Dump it Here

[Skate]

The Action Strategy is now live & all updates from this point will be an ongoing record of the strategies progress.

Signals
I won't be posting the AmiBroker signals each week with the Friday's updates (to save confusion) but as there is nothing to post the first week, posting the signals is better than nothing. This week there is no shortage of signals.

Friday's weekly update
Will be a summary of the weeks performance.

Suspended & delisted securities
There are some things that can be coded into a strategy where others are a little more difficult. The analysis report will not include "Suspended or delisted securities" . Being hit by a bus is a little harder to code as is ASX announcements so they will be checked for the reason below.

What overrides a buy signal
There is only one thing that will override a buy signal & that's an announcement of a takeover or a scheme of arrangement.

FYI
A "scheme of arrangement" is a court-approved agreement between a company & its shareholders regarding the compulsory acquisition of all the outstanding shares.

Positions placed in the pre-auction
The positions placed in the pre-auction will be posted tomorrow (Saturday) after they have been entered into CommSec as filtering the announcements of each individual companies is required.

Monday's report
On Monday I'll post the reports from "Share Trade Tracker" with confirmations of the positions executed.

This weeks signals


Luck
In life & trading we all need a bit of luck to be successful.

My next post
After the positions have been placed in the pre-auction I will post a confirmation tomorrow (Saturday)

Skate.

 

[willoneau]

Do you place orders on Friday before open?
I thought you would place your orders before the open on Monday?

 

[willoneau]

With so many do you place the top 20 in pre auction after screening the announcements?

 

[Rsthree]

That's a big list, I didn't expect that many to pop up.
I have about a quarter of those on my paper trading account and faves list. From my basic approach to charting I can see why many of those would be on the list, but a few not so.

What criteria will you use to select the 20 trades?

I'd like to see some discussion on the final selection so I can understand more and learn.

 

[Skate]

Do you place orders on Friday before open? I thought you would place your orders before the open on Monday?

@willoneau I normally go over the signals on Saturday & place them into the markets after Norgate Data has been updated overnight. I have the option of placing my orders anytime before the market opens on Monday but I alway place them on Saturday being a creature of habit.

Skate.

 

[willoneau]

Thanx Skate for the clarification, I also use Commsec but have never placed orders in pre auction. I usually use conditional orders.

 

[willoneau]

What overrides a buy signal
There is only one thing that will override a buy signal & that's an announcement of a takeover or a scheme of arrangement.

Good point as I usually just take the signals without looking at any announcements.

 

[Skate]

That's a big list,
1. What criteria will you use to select the 20 trades?
2. I'd like to see some discussion on the final selection so I can understand more and learn.

@Rsthree let me answer your two questions
1. All the buy signals have already been “ranked” by using (Amibroker- PositionScore). The PositionScore ranking code is confidential.
2. This is “no thinking strategy” - you take the signals as they are presented (I’ve explained the rules & how the strategy operates only a few posts back)

Discussion
Others are free to discuss why the signals have been selected but I’ve already explain all this in previous posts.

Skate.

 

[Skate]

Informational Update
The Action portfolio will include all the relevant portfolio information with every new update (for new readers) but for those who want to keep checking in & don't want to read something already read a separator & "NEW information starts below" warning will be displayed just before new information is added.

CommSec is closed for maintenance
"From 7.30am to 11.30am on Saturday 9th May 2020 (Sydney time), our CommSec and CommSecIRESS trading and investing platforms will not be available. We apologise for any inconvenience this may cause. This means that you will not be able to Place orders online" so in the meantime I'll make a few comments.

Making a profit
@willoneau the objective of trading is making a profit that requires careful risk assessment, disciplined money management, emotional & behavioural discipline but most of all you need the ability to execute a trading strategy flawlessly without hesitation. Losing streaks are a fact of life for traders so it’s vital to manage risk, because it’s your money on the line.

Why complicate something that should be simple
@Rsthree sometimes we are our own worst enemy because we have a tendency to look for confirmation about a decision that requires time to be confirmed & if we are wrong, then we doubt the system. Every system will have losing trades but we aim to be profitable in the long run. The Action Strategy is a "NO THINKING" way of trading, dipping your toes in as they say.

Follow your plan
For others - mechanical trading can be a simple endeavour if you are disciplined, follow the rules & stick to the trading plan. When the appropriate signal shows up, place your order and go on about your life. When you have a fully tested strategy there is no need to second-guess the signals.

Trading the bounce
This is the time to systematically “trade the bounce” as Duc would say provided you have the stomach to digest the volatility.

Skate.

 

[Skate]

I'm just filling in time
Traders understand the markets are based on human behaviour and our perceptions about what is happening at that moment will make traders rush into panic mode, causing huge selloffs. The markets are constantly doing things you don’t expect. Emotions are driving a lot of what's going on at the moment all due to the impact of the coronavirus on the economy. While one person sees buying opportunity, another sees nothing but more drama ahead - what you see can either save you some money or it can keep you from succeeding as a trader. The most common problem that traders have is that they overcomplicate their trading.

