Thursday, May 26, 2016

Trend Trading long term portfolio strategy


What is a trend in trading?
A trading strategy that attempts to capture gains through the analysis of an asset's momentum in a particular direction. The trend trader enters into a long position when a stock is trending upward (successively higher highs).

I am starting a long term portfolio utilizing 3x index funds that mirror the Nasdaq and Russell.
I will be going both long and short on my trades. I am looking to ride the trend for 1-3 months or longer while reducing my risk and increasing my wealth.
I plan on pyramiding my position size by scaling into my trades once they are profitable. Usually after one week I will add only if I am showing a profit. Never average down and will use a stop loss of 18%.
I will be locking in half of my position once I feel the trend starts to slow.
I will be using TQQQ, TNA for long and SQQQ, TZA for shorting the indexes.
I am starting with $100,000 USD working capital.

Monday, March 7, 2016

SCOR Stock COMSCORE INC COM 3-7-16

SCOR Stock COMSCORE INC COM
Catalyst:
ComScore's Stock pluges 28% to near 2-year low after annual report filing delay
Chart:
Result

Monday, February 29, 2016

Importance of Anchor Charts or Guidance Charts

Importance of Anchor Charts or Guidance Charts
When trading you always want to know the short term trend and the long term trend. It doesn't make sense to try and short a stock that is in a downward trend on a 1min time frame but is in an uptrend on a 5 minute time frame.
So i usually will have multiple time frames open when I scan and when I trade. I want to know if the short time frame agrees with the longer time frame and vice versa.
I usually stack a 2min chart above a 5min chart or I have found that the 3 minute chart works nice with the 10min chart.
But for most percent losers under 10 dollars they move very fast very fast. So to really get the best entries I use a 1min chart and will stack a 5min chart below it to confirm that they are in agreement.
In the chart below both the 1min and 5min charts agree at the market open and are both red in the TTM trend.


How I apply each indicator and study into my trading decisions

Upper Studies
  • First I start with the TTM Trend. I want to make sure the bars are red when the market opens.

  • Then I want to make sure the FW MOBO Basic is showing Red so I know the stock is in a downward trend.

  • Next I watch the Bollinger bands and the 13EMA. I want to make sure the stock is moving down the bottom Bollinger band and its trending below the 13 EMA line.

  • I then Add the TTM scalper alert which will give me up and down arrows which shows higher highs and lower lows. buy or sell signals. I just follow these as a reference.



  • I then add the PPS indicator which also gives me up and down arrows. I also just use these as reference and make sure they aren't conflicting with the TTM scalper alert arrows. If there is confusion or conflict I avoid the trade because usually that means there is sideways price action.


Lower Indicators
  • TTM Squeeze was designed by John Carter. It's used after the red dot is fired off the trade is now active. I have found that the squeeze isn't always in that mode on the stocks I want to trade so I just make sure its value is negative and its starting to show a red histogram. After the red goes away you will see yellow bars. After two consecutive yellow bars you will want to cover and sell 1/3 of your position.
  • TTM Wave I have separated this indicator into two. The upper wave the crayn and yellow color. You want to take the trade when the indicator crosses below zero and becomes negative or while its still positive but looks to be going negative.
  • Next is the Major Wave which is light blue and dark blue. The wave has to be negative and light blue which means it a more powerful trend. It mostly for direction. So if the wave is positive you wont take a short trade and vice versa.
  • Finally I use a momentum indicator and just make sure its negative
I then will sell my remaining 2/3 position after the TTM Trend shows two consecutive blue bars 

To learn more about the squeeze I found a very useful PDF which gives a lot more description then I provided. 




How I setup my studies and indicators

How I setup my studies and indicators using the TD Ameritrade think or swim platform. All of the indicators are free when you have a TD Ameritrade account.

For my upper studies:
  • TTM Trend: Watch Video
  • MovingAvgExponential 13EMA length
  • Bolinger Bands (I removed the middle line plot and use the 13EMA instead in its place )
  • FW_MOBO_Basic ( I removed all lines and plots which shows only the Green and Red painting)
  • TTM Scalper Alert Watch Video
  • PPS (I removed all lines and plots except for the breakout and breakdown arrows)

For my lower indicators:
  • TTM Squeeze Watch Video
  • TTM Wave (I added the TTM wave twice and separated the Major Waves from the Minor Waves)
  • Momentum


How I find my stocks to trade. My scanner setup

I primarily use two scanners to find my stocks to trade (biggest losers & earnings losers). I set the parameters to find stocks between the price of $1-35 a share that have traded over 100,000 in volume. I have also added the ttm squeeze to the scan  and wrote a custom code to show a color vs a number to help me visualize and pinpoint which stocks have the strongest downtrend across multiple time frames as the market opens.

Biggest Percent Losers

Earnings Losers 

Here is the custom code for the Thinkscript editor to change the TTM squeeze values into a color:
input price = CLOSE;
input length = 20;
input nK = 1.5;
input nBB = 2.0;
input alertLine = 1.0;

def squeezeHistogram = TTM_Squeeze(price, length, nK, nBB, alertLine).Histogram;

plot hist = if squeezeHistogram>= 0 then 
    if squeezeHistogram> squeezeHistogram[1] then 2 else 1
    else if squeezeHistogram < squeezeHistogram[1] then -2 else -1;

assignBackgroundColor(if squeezeHistogram >= 0 then 
    if squeezeHistogram > squeezeHistogram[1] then color.CYAN else color.BLUE
    else if squeezeHistogram < squeezeHistogram[1] then color.RED else color.YELLOW);

hist.assignvaluecolor(if squeezeHistogram >= 0 then 
    if squeezeHistogram > squeezeHistogram[1] then color.CYAN else color.BLUE
    else if squeezeHistogram < squeezeHistogram[1] then color.RED else color.YELLOW);