On Friday a reader asked for PowerShares QQQ (Nasdaq: QQQQ) in the blog comments. I told him I was travelling, but would show Friday’s Q’s today. So, today, you get the last two days of QQQQ. Let’s see:

Well, Friday it was buy, buy, buy… and how you did would depend on your money management. If you trail the plot cycles, then you held long all day. If you are more of an in-and-out quick kinda trader, then you scored on the first trade, lost on the second trade, and scratched the third trade. A pretty so-so day. The last buy signal of the day was on a candle marked 15:59.46… and if you went long in the last 16 market seconds, you closed at EOD for break/even. But please don’t take a trade that close to the end of day!

In today’s action, the simple stock system basically said to get short near the open for a nice ride down. Then it stepped aside for the rest of the day. Since it was much more choppy after that, I think that was a good choice!

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QQQQ	| |

Those stocktwits seem to have a one-track mind. I was excited to see a new ticker at the top of their discussion list, because that’s how I pick the stock I feature in a totally unbiased way. For a long time they’ve been sticking with SKF, so I thought FAZ would be a nice change… but it’s just another freaking inverse finance ETF… only with more leverage. Oh well…

The simple stock system, made up of just a few eotpro indicators, picked a single entry on Financial Bear 3X (NYSE: FAZ), and not a bad one at all:

It did pull back on you before running, but even with the tightest of stops you’d still be fine, as it didn’t even penetrate the low of the entry candle. A pretty smooth ride up after that. Sweet!

Incidentally, there is a table of volume bar settings that I use for these. I take the 30-day avg volume, and use the overview settings for all these stock charts. If you don’t want to bother looking it up, all you have to do is take the 30-day avg volume, divide it by 100, and pick the next highest fib number. Let’s take today’s stock as an example. FAZ is so new it hasn’t even been trading 30 days, so I just looked at the last couple days of volume… about 3 million shares or so. 3,000,000 / 100 = 30,000. So, I went with the next highest fib number of 46,368 share bars. Couldn’t be easier!

The indicator picks the entries mechanically, and I use the same settings on all stocks, and I always show you the whole day on the featured stock. So, no funny-business or cherry-picking. Just sweet, sweet profits.

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FAZ	| |

Today I’m featuring Potash Corp. of Saskatchewan, Inc. (NYSE: POT), which was the #2 most-discussed stock on stocktwits. As you might guess, #1 was SKF, and I just refuse to feature SKF again so soon. They’re just going to have to make more varied selections.

Three long entries, all of which look pretty good. The second one pulled back on you, and I wouldn’t be ashamed to cut that trade off after a while. No matter what, it was a decent set of picks.

On Daily Charts, Too!

By the way… the every push entry signal has been adjusted so that it works on daily charts now, too. Here are the last few months of POT:

Some nice short entries, no? This is my first try at adapting it. As I look at more daily charts, I may make some adjustments. I firmly believe that in the markets, a chart is a chart, though, so I don’t see why everypush entries can’t work well for swing trading, too.

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Finally, the stocktwits discussed a stock more than SKF. Sadly, they chose General Motors Corporation (NYSE: GM), which spent most of its day in a tight range. If I ever finish my article on daytrading stocks, one part of it will describe the fact that you want to trade a market thats moving. Oh well, the simple stock system still handled it well, which is nice:

I want to point out the end-of-trend indicator in the second-to-last subgraph. In particular, look at when the thick blue line comes up toward the top and turns magenta. This marks the area where you want to be careful, and potentially take your profits. Look at how it pegs all three big moves of the day!

