Author Topic: S&P500  (Read 1677 times)

eddieb

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Re: S&P500
« Reply #75 on: February 10, 2020, 07:50:32 AM »
No doubt that coronovirus is going to hit economies bad. Reading about tourism issues only, Cathay Pacific have asked 27, 000 staff to take 3 weeks unpaid leave and major tour operators are expecting mass cancellations as travellers from the Far East cannot leave and travellers to there are unwilling to go.
Just looking at China alone,  their 159 million tourists represent 12% of all global travellers and spent a huge 211 billion last year.
Japan expect financial impact on the coming Olympics could reach 17 billion

Emerson

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Re: S&P500
« Reply #76 on: February 10, 2020, 11:08:58 AM »
I am still trading S&P off the short term chart (1H/4H). This is a primarily bullish commodity, and we can now "look forward" to yet another 4 years of the same "Trumpism". But it is by no means a one-way street from a trading point of view even though actual cash investment long term holds are making great progress.

Last week was a typical bullish move when we were following the impeachment trial (even though the outcome was never in doubt right from the start), but as soon as that was over we are back on the negative coronavirus issue (all so-called "flavour of the day" stuff!).

So one can conclude that there is money to be made from the short term moves at present. Using a simple MA method there have been three moves since end Jan: 2 sells and 1 buy. The latest sell was on Friday into the weekend (which was admittedly a scary position to take!) is shown in the attached chart. I would normally have set a target at 200 points but because I was rather late into the move I only looked for a remaining 125 points. Target was hit early this morning (bounced right off that 200EMA!) and we have now rallied back up beyond the original sell level since then - this, to me, is short term trading. Spotting signals early and looking for a set (typical) pips move combined with a sensible pre-set stop level ( in this case 1:1).

Now I am just waiting for the next signal......

« Last Edit: February 10, 2020, 11:11:06 AM by Emerson »

Emerson

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Re: S&P500
« Reply #77 on: February 10, 2020, 09:09:11 PM »
 
Now I am just waiting for the next signal......

And so the next signal, a buy, came this afternoon and I was late in again! But I set a lower target at 100 points to compensate and we reached that with little effort. Could have had more but I am a bit over-cautious nowadays and worry about sudden price collapses!!!

But two trades, one short and one long, closed on the same day. I'm ok with that. Slow but steady. I have no idea where the longer term is going anymore!   ???

Caesar

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Re: S&P500
« Reply #78 on: February 10, 2020, 09:56:11 PM »
Emerson, are you finding that you are spending less time in trades than usual and, if so, is that a conscious decision beforehand or do you feel price action is forcing your hand?

Emerson

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Re: S&P500
« Reply #79 on: February 11, 2020, 12:13:52 PM »
Emerson, are you finding that you are spending less time in trades than usual and, if so, is that a conscious decision beforehand or do you feel price action is forcing your hand?

That is a good question! It raises many issues! :)

I always try to form a general idea of what the long term characteristic is from the weekly/daily/ chart and that determines the nature of my actual trades in the shorter TFs. For example, the SP500 was clearly in a steady upward move during last year, which was clearly visible on both the weekly and daily chart, and so my trading was almost entirely from the long side and buying into dips. Any short positions were smaller in size and with a tighter target level.  Currency pair also show trends better on the weekly/daily charts.

However, we are usually talking about  CFD-type trading and not passive cash investments and that is the problem, I think, for most traders, and especially beginners. It is easy to look at a weekly chart and say, hey that's easy to trade. But a closer inspection shows that in practice a weekly trend can often include pullback periods of even up to 2000 pips and sometimes drop back to breakeven after a couple of months and still be in a trend long term that eventually earns good money. But this is far from a forex trader's normal environment and trading perspective of a few days/hours, even minutes! And is usually beyond the scope of the typical Newbie's capital resources to hold through such pull-backs!

Also, a long term pullback on a weekly scale is, in itself, a trading opportunity. And that is how I normally try to trade. I first interpret the big picture and then trade "bite-sized" chunks within that picture.

That's the way I see it, anyway! But, as always, it's just a personal view! :)

So, coming to your question, yes, I have noticeably shortened the length of those "bites" in recent months and my normal trade duration has shortened accordingly. For example, I think there is a good chance that SP500 is consolidating here (global growth contraction issues, also reflecting in low oil prices) and I expect a broad trading range for a while and so my current "bite size" with SP500 is about 100-200 points and is usually completed within a range of 5-25 trading hours from entry. In fact, if it is still open after 6-8 hours I seriously consider closing out. So, yes, my trading characteristics have changed in recent months.