Skate.

 

[Skate]

Why is volume so important to the Action Strategy!
What does volume mean to you? First, it gives you the context to understand why volume is important when you are considering a trend. If an uptrend is not confirmed by an expansion in volume, then what you have is the same number of buyers or, worse, fewer buyers. When price rises, it does so because there are even fewer sellers! Once you realise that the market is trending with higher prices without volume confirmation, then you truly are at greater risk of the trend reversing & doing so both quickly & violently.

Probabilities
Trading is all about predicting the value of a security sometime in the future & the idea of qualifying the strength of a trend. I can tell you with certainty not all trends are the same in terms of strength, durability & viability - by qualifying the trend it provides a trader with an exceptional edge.

As it's nearing 11:30am I'm off to place my trades in the pre-auction..

Skate.

 

[Dona Ferentes]

I'm just filling in time
Traders understand the markets are based on human behaviour and our perceptions about what is happening at that moment will make traders rush into panic mode, causing huge selloffs. The markets are constantly doing things you don’t expect. Emotions are driving a lot of what's going on at the moment all due to the impact of the coronavirus on the economy. While one person sees buying opportunity, another sees nothing but more drama ahead - what you see can either save you some money or it can keep you from succeeding as a trader. The most common problem that traders have is that they overcomplicate their trading.

Skate.

about as sensible as anything.

 

[Dona Ferentes]

The following deals with a similar theme.
Understanding Market Dynamics: Looking Beyond The Headlines
By Greg Tolpigin

https://www.sharecafe.com.au/2020/05/08/understanding-market-dynamics-looking-beyond-the-headlines/

... "readers will note I have been particularly bullish the past month despite the barrage of negative news and have shown how economic data like unemployment are poor forecaster of market direction. As I noted to my office colleagues – play the ball, not the man!

The reality is markets are extremely forward-looking and move at far faster rates than ever before as information is disseminated and trader positions are changed with every new data point. Gone are the days of watching a ticker and reading the paper and then ringing your broker. So it is no surprise at all that markets fall and rebound at new record rates and why comparisons to things like the 1930’s depression are just, well, idiotic. Central banks and Governments move at faster rates now to as well, reflected in how quickly central banks have moved to cut rates and implement quantitative easing. Plus for starters, we are not on the gold standard anymore and Governments are not raising taxes across the globe.

So if markets speed and newsflow has changed, what hasn’t? Human psychology and how the herd acts. I explained in my prior columns how I have made more money from applying pure market psychology than I have from any in-depth analysis across my career. Fear and greed are emotions that will always be ingrained in human DNA. So during the latest market panic and subsequent rebound, market psychology was most at play as the emotions rose to the surface. No amount of analysis could determine anything of any substance because of so many “unknowns” and still all this analysis has analysts and economists scratching their heads. How can the Nasdaq be up on the year already? We haven’t even received the worst data point yet – tonight’s US employment figures. And like all the data points that have come before this one, the market will look through it because that’s what it does.

Markets are a discounting mechanism. They first price in the worst and then discount news as it becomes reality. Nothing in the data that is being released tonight or in the past month is anything we didn’t know at the beginning of February. Moreover, is anyone honestly going to tell me that 33 million unemployed Americans is notably worse than 30 million as the market would view it?

As markets collapsed on Covid-19, what has the media been reporting (financial media included) – death, job losses, infections, shutdowns, market declines, toilet paper pandemic – anything and everything that is a sensationalized headline. And it is what we see and react to. Magicians always say – “what the eyes see and the ears hear, the mind believes”. Why do bookies make so much money? Because they bet against the public. Why? Because the betting public always gets it wrong. So seeing the public run and stock up on toilet paper as though it is the most important item in life is a prime example of Neanderthal mentality. You have to take the other side of that trade.

You saw that same mentality in the market with a huge dumping and shorting of stocks not in February, but in March and even more in April. I showed charts last week of the dash for cash. So investors liquidate equity positions, shorters positioned themselves short and then what? No sellers left. It takes lunch money to move markets back up. I gave the example in a recent column of how I tried to buy just $30,000 worth of Super Retail Group at the height of the panic. I moved the share price up 8% and got filled on zero, despite being the highest bidder repeatedly. With no sellers, there is a scramble of short covering. But the sentiment is still the same – the headlines are bad – millions are unemployed and shorters again try to re-short and those that dumped stocks are too scared to buy in.

That explains why we still have sentiment and trader positions like this from IG markets published this week that the most shorted position across all their clients is the S&P 500 at 74%!



Maybe IG clients are just an anomaly……….nope. The AAII weekly survey that has been running since 1987 reflects the same thing. This survey asks investors where they think the market will be in six months. What is surprising is that the bearish views are still increasing! Up 8.6% to 52.7% versus a long-term average of 30.5%.



