Posts Tagged ‘trend following trading models’

Trend Following Tutorial

Trend Following Tutorial

Courtesy of Allan 

In its simplest incarnation, this is Trend Following:

 
 

The SHORT on this SPX Weekly chart was generated at the end of the week of Jun 16, 2008 @ 1317.  It was in force until the end of March, 2009 @ 843.  That trade gained 474 SPX points, or about 36%.  It could have been implemented using an unleveraged index, SPY, for about a 36% gain.  It could also have been implemented using a leveraged ETF for approximately double, or triple that return.  The key focus for this tutorial is that the methodology was SHORT during a severe and prolonged market decline.  

The next signal was a LONG signal, as shown on the chart below:

 
 

This LONG signal was generated at the end of March, 2009 @ 843.  It was EXITED at the end of January, 2010 @ 1074.  The gain on this LONG was 231 SPX points, or about 27%.  

These two signal totaled over 700 SPX points over the course of about two years.  Such are the market times we are in and unless and until these volatile swings come to an end, this is a simple, mechanical, tradable way to participate successfully in these trends.

The trend line you see on the above charts is based on what is called an Average True Range algorithm.  It was written up in the June, 2009 issue of Technical Analysis of Stocks & Commodities.  The algorithm I use for these trends is slightly different then the algorithm written up in the article, not that mine is better, but I think it is more tradable.  

Daily Charts

The same algorithm works on Daily charts.  Below are some examples using the same trend model on the SPX Daily chart:

 

Notice how the Daily Trend Model works in the exact same way as the Weekly Trend Model.  In this case, a LONG signal in early November lasted through late January and gained about 30 SPX points.  Below, the ensuing SHORT signal in late January:

Following the late November, 2009 BUY, the daily trend reversed SHORT in late January, 2009.  Below, the late February LONG signal:

By now this looks the proverbial greatest thing since sliced bread.

Not so fast……looks what happens next: 

The SHORT_EXIT(LONG)_SHORT series of signals in late April is


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Phil's Favorites

"Feel The Market": Trump Warns Fed With Fed Not To Make Mistake And Hike Rates

Courtesy of Zero Hedge

As members of the FOMC gather at the Eccles building for the first day of the central bank's December policy meeting, during which they're widely expected to vote to raise the Fed funds rate for the fourth time this year, President Trump is once again urging the central bank to reconsider - this time urging Chairman Powell & Co. to read an editorial in Tuesday's Wall Street Journal calling for a pause in rate hikes (which in turn followed a similar piece from Fed "hawks" Stanley Druckenmiller and Kevin Warsh).

I hope the people over at the Fed will read today’s Wall Street Journal Editorial before they make yet another mistake. Als...



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Zero Hedge

"Feel The Market": Trump Warns Fed With Fed Not To Make Mistake And Hike Rates

Courtesy of Zero Hedge

As members of the FOMC gather at the Eccles building for the first day of the central bank's December policy meeting, during which they're widely expected to vote to raise the Fed funds rate for the fourth time this year, President Trump is once again urging the central bank to reconsider - this time urging Chairman Powell & Co. to read an editorial in Tuesday's Wall Street Journal calling for a pause in rate hikes (which in turn followed a similar piece from Fed "hawks" Stanley Druckenmiller and Kevin Warsh).

I hope the people over at the Fed will read today’s Wall Street Journal Editorial before they make yet another mistake. Als...



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Biotech

China's win-at-all-costs approach suggests it will follow its own dangerous path in biomedicine

Reminder: We are available to chat with Members, comments are found below each post.

 

China's win-at-all-costs approach suggests it will follow its own dangerous path in biomedicine

Megacity Shenzhen, as seen from Hong Kong, is a center for Chinese finance and tech. AP Photo/Kin Cheung

Courtesy of Hallam Stevens, Nanyang Technological University

The world was shocked by ...



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Kimble Charting Solutions

Is the NYSE Composite Signaling Difficult Times Ahead?

Courtesy of Chris Kimble.

The NYSE Composite (NYA) is testing the bottom of its 12-month trading range this month. In fact, it’s breaking down and out of it… it’s sink or swim time.

Will this be a quick undercut and reversal? Or the start of a deeper correction/bear market? Bulls need to reverse this right now, or it could be a long winter.

Looking at the chart below, we can see that the NYSE composite formed bearish hanging man patterns at (1) multiple times over the past two decades. The ones highlighted were followed by an average 25% decline.

Another hanging man candlestick was formed back in February at (2). This lead to the initial stock market correction early this year. The broad stock index developed a trading range thereafter (blue sh...



