Lunchtime Learning: Berk’s Trend-Trading

Some of you, and myself as well, think it was quite apropos for my to leave when I did, and return as I have.  I am a trend trader at heart, and the 9 months of rally that I missed were merely the time I was to be playing ping-pong and waiting for the next trend to show it’s love.  Since I can combine EWT with trend-trading, I am looking to catch individual equities that have been underperforming some where in wave 1, and ride them down all the wave until their motive move has reversed.  Stronger stocks, I will usually catch right at wave 3 is busting out…

Since I was lazy on one of my charts yesterday, and Gregn (I believe it was you) called me out on it…  I will give you a little piece of my mind…  (in a good way).  🙂

Here’s a little preview of how I am trading the next move down…

BB system entries.

You might be saying to yourself right now that you wouldn’t have done very will in a the given time-frame, and I concur.  All the entries except the first short entry have been stopped out just about break-even, or for a slight loss.  However, you are up a few points on the first short entry, and should X drop today, will be adding to that position.  Now for the fun part.

Notice that you may or may not have been stopped out (closes vs. pushes) on the second unit, but would have just added the next day anyway.

Can you say WOW?!?

Admittedly, there are quite a few chop and stop entries before you get the real love.  But consider this:  To catch the intended move (which as you can see is quite large) you must buy options with a shit-tonne (again, technical term) of time behind them.  Therefore, OTM, ITM, ATM, whatever, your options should be barely affected by these chop and stop price moves…

Basic premise:  Enter long on an upward break of the upper BB, add on a break of the second upper BB.  Reduce postition on a close back inside of the .75 upper BB and close the position completely on a close back inside the .50 upper BB.  Take no action inside the .50 BB, and reverse the directions for going short.  This system is best traded with stock or with long term options.

Notice that the winners banked roughly a 40% upmove and a 65% downmove (plus an additional 50% down move, but 25 to 12 isn’t so drastic {at that point}).  Winnings like that should easily clear out a number of chop and stop trades.  That’s it.  Please ask questions if you find it interesting.  I have a number of modified rules for it (set up for MY trading style), but I would love to hear your input.

Mole wanted to make sure that all of us don’t fall for this suspect rally.  Participation remains light…  Just trying to shake us shorts out…

1 hr zero chart.

UPDATE: 13:30EDT:

Updated $NDX count.  Looking pretty good here.   A push up here without a new afternoon low would eliminate the count as labeled.

$NDX updated counts.

Some close up action of my view on the current count.  Alternate count is in pinkish, and represents an A-B-C flat in wave 4 of minuette C in minute ii.  I know, I know hard to take all that proper-degree counting and shit…

Could it be we are ready for wave {{iii}} of {iii} of (iii) of iii of III (not really that many 3's but you get my point).

End of day count.  Sure as hell were trying to stop us out weren’t they.  Expect a pop and drop Monday, or a straight fall from the open.  Markets are weak here, and are struggling with reclaiming any intra-day high.

A final count for the day.

With that, I am off to do some errands.  I will be back for some kind of summary post later tonight or tomorrow.  Hope y’all fared well.

So I lied… One final diddy on the volume.

Now I’m out…  Catch y’all later.

Skål!