We see the market as sideways to down in the next several days. Therefore accumulating some stocks at better prices than the open on the start date for the trade may be a good strategy. I often like entering on down days if the opportunity presents itself. The bulls are in control and we are seeing that some strong buying is likely to come in around Thursday and Friday.

I have posted some stocks from a variety of screens over the last several days from The Cycle Vision program. I have not spent a lot of time going over the charts. Some are around new highs and others are in consolidation- some are higher priced and some are lower. Therefore, I have selected a variety for you from the best trades for the year on any of these stocks on the CV program.

Wishing you the very best,

Rob

download spreadsheet cv-trds20100309-1

One really great thing about the Cycle-Vision program is we can see the collective cycling of all the stocks we are testing. This becomes an over-all market indicator because it shows us when all the stock cycles line up. At these times, we expect to see big moves as the collective cycling gains strength to one particular direction.

During periods when the market is in decline, CV will naturally deliver fewer long trades than it will during times when the market is gearing up for a rise. In some tests we have conducted, Long CV trades during these periods tend to lose less than the market as a whole during declines. Put another way, because their cycle is up, a CV long trade resists the selling that occurs during overall market declines.

As a result of the current cycling, we do not have a lot of trades this week. Hopefully we will see some sell off to provide us with new buying opportunities in the next week or so.

For now then (keeping in mind we are getting near the top of an intermediate term cycle), I reserve putting out any new trades past the GMCR and SBAC trades we currently have recommended.

A couple of tips on managing the current winners: GMCR has gone up to test new highs. There is nothing wrong with taking profits up there after a nice run-up. SBAC has been a little slower to start and is breaking higher today.

The word Ecstatic comes can be traced to a root meaning, to stand beside one’s self. Always remember to take a occasional step outside and enjoy life.

We have generated some stock trades for Monday from the CV program.

I started with a list of stocks that were trending upwards and have positive earnings growth. With the CV program, we can analyze the stocks in multiple time dimensions simultaneously. This is very powerful. I analyzed a list of stocks in 65 different time dimensions and found there were no shorts on any of them for these stocks in any of the 65 time dimensions over the length of the trade.

I will provide you with two examples below, and on one of these there are two trades; one shorter term and designed to maximize daily return and the other to maximize the overall return.

Symbol=GMCR
Buy 3/1 open
Sell 3/17
Median Return = 10%
Win%=90

Symbol=GMCR
Buy 3/1 open
Sell 5/5
Median Return = 23%
Win%=100%

Symbol=SBAC
Buy 3/1 open
Sell 3/16
Median Return = 10%
Win%=100

Our overall market analysis for CV sees a lot of stock market buying coming in around 3/13. Therefore, shorter term trades may be more prudent.

Max adverse excursions can be large in some cases, so options (preferably in-the-money) can be used.

Past performance on these trades is not necessarily indicative of future performance for that same trade. Use prudence trading.

Update: C-V stock trades

We are happy to share seasonal trades with you from the project we have been working on for the last 17 months.

The code name is Cycle-Vision and it is a tool to identify highly reliable trades in ANY market including stocks, futures and forex.

Right now we would like to share with you some commodities trades that Cycle-Vision has produced for us.

We have been trading some of the trade recommendations from Cycle-Vision and have been making consistent profits with what is probably more important very reliable high percentage trades.

Here is a list of current or coming up trades for commodities that we have put together for you -

Windows users - download spreadsheet

Mac users - download numbers

Let us know what you think.

More on this topic -

The Best Choice in Seasonal and Cycles Trading Software

Stock Market Cycles - The Key to Profits

- Rob & Vadim
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Here are a few of our latest forecasts -

Sing up today!

There are many stock market sayings that have been passed down from the sages of old; “The trend is your friend., Buy the Rumor, and sell the news, Always buy on strength”, to name just a few. There are hundreds of these sayings. I love them all because, after all, why would anyone not want to receive the benefits of wisdom of the sages of old?

One of my favorites is “Never hold (or carry) a losing position over night.” This advice sounds profound, meaningful and wise, sure enough; until you start thinking about it ;-)

What exactly does it mean to not hold a position over night (winning or losing)? Certainly this must have some valid purpose. If I had bought minutes before the close and the market went lower, should I then panic in the seconds before the close and exit? What if my entry were just plain random (no particular logic behind the buy or sell) and I had a money management method that turned such positions into winners. Should I code my secret money management system to exit just because my random entry was, well, a little more random? I think not.

