1) You mention that you look at 21/50/200 EMAs - are they all weekly, or do you look at daily EMAs as well? If the latter, when do you look at W and when at D?
2) Do you always wait for a W50 retest before opening a position? Or do you open at breakout and then size up at the retest? Sometimes the retest may come much higher or not come at all.
Core positions are always weekly, swings are daily. I usually look at all of them if only to see the strength in the moves and have an idea of what buyers want - to adapt myself as well. They just have different usage.
No not necessarily. I want for a stock to be above its W50 90% of the time but I can buy a breakout, a retest or a trend. I bought SEDG above its W50 on a breakout retest for example. It's just important to focus and buy right. Better to be patient, miss one or two opportunities but go big on a perfect one, than precipitate and buy lots at any levels and end up with not so perfect positions.
Thanks - one follow-up. How do you assess/quantify whether the stock is above its W50 90% of the time? Over what timeframe? Does that mean that when the stock closes below W50 you don’t automatically sell and see whether it goes back above? How many sessions do you usually wait with stock below W50 before exiting?
No I meant 90% of the assets I look at and buy are above their W50. This is a buy condition for me, but sometimes some assets are very interesting even below it.
As for closing, yes. On core positions I do not have a hard stop loss, I adapt. If a stock loses its W50 AND its lower low then I close it, but if it only loses its W50 for a few days I won't. Stocks like Nebius went below their W50 for like three days but closed the week above. I'd need at least one weekly close below current low + W50 to close entirely a core position.
Yes, core positions require a bit more following up, you don't want to close a key position just because of one day's volatility due to macro for example. Swings are binary.
Great summary. Thanks for sharing! Don't kick yourself too much for not following your system. Sometimes it needs to be done to find faults in the system or to validate the system. I didn't follow my system for HOOD or PLTR and am very happy I didn't!
Great article - thank you! A few questions:
1) You mention that you look at 21/50/200 EMAs - are they all weekly, or do you look at daily EMAs as well? If the latter, when do you look at W and when at D?
2) Do you always wait for a W50 retest before opening a position? Or do you open at breakout and then size up at the retest? Sometimes the retest may come much higher or not come at all.
Core positions are always weekly, swings are daily. I usually look at all of them if only to see the strength in the moves and have an idea of what buyers want - to adapt myself as well. They just have different usage.
No not necessarily. I want for a stock to be above its W50 90% of the time but I can buy a breakout, a retest or a trend. I bought SEDG above its W50 on a breakout retest for example. It's just important to focus and buy right. Better to be patient, miss one or two opportunities but go big on a perfect one, than precipitate and buy lots at any levels and end up with not so perfect positions.
Thanks - one follow-up. How do you assess/quantify whether the stock is above its W50 90% of the time? Over what timeframe? Does that mean that when the stock closes below W50 you don’t automatically sell and see whether it goes back above? How many sessions do you usually wait with stock below W50 before exiting?
No I meant 90% of the assets I look at and buy are above their W50. This is a buy condition for me, but sometimes some assets are very interesting even below it.
As for closing, yes. On core positions I do not have a hard stop loss, I adapt. If a stock loses its W50 AND its lower low then I close it, but if it only loses its W50 for a few days I won't. Stocks like Nebius went below their W50 for like three days but closed the week above. I'd need at least one weekly close below current low + W50 to close entirely a core position.
Ok, thanks, very informative. Seems it’s not only science but also some “art” (i.e. judgment based on experience).
Yes, core positions require a bit more following up, you don't want to close a key position just because of one day's volatility due to macro for example. Swings are binary.
Great summary. Thanks for sharing! Don't kick yourself too much for not following your system. Sometimes it needs to be done to find faults in the system or to validate the system. I didn't follow my system for HOOD or PLTR and am very happy I didn't!
It's also true, sometimes need to try things!