This question also touches on another issue that is, I think, common amongst beginner traders. I.e. can/should one aim to trade full-time rather than alongside a job. This is a big issue with many components, but here we could point to the issue of how to maintain a necessary minimum income level as a full-time trader when markets become unsettled and erratic?

A capital-builder can easily adjust their exposure according to the market and be content with whatever the market currently offers. But an income-earner has commitments and needs to achieve a certain basic income whatever condition the markets are in. The former takes what the market offers, the latter dictates how much has to be gained from the markets, whatever they are like.

 
« Last Edit: February 11, 2020, 12:17:58 PM by Emerson »

Emerson

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Re: S&P500
« Reply #80 on: February 11, 2020, 09:33:32 PM »
No signals generated on the short term charts today in either direction.
An early push upwards fizzled out and we dropped back over the last few hours. We are now homing in on the close towards last week's high at 3358.

The daily candle looks a little negative, closing nearer to the day's low, and we could see lower levels tomorrow although the overall longer term chart bias remains upwards.

An uncertain market currently affected by factors only indirectly related to the global economic condition, such as Novid-19 and the US primaries.

I predict there will be a trade signal tomorrow..... :)

Emerson

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Re: S&P500
« Reply #81 on: February 12, 2020, 11:31:22 AM »
I predict there will be a trade signal tomorrow.....

...and it came.....but (too) early in the morning when I was still in the neverneverland. But I bought into it later. However....

I put a 150 point target from the signal entry and it has so far reached around 100 points. But it is very slow and I got cold feet and decided to quit my own position with only 20 points (due to the late entry). 

So I am waiting to see now  a) whether the signal will reach its target, and b) when the next signal arrives, possibly on the downside.
« Last Edit: February 12, 2020, 11:35:39 AM by Emerson »

eddieb

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Re: S&P500
« Reply #82 on: February 12, 2020, 01:37:22 PM »
Interesting to see how other traders are adapting to the current environment.
I think failure to adapt has been one of the reasons behind my recent struggles. I have been taking riskier/less clear trades than before rather than wait for a stronger signal or considering  other strategies.
Something to ponder on  :-\

Emerson

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Re: S&P500
« Reply #83 on: February 12, 2020, 07:29:19 PM »
I have been taking riskier/less clear trades than before rather than wait for a stronger signal or considering  other strategies.
Something to ponder on 
Yes, I fully agree that there are times when price movement characteristics change and creates a need to reconsider one's approach.

To be honest, I don't really change my strategy, I just adjust my target expectations. I journal every signal that occurs, whether I take it or not, and its theoretical max gain/pullback before the next signal. This gives me a picture of what is happening and any overall changes that might be taking place. For example, if I am getting a lot of signals in both directions and the bigger picture is quite flat then I usually only look for a modest target per signal around the average number of pips gained per signal. But when the signals tend to be fewer and mainly in the same direction as the bigger picture (which will normally be trending) then I might leave it with a trailing stop and see how far it want s to go. SP500 has been like that at times last year.

But today's signal was typical of the struggles and uncertainties in recent times. It was a buy signal and the market has moved upwards, but very slowly and often threatening to reverse. I decided to close out early but the market did continue up. However, if you look at the chart below you will see that it peaked several times at the same level (in the red oval), which happened to be around 145 points profit with a target at 150!!!!!!! What does one do in situations like that? Let it run and risk a sudden collapse, or just take the profit when it is just short of hitting target! Easy to say in hindsight but at the time it just builds uncertainty and confidence in one's settings!

The only thing that keeps me  buoyant about the upside with SP500 is the almost certainty that Mr Trump will win another four years and that he and his very wealthy buddies are going to do all they can to keep the market strong during this year's campaigning since the strong economy is one of Mr Trump's most solid arguments!!

I am also still very positive about the GBP long-term and rather negative about the EUR long-term but there is room for a lot of movement in both directions in both currencies, so I am not looking at any positioning in my trading there either!

I am normally one of the last people to say take quick profits, but I confess I am guilty of that myself nowadays! I wouldn't want to be a full-time trader at the moment!

Emerson

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Re: S&P500
« Reply #84 on: February 13, 2020, 07:01:14 AM »
Yesterday's target was finally hit at +150 points after several hours of teasingly holding around 5-10 points below it (see chart below). But I didn't have an actual position open then as I had already closed out earlier for only +20 points due to four reasons: 1) a late entry into the trade, 2) slow price action suggesting there was little momentum behind this move, and 3) this was the second consecutive long trade and that is always more risky with short term chart trading, 4) it has been a slow start to the month for me with only 4 winning trades here (out of 5) and my money management rules relate risk exposure to profit gain. In other words, whilst profits are low, risk is kept low to ensure a profit on the month.

