Exit the crowd and weekly trading mode

You can use the strategies used by top market participants to profit from stocks, futures and foreign exchange without staring at the trading screen. Start with a huge regression and focus your attention on weekly patterns, which are more reliable than daily or intraday price movements. Then, establish management rules to let you sleep at night while the fast-fingered crowd tossing and turning, focusing on the next opening clock.

Algorithms, also known as high-frequency trading (HFT) robots, have added considerable risks to intraday trading in recent years, interfering with the rise and fall of prices to find trading volume clusters, stop losses and inflection points. Human traders will Point to make the wrong decision. Focusing on the weekly chart can avoid this predatory behavior by aligning entry, exit, and stop losses with the edges of long-term uptrends, downtrends, support and resistance.

Big picture method

This macro approach greatly reduces the noise level, allowing weekly traders to see opportunities that short-term traders miss when flipping through the daily chart at night. It is true that these trading settings require patience and self-discipline, because weekly price bars may take several months to reach an operational trigger point.

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However, the higher return potential compensates for this lower activity level, and the total work effort allows traders to live a real life away from the financial markets.

Use weekly chart

The weekly chart uses specific risk management rules to avoid falling into huge losses:

  1. Reduce the size of the position to avoid excessive use of margin. When you move the price many points before making a profit or loss, a few hundred shares will complete the work of a thousand shares or more.
  2. Be selective in job selection. As a general rule, high-capitalization stocks and the most popular exchange-traded funds (ETFs) generate better weekly transactions than small-cap stocks or Goofy Biotech, which may fall by 30% after an adverse decision by the FDA To 50%.
  3. Focus on the edges of long-term ranges and moving averages. Starting weekly trading in the middle of the 15 or 20-point sideways mode is a sure way to lose money, and buying a pullback to the 50-week moving average can produce excellent results.
  4. Respect the power of opportunity cost. The funds you reserve for weekly transactions that last several months cannot be used for higher reward settings that magically appear when you manage another position.
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Feel free to add basic techniques to your weekly technical trading standards. For example, when buying stocks that are close to weekly support levels after a sell-off, solid earnings growth will increase your confidence. In addition, dollar cost averaging can be actively used to increase positions when approaching and testing these action levels. However, if support is interrupted, don’t be fooled by the company’s balance sheet, because you need to actively respond to losses.

A historical example

Let’s look at a past example, using the four weekly trading settings established by Powershares QQQ Trust (NASDAQ: QQQ) in the 14 months of 2013 and 2014.


The fund entered the weekly trading range in November 2013, and the support level was around 85. It was sold after rising above 90 in early 2014, and returned to long-term range support in April. Weekly traders can establish low-risk positions at this level (1) before the 7-week rebound increases by more than 7 points. In addition, when it rises above the January resistance level (2), a second buy signal appears, which is conducive to new entry or the continuation of the first position, which currently has made considerable profits.

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The sharp decline in October set the third weekly trading entry point, which was created by the breakout in June when it fell to support above 91 (3). This level also fits perfectly with the support of the 50-week moving average, significantly increasing the likelihood of a bullish outcome. The fund left the support zone vertically, testing the annual highs and breaking through at the end of the year. The final buy signal was issued in November (4) when it broke the triple digits.

The pullback to the weekly support level (red circle) in April and October raises an important issue in weekly trade execution. Both declines broke through support levels in the middle of the week and rebounded, and Friday’s closing price was above these controversial levels.

Although the position should be as close as possible to the weekly support level, stop losses and other unprofitable exits need to avoid intraday volatility, which means that the exit decision should be postponed to the weekend or until the support level is broken by a few percentage points.

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