MainStInvesting
Long

SPY Late Day Rally Entry Signal

BATS:SPY   SPDR S&P 500 ETF
335 16 3
I didn't catch this trade as I wasn't able to watch the market late yesterday afternoon.. the perils of other responsibilities.

Anyway, thought I'd post an example of an aggressive swing entry to participate in a rally similar to today's (we will have more, don't worry). Nice example of the EMA cross over's on heavy volume , RSI and %R strength and the MACD crossover occurring 30 minute's before the actual EMA cross (this provide's the interest in the trade, where the EMA cross is the trigger).

Thought's are appreciated. Wanted to provide an example of a trigger for a trade. We can discuss defining risk management on this type trade in the comment's if interested.
Algokid PRO
4 years ago
Hi

Thank for sharing this . How would manager such a trade ? would you keep this trade open for multiple days or close it at 4 pm ? Thanks again
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MainStInvesting PRO Algokid
4 years ago
Considering the pop was extremely large (I couldn't have "known" we'd pop this hard), because of my style and personal trade guideline's, I'd trim half my position within the first 30 minute's of the open. I'll come back to this...

With everything lined up as it did, my trigger would have likely gotten me in at around 131.80 or so. At that entry, I'd set my stop at about 131.30 which was just above the low of the day, just in case the trade fizzled.

About 30 minutes later, we popped up almost 1 point from my would be entry, so I'd trail the stop up to my break even. Just before the close in the last 5 minutes, seeing we are holding the level's, I'd set my stop up at 132.50, hopefully preserving some gain's in case overnight action got ugly. If we gap way down past my stop in the morning, well that is a risk I'll take given the strength of the close.

Because it didn't get ugly, and we went soaring, I'd cut my position in half, to lock in a nice gain (again, this is preference, but my personal rule's demand selling "something" on 1% up days or better - 1% up in the major indices - that could just be trimming slightly or an entire position, but selling is something I work on just as often as buying).

With what I have left in this position, I'd set the stop up to the 34 EMA (and trail it up throughout the day) and let it ride. This provide's some protection for locking in solid gain's in case the open is faded all day, but more important, it doesn't cut it off too soon, allowing backing and filling throughout the day. From my experience when the 34 EMA is taken out on the 5 minute, it is tough to take it back, so for me, it's the best stop.

Since it's end of month, end of week, and we had one hell of a rally, I'd be liquidating the position right about now. On other day's I may keep it open, but it just depends.

I know that is a "would have" scenario, but this is a part of my strategy that I've executed in the past, some with success, some with failure, but risk management is key. More are becoming successful as I stick to my rule's without making "exceptions" - it's always tempting to bend your own rules, but be strict with yourself. Also, selling "something" of a winner is healthy - yea it may still run, but profits are profits.

Hope that wasn't too long winded... I'll post some more setup's and hopefully I can get a few up as they are occurring. I'm often in analysis mode without thinking of "publishing" at the time. Haha
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Algokid PRO MainStInvesting
4 years ago
Thanks for the detailed answer. Solid strategy you have there. Have a great weekend . :)
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nmike MOD
4 years ago
good analysis, similar idea> https://www.tradingview.com/e/iZJheQ1i/
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MainStInvesting PRO nmike
4 years ago
That look's similar to a modification of the "Williams Alligator", just different set's of MA's. Also like the 50 length on the %R indicator. I use 30 mostly, but I may slow it even more.

Very similar trigger entry and everything. Because your chart time was shorter, it'd trigger an entry about .15 lower than where mine would. All in the style of the trader - good stuff nmike.
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nmike MOD
4 years ago
actually those averages are a modification of the DARRYL GUPPY MULTIPLE MOVING AVERAGES,they work very well on indexes and ETF,s
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MainStInvesting PRO nmike
4 years ago
Gotcha. Found his website and seems like something I'll enjoy learning about. Thanks
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Algokid PRO MainStInvesting
4 years ago
Do they work on Multiple time frames ?
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nmike MOD
4 years ago
here is the SPY weekly using the modified DARRYL GUPPY MMA.
https://www.tradingview.com/e/iZJheQ1i/
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Algokid PRO
4 years ago
Cool, thank you for the info, have a great weekend Main, and a longer one Nmike (Canada Day ! YAY !). :)
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nmike MOD
4 years ago
Thanks ALGO,have a good weekend everyone.
https://www.tradingview.com/e/iZJheQ1i/
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