Exit Strategies for Swing Traders on 6/12/2010, 8:00 AM - 9:00 AM PST 
This workshop examines key sell strategies for swing traders, including stop losses, profit targets, and more.  The material is drawn from the back test results published in the Exit Strategies reports.   The real bonus for attending live is analysis of your favorite markets.   Please bring the tickers of any stocks you are swing trading and we will evaluate different exits for them using end-of-day data in the session.    The Traders Expo is held at the Pasadena Convention Center, near Los Angeles California.

Click here for complimentary registration to attend in person.

For free live webcast of the Exit Strategies workshop, click here.

Tags: exit strategies, LA Traders Expo, Traders Expo

I want to share a couple key ideas with you.  I just answered all the write-in survey questions from the recent MoneyShow and if there was one theme, it was “how to know when to sell?”

The truth is that there is no one-size-fits all answer to that question because it depends on your goals and outlook. 

This particular moment in the market illustrates that really well.  (See chart above)  Short-term strategies such as price crossing the 20-day moving average and even intermediate-term strategies such as MACD Divergence have long since given a “sell” signal. The aggressive traders among us - myself included — have sold short and are now watchful of an opportunity to cover.

 I also follow a longer-term long-only strategy for my retirement funds.  The SPY below its 200-day MA tells me not to buy.  But is it a sell signal?  No, according to the 50/200 MA pair because the 50 MA has not crossed down through the 200 MA to give the Death Cross signal.    

 How will it play out this time?  I don’t know.  What I do know is how the strategies mentioned above have performed over the last fourteen years.  That data helped me to make the decisions about which signals to follow and with what capital.

 This brings me to the other frequently-asked question at the show:  “What is BackTesting Report?”

 BackTesting Report started as a series of e-books about the historical performance of various technical indicators and trading strategies.  I began the work because I wanted to know - for my own trading - what I might get out of these strategies, and which I might use for buy/sell decisions.

 BackTesting Report has expanded beyond the reports to videos but the concept is still the same:  to provide the data  to understand the trade-offs between the various technical strategies and pick the best strategy.

What about you?  How do you know when to sell?

Tags: exit strategies, MA, MACD

 If you have questions about BackTesting Report, MACD, stop losses, exit strategies, please feel free to

• Comment on this blog 
• Check out the newly updated FAQ at http://backtestingblog.com/faq/
• Attend one of these live sessions below

 eMoneyShow with live chat, Thurs May 27 10:55am - 11:40 EST (eastern!!)
Truth About MACD re-broadcast with BackTesting Report Editor Jackie Ann Patterson answering questions LIVE in the chat room
http://www.moneyshow.com/eshow/Las_vegas/Virtual_Show_Landing.asp  

 Los Angeles Trader’s Expo, June 12, 8-9am PST (pacific!!)
Exit Strategies for Swing Traders
This is the short-term trader’s counterpart to the recent investor’s talk on Exit Strategies.  Different mindset, different back tests, different results.  Watch in-person and live webcast.
http://www.moneyshow.com/caot/workshopDetails.asp?wkspID=5AD28705DA13495EA604782B8F67A97C&scode=018247

 San Francisco MoneyShow, Aug 19, 3:20 - 4:05 PST (pacific!!
Who Is Driving the CTIUS: Accelerator or Brakes?
Taking apart the CleanTech index illustrates one method of market analysis and delivers some insight into the high tech / clean tech world
http://www.moneyshow.com/sfms/workshopDetails.asp?wkspID=765B4047A40B457B8733D2FC919C2C65&spkrID=859182SPK&sid=SFMS10?scode=018610

MACD Divergence visible at 50 bar lookback

At the MACD Rain StockFinder webinar, a question came up about a MACD Divergence on the weekly chart of the Dow 30, as shown in the chart of the NYSE:DIA (Diamonds Trust Series ETF that represents the Dow 30). Click chart to see larger view.

The price and MACD indicator action lately on the weekly meets the basic criteria for a MACD divergence: the price is reaching a higher high while the MACD is tracing out a lower high.  During the webinar, the BackTesting Report MACD Divergence scanner for StockFinder did not mark that DIA weekly negative divergence on the default chart because price makes a higher high within 100 bars - the default lookback period.   But when the lookback period (user input DivSpan) is set to 50, the MACD Divergence on the weekly chart of DIA is marked in red.  See the chart at top.

The choice of 100 for the default lookback period was arbitrary.   Its the value used for the BackTesting Reports.  Other values were not tested.

Given that many stocks have similar price patterns of a higher high in 2008, to get a comprehensive view of all the negative divergences on weekly charts, one needs a shorter lookback period at least until Oct 2010.

