What’s changed in trading in 15 months?

Not much.

It’s been 15 months since my last post.  During this time I’ve become a 9-5er in IT, and have barely caught a glimpse of any market action since last March.

I’ve had a chance these last few days to re-kindle my old passion.  It started by checking some charts and some older sites, before I hit Google.

The biggest surprise to me is that barely anything has changed in the trading scene in nearly a year and a half.

The same vendors are selling the same software.

The same brokers are selling the same commission rates.

The same ‘gurus’ are selling the same trading systems.

The same analysts are posting the same drivel on the same sites.

Trading still seems like a daunting and secret world, inaccessible to your average Joe.

I thought there would be something new by now, given all the changes in web technology and the way content and ideas are being shared.

All the indicators and trading systems are MIA from thinkorswim, so I’ll be starting with a clean slate on that front.

I won’t be able to commit a lot of time to trading or analysis due to work, but the goal is to get my toes wet by the end of the year.

Lastly, here’s some entertainment for you.  I stumbled across this video on youtube while looking at some Market Profile stuff.  Delighted to have found someone who can read the future.

I really don’t know where to start with this guy..  I’m ashamed for mankind.

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TSLR Weekender

Market had another pullback this week as the Dow continues to move away from an area of strong resistance at 16500.  Nasdaq and Russell are holding a little better.

There is a distinct lack of quality charts at the moment, which usually signals a good time to sit out from the market until it either pushes higher or begins to follow through on the technical reversal.

This weekend I want to outline a few offering downside hedges.  I’m not saying the market is going to roll, but a few of the hedge plays are looking good technically.

GM reversal formation, lots of these about just now

GM reversal formation, lots of these about just now

GDX continues to move as expected VXX for VIX volatility TZA wedge action Nice and tight post-reversal consolidation

 

Profit Hunting

Quick technical post on two charts catching my eye just now.  I’m on a different computer than usual so forgive me for the lack of notation on the images.

AMBC ripping

AMBC rapid expansion phase

AMBC isn’t a ticker I normally keep an eye on but it popped up on my expansion scan today.  Great inverse head and shoulders and a strong base breakout.  It’ll be interesting to see if this consolidates on lower volume within a narrow price band next week.  This will provide a good momentum-based technical setup, however I don’t like how extended this is from nearest support from a risk management perspective (30% away).

PVH flag

Post reversal consolidation

PVH is another stock I’m not familiar with, but it too popped up on a scan today.  I don’t often sit and watch the markets live at the moment, so when something does pop up I usually have a good look at it.

This has a good expansion phase, but what I’m more interested in is the classic 3-day consolidation phase on light volume after expansion.  Prior to the advance from 115-125, it formed a nice double bottom reversal formation at a previous gap area.  After moving sideways for some time, a reversal and continuation formation could serve as a good catalyst moving forward.

Despite the small profit potential on a $10 measured move, this setup has low downside risk at $124, offering a risk/reward of 5:1 at todays price.  A second buy opportunity lies at the $115 area, which could also yield a short-side trade on a breakdown.

Two decent charts to keep an eye on.

Once a Trader, Always a Trader.

It’s been a good six months since I last wrote about trading.  There have been quite a few life changes over that period.  As a result, I haven’t been watching the markets or actively trading them.

However, this past fortnight provided two trading references which provided me with a happy reminder about trading:

To the commuter, this is strictly a bus timetable

To the commuter, this is strictly a bus timetable

To project managers or students, this is how you work out Critical Path

To project managers or students, this is how you work out Critical Path

To the uninformed majority, these two images are taken strictly at face value.  One is a bus timetable, the other a snippet of university work relating to the Critical Path Method in project management.

They are pretty much axiomatic – unless of course you’ve spent the last five years of your life engrossed with financial markets.

When I stood at the bus stop and when I worked out the critical path for a college assignment, I didn’t see a timetable or the path, I saw this:

Market Profile chart

Market Profile chart

Market profile.

Once you’ve traded, you look at things with a different perspective than most people.

Once a trader, always a trader.

5th

5thFIVE YEARS AGO

I knew the site’s birthday was sometime this month, but I didn’t realise I reached the five year landmark on Saturday.

I’m surprised the site is still going and that I’m still interested by trading after all this time.  Looking back on all these posts last night was an interesting journey.  All the phases I’ve been through, different perspectives on things, encounters with new methods etc – posting my trading story has been immensely helpful and I highly recommend it to any aspiring traders.

There were a few downsides though.  Reading some of the articles I wrote years ago has made me realize I’ve forgotten a lot of what I’ve learned.  I’m also a slight disappointed that I’m not a superstar trader after five years.

