PocketPAT

Currently Loving: AMAT, APPN, BILL, COP, CPRI, CREE, DAR, DISH, DKNG, EFX, EMN, EOG, FANG, GM, IAA, IIVI, KLAC, KMB, KSS, LRCX, MGA, NTAP, PNW, TGT, TTD, WORK, YUM and Z.

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PocketPAT

Since my last update, I’ve been diving deeper and deeper into an exclusively swing trading strategy. It started with, again, wanting to day trade; but not being satisfied with missing out on volatile market opens and overnight movement (essentially, entire multi-day move price-action). I’d begun to focus on 1-2 day swings, but the level of risk I was taking on by splitting full equity into two stocks overnight was more than I’d felt comfortable with. I’d fully trusted the tickers I was trading, but my stingy stop-outs had the potential to be easily triggered or overblown during extended hours. This led me to gradually split my equity further and further: 5 positions, 8 positions, 10 positions, 12 positions; until I’d found a swing setup that could provide consistent profitability but also give plenty of room to avoid unnecessary stop-outs. During this time, I’d also experiment again with MACD, RSI and even VWAP (both session and weekly). I’d come to realize that TradingView is really a one-stop resource for trading (outside of executions). I no longer use WeBull, as TradingView’s charts are perfect for swing trades. While WeBull’s software is most visibly pleasing, there is far more customization at TradingView. ThinkorSwim was always a great second option for charting, but its primary use for me throughout this year: indicator alerts; has been taken over by TradingView as well. I can now easily implement chart alerts without too much work (which is phenomenal for back-testing quick ideas) and the alerts are much easier to manage at TradingView as well. I was struggling to figure out how to alert on VWAP crossovers, as I just couldn’t seem to get it to work at ThinkorSwim; but with TradingView, it’s literally the click of a button. I was skeptical with the fact that TradingView is a web-based trading resource, but it’s been pretty reliable with real-time quotes and there’s no need for split second reaction for swings. Overall, the fact that TradingView offers everything in one spot and the fact that it’s easily accessible in its exact form on any device makes it the best platform I’ve used. I’ve been using it alone for the past month and have purchased another year of Premium level subscription (for open-ended alerts and extra indicators, which works best for my Net SMA strategy). Back to strategy: I’ve tested and tested and tested; and in the end, there is no better strategy than a simple Net SMA for swings. As much as I’d love to couple it with other indicators for supportive decision-making, the Net SMA consistently provides the best entry and exit signals by itself. All other technical indicators either support the same signals or offer nothing but doubt and confusion. So, the only thing on my chart at this point is the Net SMA. It tells me when and where to get in and out, both long and short. As I have it set now, it makes sure that I’m on the sidelines during periods of uncertain consolidation; while also making sure that I avoid false entries and meaningless shake-outs (for the most part). The biggest change that took place with each passing week, is that I’ve slowly use larger and larger chart intervals. I went from 10 minutes, to 20, to 30, to 1 hour, to 2 hours and finally settled on 4 hours. I’d experimented with a 3 hour, 45 minute, 40 minute and daily, but 4 hour candles on Heikin Ashi have provided the cleanest and clearest perspectives. Using larger timeframes, I’d felt that I’d needed a second, shorter timeframe chart to confirm the best entries and exits after indicator alerts. After a week or two of doing this, I’d eventually settle on using 30 minute chart Net SMA crack/cross ALERTS, but only visualizing and trading from a single 4 hour chart. One chart, one indicator, one entry and one exit for each position. I also have the S&P 500 up on a daily chart, but it's more for novelty. I don't really care what direction the market is going, but because each stock reacts overall market momentum differently. A stock may be heading downward, but only consolidates as the market is running up. If it's beyond the Net SMA, I'm 100% taking a position, because when the market begins to turn, that same stock will follow it (as the trend indicates). I’ve also decide on using a fixed set of 10 positions, fully invested, with -5% stop-outs. It took a bit of time to figure out the right settings for my Net SMA. I’d wanted it tight enough to take most of each move’s profits, but not too tight to where I’d be shaken out too soon. I’m fine with holding for 1-2 weeks, but I’d rather not hold beyond that; as I’d like more overall cash flow. I’d wanted it wide enough to avoid false entries, but not too wide that I’d miss solid entries on profitable moves both ways. Lastly, it had to be “crash proof”; meaning that, in the case of an overnight crash or huge move (outside of something expected like earnings), I’d wanted the Net SMA to make sure that I was on the right side. No one really knows when something like a crash will happen, but if you look at most crashes that take place, there are almost always a couple of days of rollover before the huge crack. The same seems to be true on the long-side as well, but this obviously is most applicable on large cap stocks. I now have my Net SMA set to 15-60 on the 4 hour chart and it’s served me well. There may be occasional breakevens or small losses, but the majority of my trades will only take place during hugely profitable runs and cracks. I don’t care about support or resistance, I don’t care about lines, breakouts or breakdowns; only the Net SMA. The only entries and exits that I take are based on SMA driven momentum; and using clean and clear, slow-moving stocks, which barely rip or crack overnight (but have volatile moves over days or weeks), I’ve been trending at about a 25% overall account profit per month ($25k account = $6k in gross profits on average). I plan to double position equities only after each account milestone of $50k, $100k, $200k, $500k and $1m; but my monthly profit goal of 25% (which I estimate as low-bar, based on profit potential) will always remain the same (so at $100k, 25% = $25k/month). Easy peasy, slow and steady, long and short, rinse and repeat. I'm only running scans every four weeks, to let all 4 hour charts develop into a solid rhythm of clean and clear price-action; and my goal is to have 3x the amount of tickers that I need (I'm trading 10 positions, so 30 watchers is ideal). I’ve concluded many times that my strategy was complete, but all I can say now is that I’ve never gone this long without changing it and it's never felt as controlled and comfortable as it does now. I’ll wait another month or so, for confirmation, and then begin to bulk upload trades on a weekly basis =)

