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RE: Stage Analysis Beginners Questions - isatrader - 2022-11-06
(2022-11-06, 09:43 PM)ferran Wrote: Hi David,
I'm currently screening for the market status and updating my watchlist mainly in the weekends and then monitoring the list daily (typically after the close). Due to my job, I dont have a lot more time to do it differently. I think Stan W would label me an investor
One thing I'm struggling with is that even when, say selecting the top performing sectors (eg SCTR score >90) and the best stocks, I still end up with a lot of stocks and have difficulty on further reducing it to a manageable # of stocks. As a result, I'm jumping around quite a bit and this makes it quite difficult to manage my focus. I not seldom feel I (just) missed a good entry, because I was looking somewhere else.
Would you have any advice how I, "an investor", can deal with this practical problem?
Any recommendation on which posts from you I should focus on? Currently the weekend posts are my top interest.
Thanks in advance!
The Market Breadth posts are the key to successfully trading/investing with the Stage Analysis method imo. As the weight of evidence tells you the strategy to use, i.e. whether you should be on offense or defense. Helps you to consider the risk of the market environment, and aids with market timing. i.e. the majority of this year of 2022 the market has been in a Difficult Environment in the Stage 4 for the majority of the time. So if you are an investor, then being mostly in cash, or shorting has been the primary focus. Which is different from if you are a trader, as there's been a number of short-term swing opportunities on the long side as well.
So I recommend focusing on the market breadth posts, as if the environment is poor, then there's not much for an investor to do other than tracking the developing bases structures and setting alerts at significant levels.
However, if you are struggling with building watchlist then I recommend limiting the groups that consider or the markets. i.e. you may only want to focus on certain sectors or groups even. Or just limit your scans to the S&P 1500, or less.
RE: Stage Analysis Beginners Questions - ferran - 2022-11-07
Thanks for the elaborate answer, some good tips in there.
I've been also mostly sidelined for the last half year atleast, but my fingers are itching on those top performing sectors (and feeling some FOMO on some of these runs on solar, oil).
Regarding the market breadth, I see you typically accompany the market breadth posts with a specific strategy you would take, which is very useful. Is there anywhere on the website an aggregation of these strategies for the different breadth conditions (eg below/above 40%, 40-60%, 80+%)? This would be useful to study myself and also see how this fits my own strategy sofar.
One thing I was thinking about to limit my watchlist was to focus only large/midcaps, but I'm not sure if I then exclude to highest potential trade ideas.
RE: Stage Analysis Beginners Questions - isatrader - 2022-11-12
(2022-11-07, 10:34 PM)ferran Wrote: Thanks for the elaborate answer, some good tips in there.
I've been also mostly sidelined for the last half year atleast, but my fingers are itching on those top performing sectors (and feeling some FOMO on some of these runs on solar, oil).
Regarding the market breadth, I see you typically accompany the market breadth posts with a specific strategy you would take, which is very useful. Is there anywhere on the website an aggregation of these strategies for the different breadth conditions (eg below/above 40%, 40-60%, 80+%)? This would be useful to study myself and also see how this fits my own strategy sofar.
One thing I was thinking about to limit my watchlist was to focus only large/midcaps, but I'm not sure if I then exclude to highest potential trade ideas.
I haven't published the strategy as yet, as it's something that I'm still developing, but it is based on the work of Dorsey Wright and the Bullish Percent Index Playbook that they created years ago in their service. Which has different strategies based on the NYSE Bullish Percent Index position and whether it's in Xs (Offense) or Os (Defense). So I use that concept, but applied to the combined Moving Average Breadth charts and with my own Stage Analysis focused strategies at the different levels, and none of the options strategies that the DW Playbook uses.
RE: Stage Analysis Beginners Questions - ferran - 2022-12-19
Hi David,
I'd really be interested to hear *how* you enter trades (and manage risk). Do you have any examples to share? Possibly you could spend some time on that in one of the future videos.
The weekly videos are really useful to build up a watchlist, but when waiting for breakouts, I'm usually too late and am worried about a fallback.
I thought about setting a buy limit order, but there I run the risk of a false breakout and I also cannot check the daily volume.
An example to make it more concrete; I'm an investor atm, so typically scan for weekly chart breakouts. I had $PDD on my watchlist. In the week of Nov 28th, the stock broke out of the range and gapped up. The weekly close was ±14% above the breakout level, so I don't want to chase it and risk a significant pullback. How would you practically enter such a stock? If you miss the initial move, how to still enter?
RE: Stage Analysis Beginners Questions - isatrader - 2023-01-06
(2022-12-19, 11:20 PM)ferran Wrote: Hi David,
I'd really be interested to hear *how* you enter trades (and manage risk). Do you have any examples to share? Possibly you could spend some time on that in one of the future videos.
The weekly videos are really useful to build up a watchlist, but when waiting for breakouts, I'm usually too late and am worried about a fallback.
I thought about setting a buy limit order, but there I run the risk of a false breakout and I also cannot check the daily volume.
An example to make it more concrete; I'm an investor atm, so typically scan for weekly chart breakouts. I had $PDD on my watchlist. In the week of Nov 28th, the stock broke out of the range and gapped up. The weekly close was ±14% above the breakout level, so I don't want to chase it and risk a significant pullback. How would you practically enter such a stock? If you miss the initial move, how to still enter?
Hi ferran, I've covered it in many of the previous videos and posts over the years, but with the videos it's always been mixed in with the other content. So, I'll try and do some separate videos in the coming months.
For me the market environment is the key factor, and I cover this each weekend in the regular Market Breadth: Percentage of Stocks Above their 50 Day, 150 Day & 200 Day Moving Averages Combined blog posts that I do each Saturday for the members, as depending on the market environment position that will determine whether I'm interested in playing Defense or Offense, and the overall strategy, as the market breadth position via the weight of evidence is crucial to my process. As if the environment is on Difficult environment status (which it was for 80% of 2022) then breakouts are avoided, and the focus is more on earlier Wyckoff entry zones within Phase C and D of Stage 1 base structures, and on the secondary Stage Analysis entry zone after a Stage 2 breakout on what is known as the Backup entry point in the Wyckoff method also.
I prefer to buy breakouts in a different way, as I don't actually buy breakouts, but instead use partial positions to start accumulating before a breakout if the structure is developing the right characteristics, and then add after the breakout to get up to a full position size. If done right then your average price is then often around the breakout price or less, and helps to mitigate risk as you are using smaller position sizes and so stop outs are less significant. Obviously this is my own style developed by merging the Stage Analysis and Wyckoff methods, so you won't find it any of the books. But part of trading is developing your own style, so it will be different for you and everyone else. But chasing breakouts in a poor market environment is a bad strategy, so you have to have different tools for different environments. As No. 1 rule is consider your risk first.
RE: Stage Analysis Beginners Questions - isatrader - 2024-04-29
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