But the "system" trade worked again. And it is interesting to see that within a few hours of hitting target the market did actually reverse and is back at the entry level of that trade. This is for me the key to the current markets. It would have been easy to take a long trade and move the stop to breakeven, hoping for more. But so often at present there is little follow-through and a promising profit is liquidated at B/E or worse.

We are close to a potential sell signal here but it has not yet materialised. And because the bigger picture is still positive then I am more cautious before actually taking a short position. Give it a few more hours maybe.

My intention here is really just to talk the technical picture but in this case it seems the sell-off was caused by exceptional jump in Covid-19 cases in China. But this was mainly due to a change in diagnosis criteria which included more cases than the previous method. Over half of yesterday's new cases were due to this broader criteria of influenza symptons+lung infection.

If that is the case, then this little sell-off may be short-lived!

Caesar

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Re: S&P500
« Reply #85 on: February 13, 2020, 08:16:45 AM »
Great post,  Emerson,  and a terrific explanation of the rationale behind your trade.
100% with you on closing out when you did, I would probably have done the same myself.
With a Covid-19 vaccine 3 or more months away financial markets are going to remain jittery, especially when there is a spike in new cases. As company results begin showing impacts on the supply chain and consumer purchasing we could be in for a bumpy ride.

Emerson

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Re: S&P500
« Reply #86 on: February 13, 2020, 07:19:39 PM »
Great post,  Emerson,  and a terrific explanation of the rationale behind your trade.
100% with you on closing out when you did, I would probably have done the same myself.
Thank you, Ceasar, I appreciate the comments! :)

Today was an interesting day! Firstly, I was reluctant to enter when the sell signal came because the big picture is still a strong uptrend, and waited too long - and then made the classic mistake of chasing the market!  :D

Fortunately, due to my distrust of selling this market I only sold a half size position. But lost -142 points on it after it almost immediately reversed. If I had entered on the signal when it first appeared it would have earned a full +150 points.

But then we very soon had a buy signal and, on the often correct assumption that: "what won't go down is going to go up" I bought a double-sized position and it was a fairly clear ride up to the +150 point target.

So recovered the stoploss and a good profit on top for the day. Again, risk management is so important in trading, and it minimized the loss and maximised the gain - but chasing the market, especially on the downside was asking for trouble and I should really have known better because when I eventually entered, the price had already dropped for most of what the signal trade would have been looking for.   :-[

So, a few old, gold lessons revisited and relearned today! but still a win on the day!  ;D


Emerson

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Re: S&P500
« Reply #87 on: February 14, 2020, 07:27:15 PM »
After what seemed like turning out to be a quiet Friday we got a sell signal about an hour ago. I hate this early morning/late evening starts - especiually on a Friday!

So far we are just over 50 points in the green and I think I am going to move SL to B/E already now, even though it can easily whip back up to that (and probably will). If it gets stopped? Well never mind, nothing lost - and I am not going to keep this one open over the weekend like last weekend, even if that one did work out fine!

So we have about 90 mins to go in which to see if this really does want to sell off towards the close today.....

Emerson

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Re: S&P500
« Reply #88 on: February 14, 2020, 08:08:49 PM »
As anticipated, this does not seem to be going anywhere on this Friday night so I have scratched the trade for a few points plus.

That's it for this week. Its been average, but consistent...and we are better off than last Friday, and that is mainly what counts! :)

If anyone is passing by here, then have a great weekend. :)


Emerson

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Re: S&P500
« Reply #89 on: February 17, 2020, 08:28:51 AM »
After scratching last Friday's short around B/E, the price did in fact raise further into the last hour of Friday trading and I bought it then. I was not going to leave a short open over the weekend because it was against the big picture, but a long position is another matter. Finishing strongly on a Friday in the direction of the main trend is usually relatively safe. Naturally, it is usually possible to open the position early Monday morning somewhere close to Friday's close (and avoid the weekend open exposure risk), but I like my sleep too much to get up that early..

So far, we have just exceeded the +100 point profit level and I have now moved my S/L to B/E. Now we will end up with either +150 points or about +5 points.

This chart has a more complex inclusion of the big picture - probably far too cluttered and colourful for many of today's young traders who are attracted to concepts of "naked charts" and "price action". Personally, I find no value, only distraction, in watching the price itself wriggling its way up and down in response to the erratic flow of orders from the vast mass of traders ranging from minute scalpers to long term investment hedge funds - and everything in between! My own preference is to seek a set of lines that identify the core line of direction (if any!) underlying, or embedded within, all that price "noise" - and in spite of the current price, rather than because of it! But that's just me ( and I just like "pretty" charts, anyway!)  ;)

« Last Edit: February 17, 2020, 08:42:42 AM by Emerson »