Bull Dog Trading

21 Period Moving Average as your only trading tool

noreply@blogger.com (Ashok Bhagria) — Sat, 18 Apr 2020 18:16:00 +0000

I am finding that the 21 Period moving Average is the only indicator you will need.

On a daily chart plot the 21 ema.

Long trade:
When price crosses (rises) above the 21 ema enter long
When price is riding above the 21 ema stay long with the trade
When price crosses (falls) to below the 21 ema exit the long trade

Short trade:
When price crosses (falls) below the 21 ema enter short trade
Stay short as price runs below the 21 ema
Exit/Cover short when price crosses (rises) above the 21 ema

Reduce wiplash:
Price can often move above and below the 21 ema causing false signals (wiplash).
In order to reduce wiplash, use a 5 ema to smooth out the price fluctuations.
So then we get a 5/21 period ema crossover startegy

Follow the trend:
Trading in the direction of the trend is the key.

When 5 ema > 21 ema trend is up
When 5 ema < 21 ema trend is down.

When 5 ema rises above 21 ema, enter long
When 5 ema falls below 21 ema, can go short

10 ema - Early warning:
I find it useful to also add the 10 ema as well. I use the 10 ema as an early warning indicator,
I.E. When 5 ema drops below the 10 ema, it serves as an early warning signal that the uptrend is weakening and vice versa when 5 ema rises above the 10 ema, that the uptreand is begnning to gain strength.

When the 10 and 21 emas are far apart, I take action on 1/2 my position at the 5/10 ema cross and the rest 1/2 of the position at the 5/21 ema cross.

When the 10 and 21 emas are close together, I take action on the 5/21 ema cross.

Conclusion:
21 ema is your main trading indicator.
In addition, you can use the 5 ema as a proxy for price. The 5 ema does not produce too much of a lag.
I also use the 10 ema as an early warning mecanism.
For higly volatile securities, such as leveraged etfs, one can use the 21 ema on a 60 minute chart in addition to the daily chart.

Timeframes to use

noreply@blogger.com (Ashok Bhagria) — Tue, 31 Mar 2020 17:59:00 +0000

What timeframes to use for trading?

For Swing Trade
Use the daily chart with 8, 21, 50 and 200 ema for big picture
Use the 60 minutes chart to time entry and exit --- 5/21 ema crossover

Optional:
Can use 30 minutes chart --- 5/21 crossover as an early warning mehanism.

Day Trade
Use the 5 and/or 15 minutes chart with 10 ema --- Price/10 ema crossover

High Volatility Covered Call Strategy - Volatility Call Writing

noreply@blogger.com (Ashok Bhagria) — Sat, 15 Feb 2020 20:49:00 +0000

Writing covered calls on volatile stocks for swing trading

The idea is to capture the stock movement when it swings within its short term range from high to low. The calls are written at the top of the ATR or the stock's range high as indicated by an indicator such as RSI, on the expectation of buying them back when the stock moves down in its range.

Pick a stock that is volatile, i.e. stock that moves a good bit in the course of the week, sometimes during a single day, i.e a stock that has a faily large ATR (average true range).

When the stock moves up by a sufficient amont and can pull back in its range, sell covered calls that are deep in the money.

You can use the following methods to know that the stock has moved up by a good amount and can pull back:

Stock has moved up by an ATR
The RSI has risen above 70 and is reversing/ falling back below 70. I use the 15 minute RSI on highly volatile stocks.

Also note that one has to sell DITM (deep in the money) calls that have a delta of 80% or above, so that the call options move pretty much in tandum with the stock.

When the stock moves lower in its range, close/ buy back the call at a lower price.

We are simply trading the call option and do not intend to hold the option to expiration. On volatile stocks, it may be feasible to sell and close the calls several times in the span of a month, yielding a return that can exceed 10% a month. This strategy relies on trading for the generation of profits. Obviously, capitalizing on such trades requires monitoring them closely in order in order to seize upon moves that yield a worthwhile profit. The trader will need to be available to watch the price movements.

Gold

noreply@blogger.com (Ashok Bhagria) — Thu, 13 Feb 2020 20:06:00 +0000

Gold on the move

Quote and charts from goldprice.org

1,576.04

+8.64

+0.55%

Direxion Daily Gold Miners Index Bull 3X Shares (NUGT)

noreply@blogger.com (Ashok Bhagria) — Thu, 13 Feb 2020 17:08:00 +0000

NUGT to $35 within range

Direxion Daily Gold Miners Index Bull 3X Shares (NUGT)

noreply@blogger.com (Ashok Bhagria) — Sat, 08 Feb 2020 20:23:00 +0000

NUGT 60 minutes

Use 8/21 EMA crossovers to buy/sell

Confirmation V/S Price
NUGT moves around a lot and the EMA crossovers can create false signals/whiplash. One can wait for an entire 60 minute candle to clear the 21 EMA for confirmation, but that will not give you as good a price. The trade off is confirmation versus price.
After the 8/21 EMAs' cross, I do not wait for any further confirmation, rather I take the signal at that point.

