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Moderator: Duma Assistants: spdpro
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Last Post: 8/21/2017 11:15:42 PM - Followers: 73 - Board type: Free - Posts Today: 7

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
#18193   The totality experience was well worth the drive. Duma 08/21/17 11:15:41 PM
#18192   remember > this is Jackson Hole week spdpro 08/21/17 06:25:00 PM
#18191   was good to have some afternoon shade "needed" spdpro 08/21/17 03:11:15 PM
#18190   97% is pretty damn close to total. jaws57 08/21/17 01:39:48 PM
#18189   Enjoy, we will get about 65% cover here. jaws57 08/21/17 01:37:27 PM
#18188   close enough > not going out in traffic > spdpro 08/21/17 12:15:39 PM
#18187   look > see > Later spdpro 08/21/17 10:59:43 AM
#18186   enjoy the bbq > be a while before spdpro 08/19/17 04:24:06 PM
#18185   You have a good one also. Monday I Duma 08/19/17 12:41:39 AM
#18184   Have a good weekend gang > another OpEx done spdpro 08/18/17 05:01:27 PM
#18183   look see > Later spdpro 08/18/17 02:40:58 PM
#18182   I agree, not bad PB. Could go to jaws57 08/18/17 11:09:30 AM
#18181   Yday's drop felt really bad, but when it Duma 08/18/17 10:12:18 AM
#18180   I thought around 2 there might be a Duma 08/18/17 10:03:15 AM
#18179   check PM for video of assumed equation via Sosnoff spdpro 08/17/17 09:40:48 PM
#18178   Ok CITYHAWK 08/17/17 09:39:42 PM
#18177   look at /VX in all after hours to spdpro 08/17/17 09:34:34 PM
#18176   Well, i hope there will be some action CITYHAWK 08/17/17 09:13:09 PM
#18175   is that over all or for tomorrow ? CITYHAWK 08/17/17 09:05:58 PM
#18174   SVXY ??? Nice twist for me . CITYHAWK 08/17/17 09:00:07 PM
#18173   tos calc'd via options moves for > spdpro 08/17/17 07:17:17 PM
#18172   "good logic bad logic ?" dictates wait spdpro 08/17/17 07:04:40 PM
#18171   index options expire in morning the rest Friday spdpro 08/17/17 04:39:57 PM
#18170   yep > that was the 2nd VOL pop spdpro 08/17/17 04:34:20 PM
#18169   took out 2. (YUMC +2.1%) (UCTT +4.8%) Im jaws57 08/17/17 04:12:42 PM
#18168   XIV CITYHAWK 08/17/17 03:52:42 PM
#18167   setting up alright, but not sure we get jaws57 08/17/17 03:41:04 PM
#18166   look see > Later spdpro 08/17/17 02:35:24 PM
#18165   The big3 are all setting up for 10min Duma 08/17/17 01:55:30 PM
#18164   FOMC mins day spdpro 08/16/17 11:00:41 AM
#18163   as an example now unless you pay Photobucket I spdpro 08/16/17 10:57:35 AM
#18162   iHub's Image Gallery is all I have been Duma 08/16/17 09:55:08 AM
#18161   OT > you may not be aware of spdpro 08/16/17 01:39:25 AM
#18160   hawk > here is what I'm looking hard spdpro 08/15/17 06:49:45 PM
#18159   back at work > have not been watching >Later spdpro 08/15/17 04:45:42 PM
#18158   Yep, I think sideways for a bit. Waiting jaws57 08/15/17 01:24:53 PM
#18157   look see > Later spdpro 08/15/17 11:32:28 AM
#18156   It is for sure and has been for Duma 08/15/17 10:13:59 AM
#18155   Seems like TNA this morning is kinda weak keepsinvesting 08/15/17 10:03:13 AM
#18154   This probable explains why bottoms are usually a Duma 08/15/17 10:01:45 AM
#18153   for what it's worth last ES OpEx line spdpro 08/15/17 03:59:50 AM
#18151   FUTs up good at the moment, YUMC gave jaws57 08/15/17 01:07:05 AM
#18150   Thanks let me dig in a bit . CITYHAWK 08/14/17 10:04:53 PM
#18149   I prefer the term brute force manipulation but spdpro 08/14/17 09:22:42 PM
#18148   Short squeeze... Overshort market lol.... I have nothing keepsinvesting 08/14/17 08:44:42 PM
#18147   AH cram job > on what ?? crazy spdpro 08/14/17 08:19:05 PM
#18146   back to the last OpEx lines > be spdpro 08/14/17 05:52:39 PM
#18145   Well you have one big winner, one okay, Duma 08/14/17 04:09:16 PM
#18144   old is new again > spdpro 08/14/17 02:50:18 PM
#18143   Over the last many years I have used Duma 08/14/17 02:07:32 PM