right
7. How will you manage the trade
8. Are you following your trade plan

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Three X ETF's


#18001  Sticky Note The FAANG stocks are part of what Patrick Duma 07/15/17 10:45:54 AM
#18025   look, see > have a good weekend spdpro 07/21/17 11:20:22 AM
#18024   > 32.98 ??? spdpro 07/21/17 12:44:33 AM
#18023   Decided to play a very different game with Duma 07/20/17 03:53:40 PM
#18022   Lets hope the HL holds. If not, this jaws57 07/19/17 09:37:04 PM
#18021   After today I can see a 3 wave Duma 07/19/17 09:08:29 PM
#18020   I got a valid daily signal, so i jaws57 07/19/17 05:18:32 PM
#18019   You might be right, put in a LH. jaws57 07/19/17 12:02:10 PM
#18018   My impression of KBH is that it is Duma 07/19/17 11:51:21 AM
#18017   Im up about 4-5% so far in MU. jaws57 07/19/17 11:23:11 AM
#18016   Still selling MU puts. Last week's put I Duma 07/19/17 10:36:02 AM
#18015   Normally I only look at a 1 month Duma 07/19/17 10:28:18 AM
#18014   That is what I was thinking last night Duma 07/19/17 10:27:01 AM
#18013   Im thinking same, w4 is over and now jaws57 07/19/17 09:52:43 AM
#18012   Never seen this, some premarket readings on $TNX?? jaws57 07/19/17 09:43:43 AM
#18011   The market will keep going up until it jaws57 07/19/17 09:33:44 AM
#18010   I am long 3 different positions. Duma 07/19/17 12:49:39 AM
#18009   I will update my chart... Im on my Smurfedtear 07/18/17 11:50:02 AM
#18008   out CMA 1.4% gain. Leaves long MU/CMI/BCOR/NOC jaws57 07/18/17 11:06:17 AM
#18007   I forgot, timing is perfect for a dull Duma 07/18/17 09:02:39 AM
#18006   Could you post a chart to show what Duma 07/18/17 09:00:02 AM
#18005   don't forget it's OpEx week spdpro 07/17/17 10:08:17 PM
#18004   i believe a subwave 3 is coming tomorrow. Smurfedtear 07/17/17 09:10:12 PM
#18003   "But of course all trades don't work out. Duma 07/17/17 11:19:09 AM
#18002   I saved that article > found it pretty interesting spdpro 07/15/17 11:50:48 AM
#18001   The FAANG stocks are part of what Patrick Duma 07/15/17 10:45:54 AM
#18000   So exited NFLX Fri at close for a Duma 07/15/17 10:26:17 AM
#17999   Interesting. Got my eye on 2024 one already. Duma 07/15/17 09:23:16 AM
#17998   have a good weekend gang > Later spdpro 07/14/17 06:06:05 PM
#17997 spdpro 07/14/17 11:28:26 AM
#17996   On Aug 21st at 11:48am I will be Duma 07/14/17 09:57:26 AM
#17995   Just saw that NFLX announces earning Monday. That Duma 07/14/17 09:49:14 AM
#17994   NFLX did break the 60m 8ema yday, but Duma 07/14/17 09:22:15 AM
#17993   there's seems to be a clear reversal stick Smurfedtear 07/13/17 09:54:43 PM
#17992   seems like were back to this mode > spdpro 07/13/17 08:41:24 PM
#17991   C, JPM, WFC, all before the bell spdpro 07/13/17 04:09:18 PM
#17990   Was the 10am high the surge to end Duma 07/13/17 10:24:20 AM
#17989   Looks like w3 is coming to an end, Duma 07/12/17 04:18:52 PM
#17988   No exact rules here but just has to Duma 07/12/17 04:10:06 PM
#17987   look, see > Later spdpro 07/12/17 04:00:29 PM
#17986   it broke thru R2... rsi at 80... Smurfedtear 07/12/17 11:06:16 AM
#17985   When I get the signal M85 flatten/XO also jaws57 07/12/17 10:56:10 AM
#17984   Yellen is doing her best to kill the Duma 07/12/17 10:46:16 AM
#17983   Would have never guessed this. 2016 actually saw Duma 07/12/17 09:18:24 AM
#17982   Who knows if it is going to hold, Duma 07/12/17 09:10:15 AM
#17981   When I said, "Are you doing this sorta Duma 07/12/17 08:54:55 AM
#17980   You very well could be right on the Duma 07/12/17 08:34:54 AM
#17979   On this one (10mTNA) the 60m H1 chart jaws57 07/12/17 12:41:10 AM
#17978   NFLX is at sub 4 going onto sub Smurfedtear 07/11/17 10:48:37 PM
#17977   Remember when I posted the trade display of Duma 07/11/17 04:53:48 PM
#17976   I really don't know either, but gave me Duma 07/11/17 04:29:53 PM