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PocketPAT

Another profitable day. Consistency, consistency, consistency. Getting these reps in for another week or two, until I then declare myself on "rinse and repeat" mode. I've made a few slight changes today. First, I'm back on the 10-minute chart, as the 15-minute is still just a tad bit too broad for my liking. 10-minute candles seemed perfect before and yet again they've won my heart. Secondly, I'd first widened the SMA by five, until just now realizing that the EMA is actually MUCH better for me. While I love the simplicity of the SMA on wide swinging stocks like OKE, it's too slow for quicker moving stocks like FANG and MPC. I'd actually decided today to just use the wider "Loose" SMA band of 50-60, as it really cleaned up the chart on OKE and others; but the inkling of back-testing the tighter 30-40 EMA on MPC and FANG (which I would LOVE to play, but the SMA moves are too wide; leading to mostly break evens on the swings), it's VERY clear now that I should be sticking with the EMA. The funny thing is that I'd first wanted to go with 20-25, then 25-30, but 30-40 is perfect. Not only would I have been able to capture the same SMA moves on OKE with the 30-40 EMA, but I'd be able to capture the quicker (and honestly, more profitable) moves on MPC and FANG. Lastly, I've decided to take partial profits on each position; not just at 3:55PM (to swing the remaining half/initial lot), but also if the MACD starts producing smaller momentum candles. Smaller momentum candles on MACD signals that the directional shift has begun; and so it'd be best to at least take partial profits, so that I can lock in solid gains in the case that the pullback (in my direction) turns into a true reversal. The only way I'd reenter is on a failed reversal for continuation. Things are shaping up quite nicely =) #ElRoboto #ElWizard

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PocketPAT

Expanding/refining my "choppy market" swing preparation, I've decided to reopen my scan to all sectors, extend the price range to $20-75, lower the market cap and volume averages to 2B and 2M respectively and lower my long-term "clean history" requirement from ten years to just five. All of these changes should provide extra opportunities in the case that my favorite tickers go choppy. I'll still trade one ticker at a time, until the price-action no longer serves me; but I don't want to miss out on tickers like EBAY, just because they aren't Energy stocks, which can have ultra clean price-action for weeks at a time. I'll still look to keep my watchlist under 20 total.