Here are the trades:

1. We have a long trade which reverses up at 4.50ish rather quick, but you’d know better than to let this winner turn into a loss, because end-of-trend is warning you. Fantastic!
2. Then, we have a nice short trade. Again, end-of-trend helps you pick a great place to scale out.
3. Then, we get stuck in a sideways range… and the system repeatedly tells you you want to be long. See the volume pressure staying to the upside, which also helps you to hold on. If you eventually sold this for break-even, or even a small loss, I wouldn’t blame you. But, if you held on, eventually you got the predicted pop up, and end-of-trend tells you when to aggressively protect your profits.
4. Finally, we get short toward the end of the day, but the stock just sits there. You’d close at end of day for b/e, give-or-take.

So I guess I got my wish, and got to profile a stock. Too bad it was today, since it looks like freaking SKF trended down smoothly all day! Still, I am pleased with what the system did with this mess. When I first pulled up the chart, I admit I wondered if I would get chopped up. Turns out, the system was ok!

Please note that if you only traded on the right side of Alla’s Average (the dashed yellow average on price action), you’d just have the big short trade, and the flat short trade. In my own personal trading, I rarely fight Alla’s Average, but I wanted the demo system to have as many trades as possible (readers like action!) and it seems to still do ok.

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GM	| |

Once again the stocktwits discussion board can’t get enough of UltraShort Financials ProShares (NYSE: SKF). Well, fine… here we go again…

Read it and weep, my friends…. the simple stock system handles itself very well with 4 wins and 1 loss. The loss is easy to spot, being the first long trade of the day. Note that if you used Alla’s Average (the dashed yellow line in the price chart) as a trade filter, you’d have 3 trades for 3 wins. We have all kinds of tools to fine-tune trading systems with eotpro…. for the posts tagged “simple stock system” I just try to keep it very simple.

Doesn’t anyone trade companies anymore? All I ever get to feature are ETFs! I must admit, they are nice, smooth trading devices in these crazy times. I guess that’s the reason.

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Well, sadly, the fine traders at stocktwits discussed the UltraShort Financials ProShares (NYSE: SKF) more than any other stock, again. I’d just choose a stock that I like, but then retards would come out of the woodwork claiming I’m trying to hide something. So, here we go a third time in a row, with SKF.

So, clearly the first long trade is a stop-out. Then we get a nice winning long trade, and two winning short trades. 3 out of 4 ain’t bad! Definitely profitable.

Check out past posts tagged simple-stock-system if you haven’t… for such a simple combination of eotpro.com indicators, it performs pretty well I think.

As you can see, I always use the same indicator settings, always show you the whole day, always choose the volume chart settings based on the 30-day volume, and I just go with whatever stock the stocktwits discuss (unless a reader requests a stock). And the entries are chosen mechanically (see the dots in the first subgraph?)!

Anyway, I think a human trader could have easily gotten short in the morning, after that first stop-out under alla’s average. It wasn’t mechanically selected because the first red candle body was cut by the moving average. A human trader could assess the situation a little better. But, that’s why I call it the simple stock system… because it’s so simple!

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SKF	| |

Darn, those stocktwits people sure do love UltraShort Financials ProShares (NYSE: SKF). It came out on top of their list today, so of course I had no choice but to select it again. Sigh….

But, as you can see, performance is quite good. Check the end-of-trend indicator at the bottom, which gave many good clues about when to exit the positions.

So, by my scorebook, I count the first two short trades as one win, as you’d be sitting in the first when the second arrives. Then the long trade is a nice win. Then we have a short trade that is iffy… depending on where you put your stop you might have bailed for break-even or a small loss. If you did, then the last short of the day got you right back in to close out the day with a winner.

It’s been a while since I’ve posted the rules, so…

• Volume chart chosen based on 30-day average volume (I generally use the overview settings from this reference post on these stock charts).
• New push on the everypush paintbar (first red or green bar)
• Volume pressure on b/a-histogram is up for long, down for short.
• End of Trend is below 90
• Closes above the fast MA for long, and below for short. Candle body must not be touching the MA… candle wick can be touching the MA… that’s still ok.

Those rules are how the mechanical entry dots are generated. Not very complicated… With good tools it’s not too terribly difficult to trade profitably. Most of it is the mental game, and following through on your plan.