Direxion Daily Gold Miners Index Bull 3X Shares (NUGT)

noreply@blogger.com (Ashok Bhagria) — Thu, 06 Feb 2020 19:26:00 +0000

NUGT breaching Ichimoku cloud.
This is a bullish indicator.

GBTC

noreply@blogger.com (Ashok Bhagria) — Wed, 05 Feb 2020 20:39:00 +0000

Bitcoin beginning to move. GBTC above the 200 dma

High Dividend Stocks

noreply@blogger.com (Ashok Bhagria) — Mon, 03 Feb 2020 19:49:00 +0000

Money for nothing when you get your DIVIDENDS

FIVE stocks with greater than 5% dividend

Royal Dutch Shell (RDSA) 7.2%
Altria (MO) 7 %
Abbvie (ABBV) 5.8%
Exxon Mobil (XOM) 5.6%
AT&T (T) 5.5%

Direxion Daily Gold Miners Index Bull 3X

noreply@blogger.com (Ashok Bhagria) — Mon, 03 Feb 2020 19:17:00 +0000

NUGT testing the 50 dma

Trading Wisdom

noreply@blogger.com (Ashok Bhagria) — Sun, 02 Feb 2020 18:50:00 +0000

Trade What’s Happening…Not What You Think Is Gonna Happen. -Doug Gregory

Keep trading super simple - use only a few indicators and master one or two setups.

What seems too high and risky to the majority generally goes higher and what seems low and cheap generally goes lower. - William O'Neil

Markets are constantly in a state of uncertainty and flux and money is made by discounting the obvious and betting on the unexpected. - George Soros

The Power Of Moving Averages

noreply@blogger.com (Ashok Bhagria) — Sun, 02 Feb 2020 16:03:00 +0000

Moving averages are the most effective and simplest TA indicators.

Following are the four moving averages to look at:

8 and 21 ema

8 day ema

Very short-term trend

Strong momentum

21 day ema

Short-term trend

Pullback support during uptrends

If 8 ema is above 21 ema, short-term trend is up.

When price is above 8 & 21 ema, we have trend and momentum.

50 and 200 ema

50 day ema

Medium-term trend

Uptrend defense line to see if the uptrend will hold during a pullback.

200 day ema

Long-term trend

Bull’s last stand in an uptrend, bears last stand in a downtrend

When 50 ema crosses above 200 ema we have a golden cross, ie general trend is beginning up.

When 50 ema crosses below the 200 ema we have a death cross, general trend is beginning down.

Stocks that are in uptrend find support at the 8/21/50 day.
Stocks in downtrend get rejected at them on bounces.
Below the 200 day is real selling.
If a stock slips below the 50 day and does not rebounce from it - Huston, we have a problem.

8 ema
If stock is above 8 and 21 day, stock will see higher prices, be aggressive and ride along.
If stock losses 8 day, take profit, sell

21 ema
Often times, stock find support at the 21 day. If stock rebounds from 21 day, can buy back.
If stock losses 21 day, sell

50 ema

If stock looses the 8 & 21 day, look at the 50 day.

It is possible for stocks to find support at the 50 day and rebound back up. If stock rebounds from the 50 day, can start to buy back some.
If stock losses 50 day, sell

200 ema
If stock losses 200 day sell all if you haven't already.
Stocks under the 200 day are technically broken and hard to trust.
Once a stock losses the 200 day, there is no telling how far it can fall.

Do you feel lucky punk?

Day trading strategy

noreply@blogger.com (Ashok Bhagria) — Sun, 02 Feb 2020 00:07:00 +0000

Day trading strategy

On a 5 minute chart plot the 21 ema.

Basic idea is to get long when price rises above the 21 ema and get short when price falls below the 21 ema.

Price can often fluctuate above and below the 21 ema creating whiplash and false signals.
In order to reduce this chop, wait for a full candle bar to show up outside the 21 ema and don't jump in right when the price crosses the 21 ema. After you see a full candle outside the 21 ema, one can wait even further for a reversal candle. This is because often times price reverses from the 21 ema. Now if the reversal fails, get in.

Day trading is tough and requires one to be glued to the computer all day. It is also stressful after one enters a trade and waits for it to be successful. My hats off to day traders who can handle the excitement.

I'd love to hear from you with any suggestions, tips or tricks.

Running with the bulls

noreply@blogger.com (Ashok Bhagria) — Sat, 01 Feb 2020 20:33:00 +0000

How to pick bullish stocks with positive short-term technical indicators

Trading horizon: 15 days average holding period
Profit target: 10 %
Suggested Stop loss: 5 %

Volume and Price filters - Volume and price are key
Volume (Today/Average 10 Day)
First narrow down the list to those stocks where the trading characteristic of daily volume is above its 10-day moving average. For this look at the ratio of daily volume to the 10 day average volume and pick the ones with the highest ratios of those which have a ratio greater than 1.