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PocketPAT

The only thing that keeps me up at night (literally, on a Saturday night) is the nagging thought in the back of my head that OKE and other stocks have only been so clean over the past couple of weeks. Before that, it was chop city. This is why I’ve accepted the “adaptive” approach to SMA length, based on “market conditions”; but the obsessive part of me can’t stop wondering what can be done to prepare for this ahead of time. So tinkering with the WeBull iPad app, in bed, I’ve back-tested with different SMA variations to see which would have worked during the past year in choppy conditions; and have settled on one refinement to my strategy. In clean market conditions, I‘ll stick with the 25-30 SMA band, which seems to serve me well, avoiding both early position entries and late exits; but in choppy market conditions, I’ll use a wider 50-60 SMA band. This wider band will ride the overall trend of the chops, providing volatile yet ultimately profitable swings over 2-4 days at a time. Though, before I utilize the widened SMA strategy during choppy conditions, I would first seek to keep the tighter 25-30 SMA band on an alternative ticker, which still had clean enough price-action from my watchlist..... So it was written, so shall it be done; but now I’m wired, so I’ll play Hitman on PS4 instead of sleeping =)

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PocketPAT

Expanding further on my qualifying tickers for swing trading, I've decided to only deal with stocks that have provided healthy price-action on the WEEKLY chart; for at least the past 10 years. This idea came to me as I'd suddenly had an urge to review OKE's long-term chart history. I'd realized that a stock with solid LONG-term price-action would likely be safe from any extreme downturns (or upturns on the short side). I am not f**king around when I say that clean, clear and predictable is paramount. I want my strategy absolute. Making this change, not only will my trusted stocks be large caps, not only will they be trading in safe sectors, not only will they be priced highly enough to avoid penny pinching gamblers and not only should they rarely move unexpectedly after hours; but they will have also proven to provide clean and healthy price-action for a decade or more. After a quick comparison between my current watchers, OKE is clearly the cleanest energy stock on the market with clean price-action since the 1970s. FANG is only as old as 2013 and the price-action has been scratchy throughout almost it's entire history. While this may be great for short-term volatility, it's not reassuring for overnight security. ----- 1:17PM: After reviewing and re-flagging all charts in my scan results, the only stocks that survived the personal criteria are VLO, COP, MPC and OKE. Still, OKE is currently the cleanest and clearest, so I will continue trading it until the time comes to look elsewhere. I'll also continue scanning for new tickers, but only once every two weeks. Things are shaping up quite nicely. Til next week =)

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PocketPAT

Beautiful. This is exactly the kind of chart that I look for =) . Click the image, then right-click and open the full image in a new tab for clarity. This is on the 30-minute TradingView chart. The reason that I love the Energy sector is that it consistently provides huge swings in both directions (the best volatility). Until it stops serving me, I'll only be trading OKE every day. With my current account size, every 0.50 cent move on this chart equals $500. There are thousands of dollars in easy profits on this chart, but consistency is key. Let's see what next week provides =)

