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this is the first pass subject to comments to make it successful.


Simon Sez II. "Wait-one bar" rule signal **

Re: Barchart.com


When an ARC aka Smiley Face appears, do the following:

1 ) For the TOP ARC, we wait and wait until the next day when the price drops below the high signal to SELL the stock.

2 ) For the BOTTOM ARC, we wait and wait until the next day when the price bar is rising upwards to BUY the stock.

eg....https://www.barchart.com/etfs-funds/quotes/QQQ/interactive-c... a BUY signal has occurred on 10/04/19. We are now waiting for the next SELL signal.

For the very first time when viewing a chart, the default will go to Frequency: Daily 6 months. You can change the months to 2M or 1M or any time periods that will make you comfortable when viewing the Chart.

3 ) How to add the Stochastic RSI to the bottom: click on the study tab just above the chart and scroll down to Stochastic RSI and then click the apply tab. The RSI act as our confirmation tool. Look to the right side of the Over Sold (pink area)crossover to buy the stock.

** "Wait-one bar" rule signal is when the ARC appears, we wait for the next bar to the right to either rise or go down indicating a BUY or a SELL signal.
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Quill,

Your basic idea is sound. The low of any look-back period has to be followed by a trend 'up'. The high of any look-back period has to be followed by a trend 'down'. That's simply definitional. But here's where some trading problems arise. Not every significant turning point in a chart is a high or low for that period, though the opposite is true, by a trick of logic. Every high or low is a significant turning point. Thus, this question has to be asked, "Which pieces of the chart are you content to trade?"

Let me use an analogy from small creek, reasonably steep gradient, free-stone waters fishing. As you and a partner wade upstream throwing bugs and come onto a decent pool, which part of it do you cast to first? The tailwater? or just behind the mid-pool boulder? just ahead of it? or to either side of the lanes feeding the pool?

If you're fishing with a good partner, like my son, then you're taking turns as you come onto fresh water. You call out what you're going to do, make your cast, raise a fish or not, and step aside. If you're fishing the pool methodically, you fish it from tail to head, even though the "money water shot" is ahead of the boulder. That's where the 'king of the pool' will be. But decent fish can be picked up in the tail water, from behind the boulder, and from the feeding lanes at the top of the pool.

So, again, which pieces of the chart --which of the likely several trends to be seen-- are you trying to capture with you 'Smiley Face/Frowny Face' method? Obviously, you're going for the single "money water shot" that each look-back will present. I want to trade every trend in the chart. Hence, our methods are somewhat at cross purposes. The presence of those two arcs is absolutely crucial to your method. For me, they're helpful, but not essential, because I'm also using the signals provided by 'Volume', by 'Candle Pattern Analysis', and by 'StochRSI'. Your method is far more "newbie friendly" than mine. So stick with it and make it happen.

Arindam
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"For the very first time when viewing a chart, the default will go to Frequency: Daily 6 months. You can change the months to 2M or 1M or any time periods that will make you comfortable when viewing the Chart."

Quill,

I'd agree that "comfort" with one's tools is important. But I'd also suggest that a 1-month look-back is too short and that using it will cause a lot of grief.

As an example of this, plot a chart for DBB (if the link doesn't work). Today's bar is being flagged as a low. If you're short --for having acted on the doubly-confirmed reversal signal of 11/05--, then you would be concerned. You've just been told you might need to cover, never mind that StochRSI says you've still safe. But if a 2-month chart is plotted, support/resistance lines can be drawn that reinforce the idea that you should stay with the position, and they provide an idea of where to set your stop and what your profit target might be.

As with everything, nothing is going to work in all situations. (As the Zen proverb goes, " A way of seeing is also a way of not seeing.") But I think one's default look-back should be 2 months, not something shorter (or longer). Experienced traders can --and will-- tweak your rule set in ways beyond your imagining. But newbies need to be told right upfront:

"You don't know what you're doing, which is why you haven't developed a trading system on your own and why you're losing money. Trade my system exactly as I'm telling you to trade it, or else go back doing whatever stupid, losing thing you were doing --such as buying TMF's "recommendations"-- before you began to ask if there weren't a better way. Mine isn't the only way. But it's a tested system. So, don't screw with it. Just follow the rules."

Arindam


https://www.barchart.com/etfs-funds/quotes/DBB/interactive-c...

https://www.barchart.com/etfs-funds/quotes/DBB/interactive-c...
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Arindam,

Today's announcement that phase one trading deal with China failed to materialize and won't be scheduled until next year.

I had to sell / buy my tetter totter stocks with very nice profits. For some strange reason, I kept FXP
and waiting for a sell signal per the rules.

https://www.barchart.com/my/dashboard - sell SPXL per the rules.

https://www.barchart.com/etfs-funds/quotes/SPXS/interactive-... - bought SPXS per the rules.

on a separate note sold BHC 2 days late. https://www.barchart.com/stocks/quotes/BHC/interactive-chart... per the rules.

as the chart pops up, my eyes immediately go looking for the "little arc's"

For about two (2) months at night, I have been looking hundreds of charts in looking to which is better 1 month or 2 months. The 2 months gives one breathing room and to look for the next stock to purchase.