Hopefully those stocktwits people will pick more variety soon… I’ll get bored featuring SKF all the time.

Believe it or not I have a really long post on stock trading in the works… it’s been halfway done for months now. I just need time to finish it up. I’m extremely busy lately!

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SKF	| |

I’m in a hurry today, so this post will be short. As usual, I picked the top stock mentioned on stocktwits.com so that you know I’m not cherrypicking.

Today, it was UltraShort Financials ProShares (NYSE: SKF), and it basically told you to get long in the morning and stepped aside. Not a bad thing…. but I wish it offered a third entry in the afternoon. If you line up the first green bar in the afternoon with the volume pressure you can see why it didn’t flag that entry. However, the price went sideways for three bars until volume pressure popped up. So, here again we have a case where the human would reasonably know to enter, and the simple stock system was…. well… too simple ;-)

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I personally love to daytrade the e-minis, and we show off e-mini daytrading in the eotpro.com live room every day. That’s why I have been trying to focus on stocks here at the blog lately: to make sure people understand that our indicators work great on them, too!

As most of you know, I try not to cherry-pick anything. Not the stock (when a reader doesn’t request anything, I simply pick the top-discussed stock on stocktwits). Not the timeframe (I use a volume chart chosen mechanically based on the 30-day average volume). Not the time of day (I show the whole day). Not the indicators (I use the same ones every time, with the same settings). Not the entries (they are chosen mechanically by an entry indicator). And every stock I’ve featured so far has looked decent.

Damn, I’m awesome!

Anyway… the top stocktwits stock today was Google Inc. (Nasdaq: GOOG). We have a short entry and a long entry. You’d probably scratch the short unless you were itching to take profits. But the long was very-well timed! Check it out:

Note that if you were bullish on the open, you could have traded the second bar… the only reason the mechanical entry indicator passed on it was because the end-of-trend indicator was up. That will happen most times when there is a decent-sized gap.

Check out past posts tagged simple-stock-system to see other stocks I’ve featured. It just goes to show that with the right tools, daytrading doesn’t have to be all that complicated….

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GOOG	| |

In the comments, Todd requested that I feature Energy Conversion Devices, Inc. (Nasdaq: ENER). So, here we go….

Two trades, for two wins. The move at the open was rejected due to volume pressure to the upside… looks like there was some buying pressure on the way down, either bottom pickers or short covering. The second move down was much cleaner from a volume perspective, and was picked off nicely. The long trade took its time, but did drift up without retracing much.

I’d say this was quite a nice performance from the simple stock system. I mean, it’s mechanical entries, after all, and it’s done quite well. I don’t cherry-pick the stock (Todd chose it), or the time frame (it’s chosen based on the 30-day avg volume), or the time of day (I always show the whole day), or the indicator settings (they are always the same). Just a couple of my eotpro indicators and a little common sense go a long way…

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ENER	| |

Cool… I didn’t realize so many ETFs had moved from AMEX to NYSE. Anyway…. reader Todd requested QLD in the comments. Honestly, I prefer stocks to ETFs because the volume flow is less confusing to track, but here we go:

The simple stock system selects 6 entries, of which 4 were clear winners. The first and fourth trades didn’t just run the other way… but the pullbacks were severe enough that you might have wanted to take a small loss. In any case, the winners here should definitely edge out the losers for any daytrading style I can imagine. So, not as strong a showing here as the Goldman Sachs example I just posted, but pretty good nonetheless.

I have yet to see the simple stock system have a bad day on any stock I’ve thrown it at. If you are curious, look over the posts tagged simple-stock-system, and see for yourself!

Today’s top-discussed stock on stocktwits was Goldman Sachs Corp. (NYSE: GS), so I pulled up my simple stock system on the chart. You can see from the dots in the first subgraph that there were four trades selected mechanically. All four were winners, with maybe the third one so scary that you’d want to bail break-even. Not bad, at all!