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PocketPAT

Pretty awesome week. I think that the usual bouncing around of my strategy has finally come to an end. Over the past two weeks, I've re-dabbled with swing trading, bounced back to day trading and finally settled back where I originally was, lol with multi-day Momentum Swings. All of the pieces that I've found over the past year have really seemed to come together. I've truly been picking up on small things that would eventually build my overall trading plan. Though I've found profits over the past month, I've always seemed to struggle with finding a consistent path of profitability. This week, out of desperation, I subscribed to Super-Pro; just to see if Superman's strategy could compliment my swinging method. While it was pretty awesome, the plays that he calls take between a day and a week; but more often than not, they may take two to four weeks to play out. In the end, Superman's strategy is exactly what he markets it as: something for people to do if they REALLY don't want to sit in front of the computer all day. With that said, I'd decided that my own swing strategy would be more consistently and immediately profitable for me over Superman's. His plays have explosive potential, but I'm more than happy with smaller and more FREQUENT moves. Also, I've really grown accustomed to trading the stocks that populate my scan. Superman may swing thinly traded and lower market cap stocks that I just don't feel comfortable with. While I trust his judgement, the slower profit potential is really what turned me away. I'm looking to make trading a serious secondary income and just don't have the patience for those super drawn out moves that honestly will provide less profit than my own swing strategy in the long-run. Again, it's an awesome service and well worth the $250 to see what was behind the curtain. I then turned to Investor's Underground, to again see what potential they could provide. After two years, I'm fully comfortable with trading in general and my skills have come a long way; but the only thing that I was missing was solid (and FREQUENT) plays with huge potential. Knowing that Nate (from IU) focused more on large caps (like me), I was very interested in experiencing the platform and it's users all around. Blah, blah, blah--- in the end, Investor's Underground is phenomenal. From the chatroom, to the watchlists, to webinars, to the MORNING CALL (whaaat? awesome) and everything else: IU is sooooo much better than...... (other services). I couldn't see myself paying $8000 annually for (nearby services) when for only $300/month or $1900 per year, I can have everything and MORE than (nearby services) only provides for (challenge) students. The main reason that I have no interest in joining (nearby challenge services) is that I'm 1000% into large caps only at this point. While there are HUGELY successful students in (nearby chatrooms) and I applaud them, I understand that I need to stick to MY STYLE of trading in order to be successful. I'm not into OTCs, I'm not into stocks trading less than 2 million shares per day, I'm not into low floats and I'm not into noisy chatrooms (with all due respect though). I understand that those things are never going to make ME successful. In the end, while IU is amazing, I've come to realize that I also am not into trading hype plays or huge movers. Over the past two months, it's become super clear that what I've always harped on is truer than ever: I need CLEAN and CLEAR, PREDICTABLE charts, that will CONSISTENTLY provide ALL-DAY and/or multi-day moves. The biggest turn off from IU (though, not their fault) is that many of the stocks that Nate and the chatroom focuses on are already on my scan. So if I'm already trading these stocks on my own and I am fully comfortable with my strategy, I just don't see the value in paying $300/month. You could say the chatroom access, but I muted everyone except Nate and the moderators anyway so... Anyway, I've realized today that my struggles these past few months have been in my reluctance to TRULY adopt a swing trader's mindset. I really needed to break out of that day trader shell, in order to be comfortable using WIDER SMA/EMA lengths and longer chart intervals like 15 and 30-minutes. I've been trying to trade multi-day moves like a swing trader, but with day trader glasses. That ended this week. I've been having consistent profits and have secured what I believe is the final trading setup. While I've decided to use an ADAPTIVE approach to setting the SMA length, I will now use just TWO charts. For scans, I will use the 30-minute chart on TradingView. There is NOTHING on the chart except a 12-15 length SMA band and that length is specific to mirror that which is on my other (intra-day) WeBull chart. On WeBull, I'll be using the 15-minute chart with a 25-30 band SMA, VWAP and MACD. The MACD's signal smoothing is set to a maximum level of 50, so that I can see the absolute beginnings and ends of each all-day/multi-day move. I will only enter HALF-SIZE on a crack/cross beyond BOTH VWAP and the SMA band, entering the other half ONLY when MACD confirms the first candle of a direction reversal. As always, it's Heikin Ashi on both charts. Standard candles just look like mess to me now. I take half of the profits at 3:55PM and swing the other half overnight. Trading large caps with clear charts, which rarely move after hours in general, I feel that swinging overnight will pose a low risk. I may adjust the swing amount over time. This strategy has been perfect, but the most important aspect is still in trading the cleanest and clearest charts that I can find. Also, it's been confirmed that the best way for me to be consistently profitable is by trading ONE ticker, not only at a time but for GOOD. After watching an Oliver Velez Trading video, where he discussed why trading one ticker is best, it reminded me that my most consistent profits came from the weeks where I was only trading ALLY or FANG or MGM or whatever. That's when it felt confirmed. Oliver is a former market maker who's apparently been trading Apple (AAPL) 95% of the time for over 15 YEARS... What I've decided to do is to stick to ONE SECTOR (Energy) and trade ONE STOCK, EVERY DAY, for as long as it provides great price-action. I'd already known that this made SO MUCH SENSE, because a clean and clear chart with huge swings will require VERY LITTLE planning to trade. If you trade the same ticker every day, you'll anticipate not only how it moves but what moves are likely to come next (rather than trying to keep up with dozens of "hot plays" with a bunch of patterns that not only come and go but change their natures in general). So, with my new sizing strategy using MACD, my "trade one ticker" theory validated and my understanding that it's ok to adapt the SMA to market conditions; this has been the most consistently profitable week in a long time. My main tickers this week were FANG, MPC and OKE. At this point, I seem to be averaging $400-800 per day. =)

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PocketPAT

I've decided to comfortably narrow my focus to just THREE stocks, all in the same sector. I've realized that six to nine stocks may be unnecessarily busy and trading all within the same sector will give similar (easier) price-action. It will also give me three different perspectives for confirmation on which direction the overall sector is moving in. I'd known previously that the Finance and Energy sectors typically have the cleanest long-term charts, but I'd first decided to go with Finance for it's slower (safer) price-action. I'd then decided that, while the Financial stocks are ultra-clean, the Energy sector has tickers that move much further (still on safe price-action). I'd previously tightened my average daily range to 0.75-1.50, with the idea that higher ADR stocks (since they move so much within a day) will always have faster price-action and/or bigger spreads. Though, it's occurred to me now that this is not necessarily the case. It really depends on the overall chart. With the Energy sector giving huge swings lately, it seems to be common that these stocks will move slowly, but greatly in one direction almost all day.