Price Performance (5 Days)
Next apply a filter to pick those stocks that have experienced the strongest price gains in the previous five trading days. For this, scan for the 5 day price performance and pick the ones with the highest.

Moving Average filters - Moving averages are important and right behind volume and price.
Filter out the stocks that are below the 10 dma and 20 dma and/or below the 50 dma as well.

Basic filters to consider
Include only equities with an average daily volume in excess of 100,000 shares and a value of $4 in the searchable universe.
Security price > $4
90 day average volume > 100 K

Market cap filter
Select the equities that fit your particular investment style.
I prefer the mega-caps. The other choices are large, medium, small and/or micro caps.

Security type filter
I select only the common stocks and filter out things like ADRs, REITS and Unit Trust Funds etc.

Swing trading strategy

noreply@blogger.com (Ashok Bhagria) — Sat, 01 Feb 2020 18:58:00 +0000

Buy/Go long when

Using Moving Averages, RSI and MACD

8 EMA is above the 21 EMA (Trend is up)
Price is above 8 EMA (Momentum)
RSI > 50, preferable 50 to 65 (Success Probability)
Bullish MACD crossover has occurred

Using the Ichimoku

Price is above or just risen above the kumo/cloud
Bullish T-K cross - Tenkan ( 9 MA) has crossed above the Kinjun (26 MA)
Price is above the Tenkan (9 MA)
Chiku is above the cloud and/or price
Cloud ahead is twisted to green

Trading volatile securities

noreply@blogger.com (Ashok Bhagria) — Thu, 30 Jan 2020 19:42:00 +0000

This article discusses how to trade stocks and leveraged etfs, that have a fairly large ATR and can move by a good amount over a week or even over a day.

Keep it simple.
After trying out various technical indicators, I have narrowed down to the following.

Use the 60 minute chart V/S the Daily chart
Granted, that the daily chart is the best and most reliable for an overall view, however, one has to wait for a whole day, till the end of day to generate a signal. Albeit, this would be fine for regular securities, it produces too much delay for fast moving and highly volatile securities. There are 6.5 hours in a trading day, so the 60 minutes chart is 6 .5 times faster than the daily chart. In an attempt to speed things up we are going with the 60 minutes chart.

RSI on 60 minutes chart
Enter when RSI rises above 50
Exit when RSI drops below 50

On the 60 minutes chart the RSI is very sensitive to price movements and can whip around the 50 line producing false signals. To reduce this chop, add a 5 RSI points margin. So exit/get out when RSI drops below 45 and enter/get in when RSI rises above 55.

8 ema/21 ema on the 60 minutes chart
Enter when 8 ema crosses above the 21 ema
Exit when 8 ema crosses below the 21 ema

The ema crossover lags the RSI. This gives you a slightly less better price than the RSI strategy, but helps reduce whiplash by keeping you in the game longer.

Conclusion
So is the RSI or the moving average system better?
RSI gives you better prices but more whiplash.
The moving averages reduce the false signals at a slight expense of price.
Since the in and out dance created by the whiplash can cost you significantly, I prefer the moving averages cross over system.

One further thing to realize is that the moving averages are a lagging system and waiting for a cross over produces even further lag. This lag can be significant on a daily chart, but the 60 minutes chart helps to speed up the process and produces a good combination of lag and price, particularly for fast moving, volatile securities which have a significant ATR and can move a significant amount during a trading day.

Dance
Once the RSI goes above 50 or the 8 ema crosses above the 21 ema, there is no telling how high the security can rise. Similarly, once the RSI drops below 50 or the 8 ema crosses the 21 ema to the downside, we do not know how far the security will fall.

So the trader should stop guessing the high or low, rather they will have to learn to dance to every buy and sell signal.

Happy trading!

Bull Dog Trading

21 Period Moving Average as your only trading tool

Timeframes to use

What timeframes to use for trading?

High Volatility Covered Call Strategy - Volatility Call Writing

Gold

Direxion Daily Gold Miners Index Bull 3X Shares (NUGT)

Direxion Daily Gold Miners Index Bull 3X Shares (NUGT)

Direxion Daily Gold Miners Index Bull 3X Shares (NUGT)

GBTC

High Dividend Stocks

Direxion Daily Gold Miners Index Bull 3X

Trading Wisdom

The Power Of Moving Averages

8 and 21 ema

50 and 200 ema

Stocks that are in uptrend find support at the 8/21/50 day.Stocks in downtrend get rejected at them on bounces.Below the 200 day is real selling.If a stock slips below the 50 day and does not rebounce from it - Huston, we have a problem.

Day trading strategy

Running with the bulls

Swing trading strategy

Trading volatile securities

Stocks that are in uptrend find support at the 8/21/50 day.
Stocks in downtrend get rejected at them on bounces.
Below the 200 day is real selling.
If a stock slips below the 50 day and does not rebounce from it - Huston, we have a problem.