I added arrows on top of price action where the dots fired, so you can see how it lines up easier. Sweet!

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GS	| |

As usual, I went with whatever the top stock on stocktwits happened to be. Today, it was UltraShort FTSE/Xinhua China 25 Proshares (NYSE: FXP). I’d rather have real companies rather than all these ETFs, but whatever… you deal with what you’re given.

I mark four trades on this chart, and my mechanical entry finder found three. The last one wasn’t mechanically identified because the first green bar still had negative volume pressure (on the histogram in the subgraph). But, two bars later, the volume pressure was building to the upside, and price hadn’t moved anywhere. So, I marked it. If that’s too much discretion for you, then feel free to disregard that trade.

Anyway, here’s the chart:

So, trade 1 had its volume pressure go into the red shortly after entry. It did hover near the entry price for a few bars after, allowing you to essentially scratch the trade. You wouldn’t quite break even, but you wouldn’t lose much. Trade two would either be a win or a loss depending on your money management. If you used the plot cycles to manage risk, then it would be a big win, and there would be no trade 3 for you. If you used the top of the bar, or the moving average for your stop, then you took a small loss. Then, trades 3 and 4 were nicely profitable.

Look back across the simple-stock-system posts, and you’ll see that every darn one of them looks pretty good. They aren’t all perfect, but none of them look horrible. That’s saying a lot, since it is such a simple system. If you are curious about the rules and setup, etc, just look at one of the recent past posts… I repeat them every so often.

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FXP	| |

Today the top stock on StockTwits was Google Inc. (Nasdaq: GOOG). The simple system produced 2 trades, both long. The first would be a small loss, and the second ran like crazy. I don’t have time at the moment to go over all the rules, but basically I am showing how just a couple eotpro indicators can be used to daytrade stocks rather profitably. I don’t cherrypick the stock (I use what you suggest, or what I see on stocktwits), or the entries (they are mechanical), or the time of day (I show the whole day).

There’s about 15 minutes left in the markets, but I’m going ahead and taking the snapshot because I’ll be very busy post-market tonight. Enjoy!

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GOOG	| |

As usual, I looked up the top stock on stocktwits. I can’t say I was surprised that General Motors Corporation (NYSE: GM) showed up as most-discussed. As often happens, GM was doing a lot more volume than its average, so I got more volume bars than I would generally want. Still, the demonstration system I use handled it quite well!

Here are the screen shots, with the whole day’s signals. I should note that these are 100% mechanical signals… I drew the arrows in to show you how it lined up to the indicator’s dots.

You might wonder why there wasn’t a short trade on the first red candle after the open. The answer is that End-of-Trend (the thick blue line indicator at the bottom of the chart) was all the way up. The mechanical system plays it safe and disallows trades when end-of-trend is up. You could choose to take the trade anyway, at your discretion. Right at the open, I’d say that’s not a bad bet to make.

Other than the first and last of the long trades (which many people would skip anyway since we were under Alla’s Average), I didn’t see any losses. A couple close-calls, maybe. But, overall, I think the simple stock system did a great job on GM.

And think! I didn’t cherry pick the stock, the time-frame, or the signals, and I showed you the whole day. And, I invite you to ask for your favorite stocks to be featured, and I’ll get to them one at a time.

If you need a refresher about what “rules” I use, here you go:

• Volume chart chosen based on 30-day average volume (I generally use the overview settings from this reference post on these stock charts).
• New push on the everypush paintbar (first red or green bar)
• Volume pressure on b/a-histogram is up for long, down for short.
• End of Trend is below 90
• Closes above the fast MA for long, and below for short. Candle body must not be touching the MA… candle wick can be touching the MA… that’s still ok.

(and if you haven’t been following my futures trading, this is essentially the same method I use on futures lately, with some alterations)

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GM	| |