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PocketPAT

HUGE discoveries this past week. My strategy was pretty great, but still (as usual), there just seemed to be a few pieces missing. I could see the potential on the charts, but for some reason, I was struggling to MAXIMIZE the ability to capture it. At first, I'd widen the band of SMA to 90-100 on a 2-minute chart for less shakeouts. Then, I decided to play VWAP only at market open; until the first SMA crack or cross. I made VWAP faint on the chart, to avoid it being too distracting throughout the rest of the day. The strategy progressed. Yet and still though, I didn't like how trading felt during the first two hours of the day. Typically there were two problems: (1) the first 30 minutes are almost always too volatile on the chart, making it too hard to determine which direction the stock will take; resulting in way too many costly shakeouts. (2) This problem is compounded by the typical wide spread that many stocks may have during this time. The easily solution is to avoid the first 15-30 minutes altogether; a pretty handy tip that I got from listening to Tim Bohen. HOWEVER, my strategy is essentially centered around trading SMA cracks/crosses. While I've widened the SMA to take bigger (half day/all day) moves (for max profits on clean charts), the first 15-30 minutes of each day can easily make up a very nice chunk of these moves. Until I found a way to successfully capture this portion of the trading day, I would never be satisfied. By the end of the trading day, after my typical 7-9 hours of tinkering, I was (again) frustrated and fed up. Literally head in hands, unable to crack any sort of code through hours of backtesting. Then, I had a sudden thought to remove extended hours on the charts. I'd noticed previously how much cleaner an SMA moved after removing extended hours, when refining my swing strategy a month or so ago; but never anticipated that it could be useful for intra-day trading. AFTER ALL, what you're toooold is, "premarket and after hours are CRUCIAL"... "you MUST see and analyze them every day!!!"... To my surprise, after disabling extended hours on the 5-minute two-week chart, the SMA linked up like BUTTER.... It was like God speaking to me. I couldn't believe how smooth the cracks and crosses became. Like a DREAM. I didn't even stop to process further. Wide-eyed, I jumped into action; refining the SMA for the least shakeout potential but maximum profit-taking. I could've sworn that I'd wake up from this dream any minute. I didn't know why removing extended hours made the chart so easy, I didn't know if it was a large cap thing or a market environment thing or what... What seemed apparent, was that I could simply enter on cracks and crosses, riding the overall move (even overnight); waiting to take profits on the reversal. After all, the moves were so CLEAR. Why would I want to settle for day trades, only to reenter the next day for continuation? I'd still have to deal with skipping the volatile (albeit profitable) first 15-30 minutes. Why miss out on that, only to struggle finding safe reentry mid-route each morning? That actually introduces MORE risk, with my average inside of the morning shakeout zone. I wanted to get in and STAY in until the proper crack/cross exit was triggered. YES, it made perfect sense to enter and hold even overnight on full-size..... One problem... While it's true that these large caps typically don't move much after hours and while swinging (even full equity) overnight would pose an ultra-low risk; I STILL didn't think it to be a great idea for safety..... As a solution, I've decided to simply split my equity over nine solid charts that I would otherwise day trade. I'll enter on SMA cracks/crosses for each, with the intention to swing if necessary. Through back-testing, it seems that each position will typically hold between 1-2 days before it's time to exit; but if I simply stick to solid (slow-moving, clean yet volatile, large-cap) charts that are day trade worthy, I should still be able to gather a CUMULATIVE average daily profit of $500-1000 (across all nine positions). So in essence, I'd be a Short Term 1 to 2-Day Swing Trader. I'll still be able to make the same profits (actually a lot MORE, since I won't have to skip chunks of the move at market open) but with MUCH lower risk; with my equity spread over nine stocks. I'd like to make it twelve stocks, but I'll test the strategy with just nine for now. This is the first I've truly felt the strategy is complete.

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