Even the UBS Wealth Management survey of their HNW clients showed that 61% believed markets needed to fall between 5 – 20% before they would be prepared to buy.

So the psychology works that as the market creeps higher it becomes the most hated bull market of all time. The shorters are squeezed and force prices higher. They are more aggressive than traditional long only buyers so the price moves are rapid and aggressive. Take a look at any of the US teach earnings to see the 20-30% jumps in price! This gives little weakness or opportunity for investors to buy – even in the face of all these negative headlines and data points – and they remain frustrated and “fear” they missed the opportunity. Eventually, the sidelined money has to find a home and with time the economic data passes its inflection point and the news is better. That fear now of missing out creates, even more, buying and with the Federal Reserve in the background pumping trillions, the ultimate outcome is a bubble.

Money made without drawing a single trendline or balance sheet analysis. Just pure understanding of market psychology and watching what the herd do, how they react and why under fear and duress the worst decisions are made.

https://www.sharecafe.com.au/2020/05/08/understanding-market-dynamics-looking-beyond-the-headlines/

 

[Skate]

about as sensible as anything.

@Dona Ferentes I'm unsure what your comment means. If you would elaborate I may have a better understanding. I'll make an additional comment that might help.

Intensity of psychological forces
Personality has a lot to do with trader’s ability to grasp & properly execute a trading strategy or trading plan because of the complexity of the psychological forces at work that take on a new intensity when your hard-earned money is on the line. Trading is all about human behaviour & perceptions

Skate.

 

[Dona Ferentes]

@Dona Ferentes I'm unsure what your comment means. If you would elaborate I may have a better understanding. I'll make an additional comment that might help.

Intensity of psychological forces
Personality has a lot to do with trader’s ability to grasp & properly execute a trading strategy or trading plan because of the complexity of the psychological forces at work that take on a new intensity when your hard-earned money is on the line. Trading is all about human behaviour & perceptions.

I'm not a trader, probably because I recognise I can't screen out (successfully, or enough) these factors/ forces. Tried it; doesn't work. For me.

But there are plenty of ways to skin the market cat.

(and; 'about as sensible as anything" means 'I agree with you" and like what you post, by the way)

 

[Skate]

I'm not a trader, probably because I recognise I can't screen out (successfully, or enough) these factors/ forces. Tried it; doesn't work. For me. But there are plenty of ways to skin the market cat. (and; 'about as sensible as anything" means 'I agree with you" and like what you post, by the way)

@Dona Ferentes thanks for the clarification & your kind words.

Psychological hurdle
Your beliefs about the markets are obviously different to mine. Your risk tolerance may be different to mine but when we dabble in the markets in all of its various forms it’s a probabilistic endeavour. This means there is a probability that we will be a winner or a loser.

We are different but have the same goals
The market provides plenty of opportunities if you're looking for them so I guess we are not that different after all. I look for increases in price, volume & volatility that may indicate further price increases. Sometimes it works & sometimes it doesn't. Managing the opportunities in a profitable manner is key to success & I guess you are no different.

CommSec is still down, it's the reason for my banter

Skate.

 

[Skate]

I resist getting on my soapbox these days
Talking about "Timing the market" is boring as most want to declare that it can’t be done but never explain why. I'll ramble on about "Selling" & how important it is when it comes to profitability usually misses the mark. When you raise the subject of being "Disciplined" most don't really understand because it conflicts with their belief system. Not being "Vigilant" when handling a portfolio can be a wealth hazard.

Important topics with regards to trading profitably
1. Timing the market
2. Selling
3. Being disciplined
4. Being vigilant
5. Following a Trading Plan
6. Being in charge of your emotions
7. Understanding the next step when you are wrong
8. Why having the correct mindset is important when it comes to trading

Traders we are all different
Traders are not just technical analysts, they have trading skills but some technical analysts never trade, they just fuss over coding formulas & strategies. As traders we are all different, I'm a trend trader & I trade my arse off.

Skate.

 

[Skate]

Sample of [ASX - PNR] placed in the pre-auction (CommSec)
1. The position is only "Good for a Day" & will automatically be cancel if the position is not executed on the day.
2. Commission needs to be no more than "$10" because commission drag will effect the systems performance.



Skate.

 

[dbpbsuen]

Hi everyone, newbie to investing and this forum - lots of great stuff!
Have recently relocated from UK to Aussie, and would greatly appreciate any suggestions on the following Qs:

1. Should I transfer money from my Cash ISA to invest or use money not from cash ISA in the UK?
2. Should I transfer money from UK pounds to Aus to invest or invest from UK pounds directly?

 

[frugal.rock]

It really depends on: what you want to do, current FX rates, convenience, fees and taxation implications, if any.

What you should do, is get the TARDIS whirring back a few weeks and change your cash to AUD...