Quill -
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Quill,

I was about to congratulate you on the crispness of your exit from BHC two day ago, right on schedule as the rules said to do it when I re-read your post. 11/15 got flagged as the high. The next day, prices didn't close lower by much, but they did close down, confirming that the prior day was the high. Worse, the candle was a 'doji' --indicating buyer-seller indecisiveness-- and 'volume' had backed off. In short, there wasn't just one piece of evidence, but three, that it was time to get out. You need to kick your butt around the block a time or two for not following your own rules. But the market did that for you by taking back some of the profits you could have salvaged if you had just followed your own rules. ROTFL

Your China trade, OTOH, is a whole 'nother matter. The rules said you should have been exiting today, but the 'fundamentals' overrode the 'technicals'. Kudos on that judgment call.

Speaking of screw-ups, I'll confess one. I've been so busy writing, that I hadn't been tracking what's happening with corn, on which I was long. But yesterday, when I finally committed to making our rule set work, I had to admit that the position was out of synch with the rules and promptly took it flat. Fortunately, I exited at the high for the day and saved myself losing the $0.14/share I would have if I had hung around hoping that the fundamentals of the grain situation would bail me out. So, kudos to me for acting, but a kick in the butt for needing to fix a problem that shouldn't have happened.

Arindam
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Arindam,

The good thing about these exercises is that we are learning from our miscalculations. Understand what to do the next time.

The BHC came from a pool of about 40 more stocks. I was more concerned with the Tetter Totter group.

https://www.barchart.com/stocks/quotes/BHC/interactive-chart...

Quill -
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Is there a FAQ or post that spells out all of the trading rules in a simple cookbook-style format? I have a hard time following along with the post.
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"The good thing about these exercises is that we are learning from our miscalculations. Understand what to do the next time."

Quill,

Totally agree. Fight the big fires first. Deal with smaller ones later. I've done the same, many a time.

The reason I did the walk through of the chart for BHC is that it's a convincing example that the rules can be/ should be trusted. And Kudos to you again for getting this project started. I was skeptical at first that BC's marking of highs and lows was tradable. But it really is, and across all time-frames. I'm focusing right now on the EOD stuff. But I've seen it work with 2-hour lookbacks and 2-minute bars.

A
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James,

Quill would say 'yes' (that there's a post that explains it all). I'd say 'no' (as of yet). But getting one written is our common goal. Meanwhile, do this. Set up a free account at BarChart and start learning to draw charts. Walk yourself through every variation of price bars they offer. Explore every indicator they offer. Get used to annotating charts. Learn how to create watchlists.

Most brokers offer paper-trading, which has one upside and a huge downside. The downside is that recklessness is encouraged, and mistakes aren't penalized the way they'd be if the trade were done with real money. The upside is that learning how to write orders --so that positions can be put on and taken off-- takes practice, and the practicing can be done for free.

What you'll also need to realize that both me and Quill are retired and don't have much of a life apart from markets. We live and breathe this stuff 24/7, which is horrible thing wish on anyone else. So, I'd urge 'balance' and 'patience'. The learning will be a long campaign, but engaging and worthwhile.

As for books you might read, you really don't want to go there. I've got on my shelves nearly every one every published, but none of them will teach as much, as fast, as doing single-share trades, one after another, and then doing a very through postmortum on what went right and what went wrong. The usual form that postmortem is supposed to take is a 'trading journal'. But I think doing posts in these forums is easier and faster. Plus, there's the possibility of getting some feedback.

Arindam
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Quill,

If the TOP ARC the next day the bar is higher we will stay in the position or get out? I like the new Simon Sez II!

Dean
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Dean,

Rule one applies. https://www.barchart.com/etfs-funds/quotes/SPXL/interactive-... we stay in the position until the SELL signal appears per rule #1. It is the waiting with patience and discipline that traders are concerned about.

I own several thousand shares of SPXL because it is part of my Tetter Totter group. https://www.barchart.com/etfs-funds/quotes/SPXS/interactive-... is the inverse. The Tetter Totters win no matter what the market does either going up or going down. https://www.barchart.com/etfs-funds/quotes/SPXL/interactive-... for the past 10 years. Formally BGU pre 2006.

Quillnpenn -
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Quill, wouldn't Christian Pratsch "A Reliable Set of Technical Indicators" Technical Analysis of Stocks and Commodities April 2019 StocSlow 12,1,3 paraSAR 0.07, 0.20 , SMA 8
work well in your system?

Why not remove the StocS, the paraSAR, and the SMA 9 and rely on BarChart's Chart HighLow indicator only?

The cleaner the chart the less confusion there is.
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sherall,

How each 'trader' (or 'investor') sets up charts is an individual matter. But the irony is this. Though there is no single "right way" to do it, there are plenty of wrong ways, and some traders use no charts at all, but trade of off T&S alone.
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"I own several thousand shares of SPXL "
When comes time to sell and buy SPXS, do you sell all these as one order or dribble them out in lots of a few hundred shares for a complete position sell?
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