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Moderator: Duma Assistants: spdpro
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Last Post: 11/17/2017 10:38:37 AM - Followers: 73 - Board type: Free - Posts Today: 0

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.
Sector Trading experiment has been stopped. Yields were fine, just too much work. See Post 18224 for more detail.


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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#18472   have a good weekend > Later gang spdpro 11/17/17 10:38:37 AM
#18471   I have now added 2 EFT's to my Duma 11/16/17 11:33:44 AM
#18470   Look See > ? ragged patterns at best spdpro 11/15/17 10:57:49 AM
#18469   My daily for IWM when to cash Monday Duma 11/15/17 10:32:12 AM
#18468   Here's another chart that I follow. Basically sell jaws57 11/14/17 11:16:43 PM
#18467   Cant remember where i got this chart, but jaws57 11/14/17 10:58:22 PM
#18466   OpEx week is happening > thought something looked strange spdpro 11/14/17 10:40:20 PM
#18465   look, see > Ground Hog day again > Later spdpro 11/14/17 10:06:46 AM
#18464   thanks . likewise had good experiences with them > spdpro 11/13/17 05:38:07 PM
#18463   Nothing happening today. Going sideways on my swing trades. jaws57 11/13/17 03:54:42 PM
#18462   Duma/SPD jaws57 11/13/17 03:50:30 PM
#18461   I have invested in FFTY in the past jaws57 11/13/17 03:44:16 PM
#18460   I am suppose to be getting a weekend Duma 11/13/17 11:25:40 AM
#18459   wonder if IBD even prints paper anymore > spdpro 11/13/17 10:50:22 AM
#18458   I signed up for a free month's subcription Duma 11/13/17 09:01:52 AM
#18457   You too Duma 11/10/17 11:35:43 AM
#18456   have a good weekend > Later Gang spdpro 11/10/17 09:45:20 AM
#18455   Very Bizarre comes to mind > still not playing spdpro 11/09/17 10:26:47 PM
#18454   Could have been a lot worse. No stopouts jaws57 11/09/17 05:29:52 PM
#18453   Today kinda sucks. jaws57 11/09/17 12:26:09 PM
#18452   late look see > Later spdpro 11/08/17 08:58:09 PM
#18451   Finding a few stocks that are popping nice. Duma 11/06/17 03:58:15 PM
#18450   Two nice ABC (w3) buy on HTZ Duma 11/06/17 03:54:37 PM
#18449   Yes you did. Duma 11/06/17 10:18:07 AM
#18448   look see > later , things to do spdpro 11/06/17 10:15:29 AM
#18446   One of many times I said I don't bar1080 11/05/17 10:10:23 AM
#18445   BTW, it's Buffett, two Ts. I don't understand bar1080 11/05/17 09:45:18 AM
#18444   I began modding that board a few years bar1080 11/05/17 09:20:04 AM
#18443   That little fact after all your touting about Duma 11/05/17 08:25:56 AM
#18442   I've never owned BRK. I've mentioned that several bar1080 11/05/17 08:01:10 AM
#18441   Yes it is doing just fine, but the Duma 11/05/17 07:32:38 AM
#18440   B&H beats any alternative. - That is just Duma 11/05/17 07:23:56 AM
#18437   BRK is essentially Buy/Hold and it's doing just bar1080 11/04/17 01:26:28 AM
#18436   B&H beats any alternative. Are you counting dividends? bar1080 11/04/17 01:18:17 AM
#18435   Likewise jaws57 11/03/17 02:29:30 PM
#18434   You too. Duma 11/03/17 12:05:33 PM
#18433   have a good weekend gang > Later spdpro 11/03/17 10:50:13 AM
#18432   not seeing any patterns worth the "effort" here > spdpro 11/02/17 10:24:43 PM
#18431   We seem to be in a bit of Duma 11/02/17 09:14:09 AM
#18430   I do not have a valid clue and spdpro 11/01/17 08:53:51 PM
#18429   thankyou for the info...what do you think is dealerschool2006 11/01/17 02:02:06 PM
#18428   also ECB and BOJ buying madness > no spdpro 11/01/17 01:30:58 AM
#18427   Be interesting to see if Trump picks the jaws57 11/01/17 01:24:19 AM
#18426   yep > been laying low here for quite spdpro 11/01/17 01:18:40 AM
#18425   Thanks, things are settling. Now the FTJ going jaws57 11/01/17 01:10:42 AM
#18424   glad ur back > hope things settled down spdpro 11/01/17 12:51:29 AM
#18423   good one, No changes for me today, holding SQ/BLK/VWM/MTOR jaws57 11/01/17 12:43:43 AM
#18422   tza monthly dates expiry spdpro 10/31/17 08:21:32 PM
#18421   I'm looking at TZA options for November but dealerschool2006 10/31/17 03:07:33 PM
#18420   Starting to refine my process of looking for Duma 10/30/17 12:06:07 PM