In terms of technical analysis, I think my boom days were late 2009.  I was more astute with risk management theories in mid 2010.  My grasp of the market internals was stellar in early 2011.

From a personal perspective, it’s been funny to read the stuff that 24 year-old me put up on the Internet.  Some of the earliest posts from 2008 are hysterical and continue to make me cringe with their naivety.

Latterly I was a bit more sentimental.  I have plans to re-launch the site in a different format with a new ‘brand’.  As well as that, I’m developing an educational site.  This means that after half a decade, the end of thestudentloanranger is upon us!

Naturally, I’m going to keep this site live.  I’m also going to download it all locally and I’m considering using blurb or blog2book to make a keepsake book for myself too.

Trading psychologists will tell you there is no room for emotions or nostalgia in trading, but 5 years is a big chunk of my life and I’m human, right?  I am looking forward to the developing the new sites and the content, the time has come to move on.

I’ll still be posting here for maybe another 6-10 weeks while I work on the other projects though, so it’s not over yet! 😀

Profit Hunting

First content post for some time.  The past 8 weeks or so have provided a good trading environment for swing trading.  It was only this past week however where I have added anything new.  I’m long NBR from 17.07 and added hedge positions in both SDS and VXX as I am weighted to the upside.  I am out of AIG and I’m also close to an exit in AA.

Here are some charts I’ll be watching next week.  Doing all of this post with just one hand has taken a long time, so I’m not going to elaborate on the setups because they’re clean and simple! I have included some longer term holds this week.

FNSR long

Long setup on FNSR

ICE pullback long

ICE pullback long

INFI potential long, gut-shot

INFI potential long, gut-shot

PBR longer term buy and hold setup

PBR longer term buy and hold setup

PCYC breakout, watch for continuation setup

PCYC breakout, watch for continuation setup

RTN bear flag setting up to downside

RTN bear flag setting up to downside

S finally getting set to break its base?

S finally getting set to break its base?

Another bear flag in TCK

Another bear flag in TCK

I started writing down ideas for my new site this week, so far I have around 200 articles to write and I haven’t really scratched the surface.  It is no wonder new traders are intimidated by the learning curve and shell out for expensive software, courses or subscriptions from “gurus”.

Back

Over 3 months without writing an article!  I go through a phase every 12 months or so where I don’t feel the need or have the motivation to write and it looks like that’s out of my system.

I haven’t done a lot of active trading this past quarter and I’m still holding a lot of the positions I opened in October (JNJ is a superstar).

I am looking to start writing again soon but there will be some changes.

I have been ‘The Student Loan Ranger’ since March 2008.  I’m approaching 5 years under this alias and I feel I have outgrown it.  The first change will be the end of TSLR and a new domain outwith WordPress.com

Secondly, I’d like to develop a more education focused website aimed at beginner & intermediate traders with regular in-depth articles focusing on technical, psychological and money management skills as well as frequent swing trade setups.

My focus will be on quality, engagement and actionable ideas.

In the meantime I’ll try to post some charts again soon, but there are complications!  Number one, I broke my shoulder sand-boarding a few weeks ago so it’s difficult to use a computer properly.  It also looks like my days of using the thinkorswim platform are over since TD are closing my account (non-US) so I’ll have to find an alternative!

I’ve had a quick look and there is nothing on the market that comes close to what I need that costs less than $500 a month.  Who knows, maybe I’ll design something myself.

Containing Whipsaw Trades in an Automated Trading System

My latest obsession with my trading algorithm is being able to counteract successive losing trades and draw-downs during indecisive whipsaw periods.  I have become transfixed today with linear regression and, somewhat fittingly considering it is Pi day (3.14) – angles.  I am managed to port over the bare bones of the trading system to NinjaTraders C# code and have begun some slightly better back-testing.

Unrelated to my NT activities over the weekend, last night I dug out my copy of Schwager on Futures and started skimming through looking for system ideas.  One of the systems mentioned was remarkably similar to the one I have programmed and he went into detail about how to eliminate these false entries and draw-downs that routinely occur in a trend following or breakout system.

I woke this morning with the goal to phasing in a few of these ideas for testing, as well as finally coding a decent trailing stop.  The stop I seek is basically a target objective trailer, so that if the trade is up by over a point, move a stop to -1 and if up by 2 move a stop to 0.  It’s a simple concept but it really doesn’t seem to work in NT as yet.

Warning: Take your time on this post as it contains some slightly more advanced math concepts which I have tried to simplify in the charts.

Checking past results

Anyway, the first thing I did was load up the ATS and back-test it for last Wednesday’s session – an afternoon which reclaimed all the profits with a 9-trade series of 0.50-2 point losers:

ATS trades on ES Wed Mar 9th 1000 tick chart

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