It is always important to scrutinize words of wisdom coming from any source. A lot of this kind of thinking comes from a day trading mentality. I often marvel how people can even use a word such as “day trading” in a market that trades around the clock like the Emini S&P contracts. This contract gets started on Sunday night and stops only for a short time each day for system maintenance in the afternoons. It then runs until Friday close.

Oh yes, the markets have changed since the days of old when many of these sayings may have had at least some level of validity. So, in this modern era we live in, perhaps the saying would be changed to, “never hold a losing position over the weekend?” I don’t know. It still doesn’t seem to add up to anything making any sense at all to me. This particular saying couldn’t possibly have any validity unless it was followed by the word “if” or “unless.”

For example, don’t hold a losing position over night if you are in a margin call. Now there’s one that makes good sense. Brokers get really mad when you do this to them. In the event your alarm clock is broken; it pretty much guarantees you will get a morning wakeup call from your broker. Hey, who says brokers don’t give full service anymore?

I can think of another good reason to not hold a losing position over night. When you don’t want to be holding the position (for some good reason).

Still looking for sage advice on the stock market? I certainly hope not. Count your blessings! Give thanks we have been given a sound mind of our own. After all, if we didn’t have that, then who’s mind exactly might it be we would delight in having possession of (I am sure this is correct grammar)?

Next time you are thinking of a market asseveration to base your future market earnings upon, be sure to use your noggin. If you are not up for the task, I’d welcome your asking me to write another article on whatever great words of perspicacious market wisdom you might come upon. I’d be absolutely overjoyed to share what sound mind I have remaining ;-)

One of the very worst things that can happen when you begin to trade a new trading system is to start losing right out of the gate. Just about anyone will tell you this occurs to them, “every time” (let me hear a big Amen). This tendency of human behavior is not just limited to trading a system you just found or created either. When I managed hundreds of client accounts, they would all pile in at certain times and leave at others that guaranteed they would lose. They did this with such remarkable accuracy buying my equity highs and selling my equity lows, it would amaze you. Why does this occur and how does one get the best (instead of the worst) of it?

When one is drawn to a trading program, it is because it is doing well. Never the opposite. Ever get an evening call from a broker in some boiler room in New York pitching you with a money manager’s performance that is losing, saying, “Mr. Prospect, this money manager has lost so much money recently, that if you come in with him now, you will surely be a winner?” I didn’t think so. So let’s recognize we are drawn to a new trading system or trading program at any given time because it is doing well. Step one to avoiding the inevitable is to track the trading program for a while to wait for it to not be at a new equity high.

It is simple; buy low and sell high. Maybe nobody ever told you that phrase applied to the equity curve on the money manager or trading system you were looking at, but the principle is solid.

On a trading system that trades the Emini S&P contracts or the SPYders shares etc. I would wait for a drawdown to occur that was average before entering. So you say to the broker, call me back when this money manager is losing, not winning (TIP: that might help to get the broker off the phone).

In the event I am already trading the system, and wish to add contracts for compounding, I use this simple rule of thumb: I wait to increase my equity enough to add a contract while the system is in a new drawdown from an equity high I benefited from. In other words, I will make enough on the system so that after drawing down from the high, I still have enough to add the new contract or shares. What this does, is it increases the probability I will not draw down while doubled up. This is also very important from a psychological stand point as well, because when your equity fluctuations double from having added new contracts or shares, it will likely be a bit unnerving at first; particularly if you are not up. This strategy helps to protect your earnings.

How do I get out of a trading system or money manager I am trading? I get out while I am ahead. If the system is making too much money too fast, it will likely implode, so it is best to get out while the going is really good. Oh yes, you might leave some good gains on the table at some point, but in the long run, this has always proven to be right. Look at any S&P or NASDAQ chart from late in the year 2000 and you will see what I mean. When the curve goes exponential, get out. Buy something that’s low, quiet and poised for growth.

These simple principles will serve you well, but it is hard to do. Grit your teeth and do the opposite of the herd as I have described above. Will it be a money management bonanza? Maybe. If you can stick with it, apply the above principles and manage your risk, I’ll will see you in the winner’s circle next year.

