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The Complete Trade Risk Blog Roll

Publishing market analysis and trade ideas since 2012.

five tips for holding winning trades

Letting a winning trade ride is difficult.

How many times have you had winners evaporate in front of your eyes, stop you out at break-even, or even worse, turn into a loser?

It is no surprise holding onto a winning trade is one of the most difficult skills for a trader to develop. (more…)

why the golden ratio is responsible for halting this rally

$SPY what an incredible week in the markets. I have expanded out the timeframe on all my charts to hourly this week to get a better idea of where we came from and where we are now. The circus in Washington was a key factor in this near 3 week decline and it was equally responsible for the 2 day ripper we witnessed Thursday and into Friday. Combine market sensitive headlines with technically oversold markets and relatively negative sentiment and you have the recipe for a near 3% rip in the S&P500 from Wednesday lows to Friday highs. Price finished Friday right at the 61.8 retracement from the 9/17  highs which also coincides with the market highs from August making roughly SPY 170 a very logical place for the market to find resistance. Hopefully the title of this post is not taken literally however you will notice many stocks this week found price stalling right at their 61.8 retrace from their impulse legs lower. A move of this size and speed has me believing this is more than your average bear squeeze so going forward we need to watch the commitment to this bounce by measuring how much (if any) of these recent gains we give back going into next week. I would consider an orderly retracement that forms a higher low very constructive but on that same note I do not want to price slam down lower next week in bear market panic type fashion.  (more…)

so much noise so little movement

$SPY lots of noise this week but after everything was said and done we ended just about where we closed last Friday at 168.94. We got slammed coming in on Monday after the government shutdown but we quickly bounced higher testing the midpoint of last weeks range before rolling back over a second time. On Thursday we saw a breach of Mondays lows but the bears couldn't keep up with the pressure and we saw another snap back higher begin to take place. We ended the week near the highs and we have a nice double bottom in place that could confirm above 169.50. It is a very tricky environment given all of the macro headlines the market can use to push price around as it pleases and not to mention we are at a key inflection point which is attracting more and more eyes to the indices. More eyes means a pick up in volatility, choppy trading, and typically lots of false breakouts or breakdowns. 167 to 169 is your range here but at this point I tend to think it will not be as straightforward as jumping on board a breakout level and riding away to profits. As I mentioned, the more eyes on a market the more trickery and deception that gets lathered on. I DO tend to lean to a resolve to the upside after all is said and done but for all I know it could be another 2 weeks of churning money within a range before a real direction develops. Oh and lets not forget earnings season right around the corner, October is going to be a wild one. (more…)

price compression & uncertainty

$SPY so last Sunday in my recap, more all time highs or breakout failure I talked about two scenarios that could play out over this past week and what type of price action to be on the lookout for each case. Now that the verdict is in and we closed a second week on the lows (although not incredibly bearish) it still confirms that we are not ready to hit the ground running higher after making new all time highs in the S&P500 last week. So what can we expect next week? Short term we continue lower in a falling wedge making lower highs and lower lows. When price begins to compress in a fashion like this the result could be a breakout in one of two ways. A continuation pattern, accelerating price to the downside or a price reversal breakout to the upside. Now to add some context to this current price action we should realize the intermediate and longer term trends are both up with a gap still open at SPY 166.92. All things considered it is a fairly tricky environment to "predict" and place bets at this point especially when you consider some of the more macro headlines getting thrown around recently. However, short term I find it much tougher to be bullish here without more signs of stock leadership and firming price action so for now I remain neutral with a bearish bias. My advice: do not overtrade and get chopped up while price compresses, keep patient for your A setups or wait for a breakout or breakdown. (more…)

more all time highs or breakout failure?

$SPY this week gave a little something to the bulls and bears in the broad markets by pushing to new all time highs in the S&P500 but unfortunately for the bulls we ended the week giving just about all those gains back and therefore setting up the possibility for a breakout failure going into next week. We also ended the week with our second open bull gap since the reversal started back on August 27th at SPY 162.26. Also let's not forget the SPY went ex-dividend this week so this chart is really skewed by 84 cents which means the fade here looks worse than it really was. All that said. We essentially retraced all of the FOMC gains from wednesday and we are now sitting on some support at the 170ish level coinciding with the open gap and previous August all time highs. I would suspect the bulls try and defend roughly this 169-170 level  however it seems likely there might be some continued profit taking and sell momentum coming in early next week.  The key will be monitoring how much further progress the bears can make. Can they setup and confirm a potential breakout failure closing a second week on the lows? Or will the bulls step up and buy these new all time highs aggressively. Time will tell, I still favor the bull case here especially given how many stocks are at or near all time highs. (more…)

why today was good for future apple bulls and bears

aaplOversold

We saw a strong bounce off the open today in Apple which created a nice double bottom with yesterdays daily candle at 447.  The rubber band finally snapped back after a 60+ point stretch to the downside. (more…)

bears BEWARE of the bullish island reversal

$SPY bulls stepped up to the plate and confirmed last weeks rally by breaking us out and above the previous 167 resistance level and into the gap. But most importantly notice we have a new open gap thanks to Tuesdays action that remains to be unfilled and coincidentally lining up with the previous gap from 8-15-13. What's this mean? We effectively created an island bullish price reversal higher leaving behind nearly 4 weeks of trading lower prices. This is typically a very powerful signal and this is one I am fully ready to embrace so long as we can hold onto this recent open gap. Coming into next week I will be looking for long setups in strong stocks and recent leaders. (more…)

how I lost 5 times my net average week

This past week my account suffered a net loss 5X larger than my average trading week, my largest loss this year. Now I admit for a split second post the market close on Friday I thought to myself, there is no way I can update my performance to show a nearly 3% drawdown this week-- I’ll have to lie. And immediately I thought to myself, fuck that, I am going to write a post about it so everyone can see. (more…)

why todays apple action changes everything

aaplgap2

Well yesterdays post was titled why today's action changes nothing and given today's brutal gap lower I felt it necessary to write a quick follow up.
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why todays apple action changes nothing

aapl15

All we learned from todays action was that the stock was not ready to breakout. Lots of speculative players and "emotional" trading really just means that we need to see a second day of price action to determine if the initial bearish reaction is going to stick for more than just a day. Most importantly we need to see a break from this pattern. President Obama's address on Syria combined with China Mobile meeting tonight should keep the volatility train rolling into tomorrows session.

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