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Chart School

Weekly Market Recap Dec 16, 2018

Courtesy of Blain.

A significant selloff Friday had bears continuing to enjoy December and calls for the bulls for the Federal Reserve to save them.  It’s been a very long time since bears have had the upper hand for such an extended period.  Volatility continues to be very high and the charts continue to say “remain in safety”.  The Russell 2000 – the laggard of 2018 – broke a yearly low set in February and the S&P 500 broke October lows to create a “lower low”.

Karyn Cavanaugh, senior market strategist with Voya Investment Management, said that disappointing economic data out of China was the biggest driver of Friday’s losses. “The Chinese data was a dirt sandwich, not because it showed deceleration in the Chinese economy, but because it’s showing...



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Insider Scoop

40 Stocks Moving In Monday's Mid-Day Session

Courtesy of Benzinga.

Gainers
  • Diffusion Pharmaceuticals Inc. (NASDAQ: DFFN) shares rose 65.1 percent to $4.7225 after the US Patent Office awarded the company exclusive rights for the use of its TSC drug in conjunction with tPA for stroke treatment.
  • Synergy Pharmaceuticals Inc. (NASDAQ: SGYP) climbed 34.2 percent to $0.1073 after Health Canada accepted Cipher Pharmaceuticals' new drug submission for PLECANATIDE.
  • Fidelity Southern Corporation (NASDAQ: LION) jumped 22.3 percent to ...


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Digital Currencies

Crypto Bull Tom Lee: Bitcoin's 'Fair Value' Closer To $15,000, But He's Sick Of People Asking About It

Courtesy of ZeroHedge. View original post here.

Listening to the crypto bulls of yesteryear continue to defend their case for new new all-time highs, despite a growing mountain of evidence to suggest that last year's rally was spurred by the blind greed of gullible marginal buyers (not to mention outright manipulation), one can't help but feel a twinge of pity for Mike Novogratz and Wall Street's original crypto uber-bull, Fundstrat's Tom Lee.

Lee achieved rock star status thanks to ...



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Members' Corner

Blue Wave with Cheri Jacobus (Q&A II, Updated)

By Ilene at Phil's Stock World

Cheri Jacobus is a widely known political consultant, pundit, writer and outspoken former Republican and frequent guest on CNN, MSNBC, FOX News, CBS.com, CNBC and C-Span. Cheri shares her thoughts on the political landscape with us in a follow up to our August interview.

Updated 12-10-18

Ilene: What do you think about Michael Cohen's claim that the Trump Organization's discussions with high-level Russian officials about a deal for Trump Tower Moscow continued into June 2016?

...

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Mapping The Market

Trump: "I Won't Be Here" When It Blows Up

By Jean-Luc

Maybe we should simply try him for treason right now:

Trump on Coming Debt Crisis: ‘I Won’t Be Here’ When It Blows Up

The president thinks the balancing of the nation’s books is going to, ultimately, be a future president’s problem.

By Asawin Suebsaeng and Lachlan Markay, Daily Beast

The friction came to a head in early 2017 when senior officials offered Trump charts and graphics laying out the numbers and showing a “hockey stick” spike in the nationa...



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ValueWalk

Vilas Fund Up 55% In Q3; 3Q18 Letter: A Bull Market In Bearish Forecasts

By Jacob Wolinsky. Originally published at ValueWalk.

The Vilas Fund, LP letter for the third quarter ended September 30, 2018; titled, “A Bull Market in Bearish Forecasts.”

Ever since the financial crisis, there has been a huge fascination with predictions of the next “big crash” right around the next corner. Whether it is Greece, Italy, Chinese debt, the “overvalued” stock market, the Shiller Ratio, Puerto Rico, underfunded pensions in Illinois and New Jersey, the Fed (both for QE a few years ago and now for removing QE), rising interest rates, Federal budget deficits, peaking profit margins, etc...



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OpTrader

Swing trading portfolio - week of September 11th, 2017

Reminder: OpTrader is available to chat with Members, comments are found below each post.

 

This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...



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Promotions

Free eBook - "My Top Strategies for 2017"

 

 

Here's a free ebook for you to check out! 

Phil has a chapter in a newly-released eBook that we think you’ll enjoy.

In My Top Strategies for 2017, Phil's chapter is Secret Santa’s Inflation Hedges for 2017.

This chapter isn’t about risk or leverage. Phil present a few smart, practical ideas you can use as a hedge against inflation as well as hedging strategies designed to assist you in staying ahead of the markets.

Some other great content in this free eBook includes:

 

·       How 2017 Will Affect Oil, the US Dollar and the European Union

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About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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