“You have to take what the system delivers to you and not decide how you are going to trade the market. Many traders decide, “I am a day trader, or I only trade Dow futures etc. when they may have a perfectly good system in front of them and it would only take a small change in their behavior to accept it, but we repeatedly observe a refusal on the part of traders to make that change- In other words, traders form beliefs that prevent them from seeing or doing what they need to be to be successful-“

It never ceases to amaze me how traders that subscribe to our services categorize what kind of a trader they are and what specific markets they trade without a review of any kinds of facts. Perhaps they read a book that had a leaning towards a particular style of trading or a friend that has told them they had done well trading on a certain time frame or in a particular market. The point is, traders do make choices about how they trade. Often traders are not even aware of the implications of the choices they have made, or in many cases, they are not even aware they have even made a choice from a range of possible choices. One makes choices based on their goals or interests. For this reason, it is very important that you decide what you are in the game for, right out of the gate.

Here are some choices traders make in this regard:

To make money
For fun and excitement
To fulfill a secret desire to lose or fail (that is not a joke)

Trading is a very difficult game. You must know what you are doing to succeed. This is true because more often than not, you are losing if you are not winning. This makes it unlike most other businesses where you have a fixed cost, but do not generally lose if you do not have business in the moment.

What kind of trader you are ties directly to your goals. For example, if you want to make money, you may be inclined to take winning more seriously than a trader who trades for fun. The person who trades for fun, may rationalize to himself, it is alright to lose. He may be inclined to not manage his risk so tightly. The trader who comes to the game to make money, will also be more willing to adapt his style to what works, rather than trying to force himself into a mold like, “I only trade Russell futures”, or, “I only day-trade.” For this reason, the trader who comes to the game wanting to make money has a psychological advantage in that he is more willing to alter his behavior in order to achieve success. This trader profile has another advantage. He still gets to have fun and to deal with the incredible challenge trading brings. Of the four types of traders above, this trader, whether he is aware of it, is a winner.

A trader, who trades for fun and excitement, is most likely a very short term player who thinks of himself as a scalper, or day trader. This is where all the action is. This market participant trades very frequently and at various points through the session. This trader’s paradigm for trading puts the excitement before the profitability and business concern for lowering costs and maximizing return. This choice, as we mentioned, may or may not be conscious. This trader may tend to have a smaller account, and a natural concern for trying to keep what he perceives as risk minimized. He may not be aware of other choices available to him. It is natural for this trader to need to think this way, since he is forced to by the structure of the market. This implicit “forced” choice may be a huge disadvantage for him, as he may be taken out of his positions by small stops on “would be” winners and may spend excessive amounts on commissions and slippage when compared to a longer term player.

This is not to say it is not possible to be successful as a short term player. In fact there are entire firms set up around this kind of activity. They are well capitalized. These firms have excellent execution capability, information and can execute at little or no cost. Firms doing this can be highly profitable. The small trader does not have this kind of information or capability. We believe less than 1% of day-traders or scalpers can outperform longer term players in the long run.

By having the need to get a rush out of trading, one is in a worse psychological position than the person who does not care so much, or is trading longer term. The trader in this profile has made choices that work to his disadvantage. When combined with the idea described above, where you tend to be losing when you would otherwise be winning, it makes for a losing proposition in most cases. This is why we suggest small accounts use options to control risk. It gives the rush potential of having huge percentage winners when they happen, without risking the whole account.

Some traders come to trading with a hidden desire to defeat themselves. They beat themselves down when they trade. They most often do not have a plan. Then, they have a. “see, I told you so” attitude when they lose. Always remember the saying, “be careful what you wish for, you just might get it.” This trader is actually extremely successful, because he gets exactly what he asks for. This occurs even when he has an amazing trading system to work from. We could praise him for it, but he would not think it was very funny. If you find yourself in this mode, simply reverse your thinking. You will be amazed what will happen.

All of these trader types need to be conscious of their choices. In fact all of us have each of these tendencies welling up from inside us. We need to be aware of the behaviors, and the paradigm behind them, so we can identify when we are going astray. We all want to trade, make money and have fun. Slight variations in these categories and the way we think about them can result in a huge difference in the result we get.

Ideally, the successful trader wants to make money as a number one goal. He wants, and needs to have fun doing it. He needs to be aware of behaviors that sabotage his efforts. He needs to be aware of choices that are available to him and their implications. He needs to manage his risk, his cost, and be capitalized properly to succeed, or trade using instruments that make all these things line up in his favor.