Tags: MACD, Stockfinder

Join me and Michael Thompson of Worden Brothers for an educational webinar about the MACD.   I use the new MACD Rain chart to step through the MACD signals in order of their appearance in a stock market rally and eventual decline.   Market analysis follows with a look at MACD divergence on a selection of ETFs.

Watch the webinar archive

Download the free MACD Rain StockFinder chart by filling out the form below.   You’ll first be sent an email to confirm that you want to receive information from BackTesting Report.   Once you confirm your request, you receive the chart by email.   You will also receive other information from BackTesting Report.   We do not share our email list and you can opt out any time.    Please enter your name and email below to recieve the free chart.

Purchase the BackTesting Report MACD Divergence RealCode scans for StockFinder

Tags: MACD, Stockfinder

While the “leaders” of this market have lately been low-priced regional banks rocketing off the bottom, the stocks more typically thought of as leaders don’t seem to have so much fuel.   We seen that in the sheer numbers of stocks found by the MACD divergence detectors — negative divergences outnumbered positive divergences many times over.  

This week the NASDAQ:QQQQ and the AMEX:SPY (once again) showed us negative MACD divergences on the daily chart.   Here’s a screenshot of the SPY showing a gentle bearish divergence on the MACD lines and a more severe divergence on the MACD Histogram.

You can see another interesting development in the screenshot as well.  The SPY is breaking its upwards trendline.

Since I’m not an expert in the art and science of the trendline, I went back for a quick refresh to a handy reference on trendlines: the Market Club email trading class lesson #2.    Titled ‘Finding a Friend in the Trend’, it tells about drawing and reading a trendline. 

An important point for us today is to wait for two closes below the trendline before considering it broken.  Count #1 today!

Just a couple other comments on this lesson of the course…

1. Its got a nice chart of a double bottom with a sharp V between lows.

2. One section where I have to disagree:  it says bottoms are drawn out while tops are quick.   Maybe in futures but in my experience with stocks this decade, we’ve had relatively quick bottoms and drawn out tops.   

That leaves us to consider whether today is just another minor move in a long top or is the trend turning.   Watching that trendline just might help us understand.

To get the free 10- lesson email trading course from my affiliate Market Club, click here.  For more details, see this guest post by the course’s author, Adam Hewison.

Tags: MACD, MACD divergence, Market Club, SPY, trendline

Please join me at the Las Vegas Money Show, Tuesday May 11, 2010.

Tags: exit, MACD, MACD divergence, MoneyShow, stocks

Catching up on guidance from a master trader in four quick minutes.  Click the links to watch the one-minute videos and get grounded with a solid approach to trading.

Lesson 5 encourages focus.

Lesson 6 is my favorite. Click here to follow up with more information on how to get this step done right!

Lesson 7 is a simple technique to keep the “odds in your favor”.

Lesson 8 is arguably the most necessary ingredient to good trading.

Previously posted Market Minute lessons and commentary:

Lesson 4: Psyched up for the big trade? Don’t be!

Lesson 3: How About Doing What Works?

Lesson 2: What Time is Good for You?

Lesson 1: One Minute Towards Successful Trading

(BackTesting Blog is an INO.com affiliate)

Tags: INO, trading

My charts are plotted as candlesticks because they highlight detailed movements around the open and close.   Candlesticks also present recurring patterns which aim to portend the price action and which I haven’t (yet) backtested.    However, since candlesticks are on the charts in my BackTesting Reports, videos, and software, I want to give everyone an opportunity to how they are interpreted by experts.

If you’re interested in learning more about candlesticks, check out this complimentary video from my affiliate partner INO.com:  Click Here to Watch Now

The video is titled “Advanced Applications of Candlestick Charting”.  When you watch, authors, software programmers, and co-founders of the International Pacific Trading Company, Gary Wagner & Brad Matheny will walk you through:

-History of candlestick charting

-How to interpret candlesticks

-How to merge techniques of Eastern & Western technical analysis together

-How to merge candlestick techniques with your current trading plan

-And more…

You’ll watch and listen as Wagner explains the importance of using this strategy. He says, in part, “Candlestick patterns are a mathematical formula which illustrate the psychological market sentiment. In other words, as a market reverses, or a market is moving in an up-trend, there are certain traits that can be distilled in terms of mathematical formulas that will reveal some very important information.”

This 100 minute complimentary video can be found on Trend TV. You don’t have to worry about watching the whole video at once. After you have a password, you can revisit anytime to watch the rest of a video, review a video, or watch other videos on Trend TV.

Click Here to Watch Now

Tags: candlestick, INO, strategy