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Gareth G.


Just a quick bio, as I see others giving a short blurb here…

I am from Kingston, Ontario, between Toronto and Montreal basically. I graduated from a Bachelor of Business Administration from Laurentian University about 2 weeks ago, and a few years before that I received an advanced diploma in Business Admin, with a major in Marketing.  I am now entering into an MBA in Community Economic Development with a specialization in Strategic Leadership from Cape Breton University. What a mouthful! Classes start the last week of January.

I am self-taught, short term trader. I have been investing for 7 or 8 years, and day-trading as time permits for the past 3 or 4 years. I manage a few family members long-term retirement accounts and a discretionary portfolio of my own money, along with that of a few close friends. I am small potatoes though, don’t get me wrong.

I am infrequently around during trading hours to participate, as I also work in the insurance industry. I am here for the experience, and to contribute where possible. I prefer to focus on Macro issues to get sentiment, and hone in on a set of indicators and levels for actually executing trades. All in all I love the markets, and can’t get enough of it! Thats all for now, so….

-Happy Trading

Ron Popeil meets the Steve Miller Band

I’ve done it; I’ve found the secret formula to untold profits! This is a set-it-and-forget it, Ron Popeil style strategy.

Okay, probably not; but this set-up is worth looking at. I’ve been in talks with some people to exhaustively backtest this as an automated trade strategy, but in the meantime if it can make 1 person a couple bucks I figure it is worth sharing. So, I decided to share this with, well, whoever wants to read this.

First of all, let’s be clear: this is a swing trade strategy, and works well if you don’t watch the tape all day long. Here’s how I set up my charts: It may seem simple, but there is a reason; IT IS!

So, here it is: I use 3 EMA’s: The 4-period the 8-period and the 21-period.

My Entry signal is identified when a candle opens below all 3 EMAs and closes above all three. This is my signal, but the entry is flexible. Sometimes the following day provides a better price to enter, but in order to automate this trade you could execute the buy at 3:59 on the day of the trigger.

To Exit this trade, you can be flexible, but as a rule, you sell on the first close below the 8 period EMA. Worst case, if by some chance the trade goes against you the day after you enter the trade, you set your stop loss to close out the position at the candle low of the trade-entry day. Make sense?  I think if you are reading this, you probably get the idea….

Now yes, I know, if you look at a lot of these charts, you will see that I would be leaving money on the table based on the exit criteria. If you prefer to be a hog, wait for a close below the 21 period EMA. Just be mindful that for every time you are a pig, you could be on to the next trade two or three times already. In the word of the great Steve Miller band, ‘Take the money and run’.

Here are some recent examples, all using Daily timeframe charts:

Ticker Identified Entry Date Identified entry (Close of day) Identified Close (Close of Day) Theoretical Gain
LVS Aug 20.2010 ~25.00 ~26.77 7%
AMR Oct 12 2010 ~6.40 ~7.70 20%
TQNT Sept 13 2010 ~7.40 ~9.10 23%
PG Oct 5th 2010 ~60.30 ~63 4.5%
RIMM Oct 20 2010 ~49 ~55 12.2%
AIG Sept 24 2010 ~36.5 ~41.5 13.7

All prices are ~approximate, but you should probably get the picture.

Am I a broker? Nope. Certified in any way shape or form? Nope. Am I guaranteeing anything? The markets will open at 9:30 am, I’m pretty sure of that. Where your money ends up is entirely your decision.

As Always, Happy Trading!

Light at the end of the tunnel

Heading into this week, many people sat on the sidelines and literally waited for all of the Macro nonsense to play out. If you didn’t, and live to trade another day; well done.  Today’s Fed announcement either made you more confident about getting back into the daily grind of trading, or had you chopped so many times that panic was close to setting in.

My key take away from today’s action was that event risk is just too powerful to be heavy in this market. While I’m sure some people remained confident (because Helicopter Ben is hell bent on equity prices increasing) and they made out okay.

Realistically though, the market only closed up marginally. For me, the end of the week will be the tell of the market. Can the U.S. indefinately devalue the dollar? Will commodity prices perpetually continue to rise? If so, I have a tech start-up with no earnings to speak of to sell you….. sense the sarcasm? What about a reference to a bubble? Ok, moving on…

In any event, many people saw the light at the end of the tunnel today. The important issue: was it because of more certainty in the Macro environment, or was it the freight train of pain catching you on the wrong side of QE2? Your P&L will tell the real answer.

-Best of Luck for Thursday!