This is a deep dive into the concepts surrounding "Risk Management" and how to realistically model managing risk.
We will discuss:
Scaling in to positions at a one third risk unit increments
Closing/exiting the position.
PineScript allows you to define a single custom source value for an input to another indicator or strategy.
Here we will demonstrate how you can have a very simple strategy that attempts to respond to that signal. The simplest way to do this is that he signal (indicator) emits the number of desired shares.
Coding a strategy that will work in the real world isn't easy, and we should have our expectations set accordingly.
In this video we will cover:
Human trade execution.
What is an "Ideal Strategy"?
Alerts aren't always tradable events.
Please leave any questions in the comment section.
In my experience there are phases to creating a strategy. In this episode we will cover one of the most important steps: establishing an exit strategy. Exiting a position is crucial to risk management. If your entries are terrible but you have a good exit strategy, you might get by and not lose a lot of your capital. And vice-versa, if your entries are great, but...
Here's a chart I put together that illustrates what the big players are experiencing with Real Estate.
Larger firms trade the sector and if you were to be a 'buyer' since COVID, you would join a pool of others that the average participant is now losing money.
The trend is clear and it very well will likely keep going south while the Fed continues to raise rates.
With the electrification trade in play, we should see copper continuing to rise. But it's getting close to breaking below it's daily SuperTrend and if it goes below 4.0, the bears might be back.
Lithium looks like it might also be struggling. If lithium is a huge part of the electrification trade, and it starts to fail... Where there's smoke there's fire?
TLT 's pattern of higher highs and higher lows seems very obvious. But as a wise man said, "if it's obvious, it's obviously wrong."
So will we see another trap/shake-out occur before it keeps going?
Or will this be where TLT pulls back further while the market resumes bullishness.
What do you think?
I appreciate Michael A. Gayed's thesis here, but the more I look deeper (and longer term) at the data, it's really difficult to draw an real signal.
Too many instances where it's not clear which influences which and more likely the market itself (SPX) is influencing lumber and gold independently after the fact of the market move.
When you look closely you can see...