Anticipation Process and Research

DT (first list) (MDT second

ADMS
RLYP
CSIQ
SWHC
CYTK
RVNC



ADMS
CSIQ
CRAY
NTGR
ACOR
SPWR
ZEN
SWHC
NTWK
VRA
CYTK
AXON
UTEK

Process & Research

Date		Notes	Momentum Driver		Grade
DT
	ADMS	18,873,279.00	Recent positive data on phase 3, drug
	RLYP	42,198,230.00	Biotech, take over rumours
	CSIQ	56,281,915.00	Solar stocks rally
	SWHC	54,804,789.00	Guns, 25% eps sup. analyst upgrades	Demo of power, consolidation	A-
	CYTK	38,699,419.00
	RVNC	27,951,598.00	19% earnings suprise	Clear DT trendline, if breaks, but has not had a multi day power rally since early last year	c
MDT
	ADMS	18,873,279.00	Recent positive data on phase 3, drug
	CSIQ	56,281,915.00	Solar stocks rally, 192% eps suprise
	CRAY	40,949,005.00	Prior EPS beat and demonstration of powr	Longer base, Will need An additional momo driver and volume to be worth a trade
	NTGR	31,738,113.00	Good EPS 26% suprise,	Base is getting long, Range bound?	B+
	ACOR	43,376,018.00	191% EPS, Biotech, Seizure migrane drug
	SPWR	137,267,614.00
	ZEN	89,099,018.00	16% eps suprise, (but beg. nov.)		B
	SWHC	54,804,789.00
	NTWK	10,360,871.00	Small float, Recent $100 mill Contract		A
	VRA	37,932,100.00	EPS beat, but coming from period of weak eps.	Prior anti, attempt had no follow through	B+
	CYTK	38,699,419.00	Prior demonstration of pwr,		B
	AXON	98,741,738.00	20	First pause after rally out of 2 month base, concern that it took 2 months to breakout out of last base?	B
	UTEK	26,312,909.00	-6% eps suprise		B

Anticipation Week 4

First Cut MDT /DT

EDUC
GBIM
ADMP
CYTK
PRTA
ENZ
LXRX
HA
NVRO
RARE
NTGR
SWHC
AMZN
HSII
IMGN
ROCK
IMPV
FSB
EDU
FPRX
OLED
NBBC
BNFT

Anticipation T1 / 65
Symbols from TC2000
NTWK
GHDX
SEDG
TNDM
SPWH
ALRM
ATHM
DEST
LXRX
AKBA
HSII
AVGO
PRTA
ITC
ROCK
NTRA
OLED
IMGN
RGR
BNFT
LXFT
ARII
MPWR
OA
SWHC
CPSI
LFUS
ADSK
RXDX
FNSR
ESL
AVAV
OSIS
GDDY
HWAY
IMMU
JD
BLOX
AIN
BABA
VRSN
GOOG
ITCI
NOW
NTGR
PRAH
EPAY
NOAH
NVRO
JAH
NUAN
SBH
AMZN
RATE
ADTN
AMWD
HA
NVAX
AGRO
VRA
NFLX
ENZ
CYTK
COLL
SCTY

Anticipation Week 3

TI 65 First Cut  -  (have not checked merger/buyouts yet)
JRJC
SONC
ANFI
HMSY
AVAV
GTS
AMPH
NUAN
MCD
IPXL
ORBK
ALRM
RGS
CACC
CTRP
PODD
MPWR
BBCN
FSS
NHTC
TTS
WD
AMWD
IDTI
ATHN
AVGO
MXL
MFLX

Week 2 -- First Cut

MDT:




TI 65


TXMD  (EP, Rank High)
FNGN
MXL
NKTR
INTC
AMWD
IMMU
NTGR
CYNO
NOAH
TOWR
PACB
ACRX
HII
LPTN
GSV
EPAY
NLST
IPGP
ORBC
EBS
CLX
ROCK
NCMI
SRI
SMTC
HWAY

DLTR

NETE
IMDZ
LOXO
WB
NEWM
DRNA
RXDX
TEDU
FIVN
ADRO
GDDY
LILAK
FCB
BLOX
BCOV
ANFI
TTS
FPRX
SCAI

ECOM
LMAT
EXAR
ABCO
IMOS
HA
MNST
STRL
FRED
GVA
NCTY
SA
LRCX
CASY
DPS
BRC
TAP
GTS
VSH
RTN
TER
MTD
EDU
LYTS
RGS

SECOND CUT:
TXMD,FNGN,INTC,NTGR,CYNO,NOAH,TOWR,PACB,ACRX,HII,NLST,IPGP,EBS,CLX,ROCK,SMTC,DLTR,LOXO,WB,DRNA,TEDU,GDDY,LILAK,BLOX,ANFI,FPRX,LMAT,EXAR,HA,MNST,STRL,FRED,GVA,NCTY,SA,DPS,BRC,TAP,VSH,RTN,TER,RGS

Final CUT
TXMD,INTC,NTGR,CYNO,NOAH,TOWR,PACB,ACRX,HII,NLST,IPGP,EBS,ROCK,LOXO,WB,DRNA,TEDU,GDDY,LILAK,BLOX,ANFI,FPRX,HA,MNST,STRL,FRED,GVA,NCTY,SA,BRC,TAP,RGS

TXMD ep

Minervini Trend:

TOUR -- stopped out this week,  but weekly breaking out.  18 price tgt.
STMP -- Weekly chart -- Building base
CUBE
PSA
MTN
STRL
EDU ( nice daily, weekly extended)
AMWD -- Two week Flag

Focused Swing Trade Group: Entry Assessment

On Friday GLOB was my top idea and it triggered and worked.

The assessment I need to consider is whether I was too late to enter. 35.56
I had planned to enter on a break of 35.50 based on hourly resistance points:

Although I felt pretty good about my trade plan (and this is still a profitable trade), after watching the weekend video regarding entering stocks early, I'm questioning my entry.   Should I have used the 5min?

Although in hindsight I can see some range breakout of consolidation towards the end of the day on Thursday.  I don't think that was a realistic entry with the markets down large, do I want to be buying into the close on a stock that was still down on the day?

On the opening surge?   Many days the ranges of both the upside and down side are tested with in the first 5-15 minutes as there is a move and a counter attack.  I struggle with this candle as it is so susceptible to false moves.    Perhaps I'm worrying too much over .20

TI 65 Anticipation list

For the Focused Swingtrading group, here is my video diary of the process I'm using.  This is for me to improve by recording the process so that I can learn from reviewing my thought process and  the mistakes I make along the way. 

TI 65
Process video:

I re-reviewed  my TI 65 analysis and made deeper cuts

ARII,AWAY,BIDU,CLLS,CRAY,CTRP,EBIX,ECOM,GIMO,HSII,IOSP,LDL,LVLT,PEGA,POWR, SMP, TRIP, TTS, XLRN

MDT/ DT
SHOR,HSII,NAII,FSB,CRAY,EBIX,XLRN,PACB,CSTM,LSCC,LYTS


Initial cut:

ACAS
AEGN
AIN
AIRM
ALNY
ARII
AVAV
AVD
AWAY
AYI
BABY
BCOV
BIDU
BRC
BREW
BSMX
BZUN
CCOI
CHFC
CLLS
COR
CPRT
CRAY
CSTE
CTRP
CYNO
DHX
DY
EBIX
ECOM
EDU
EGHT
ESL
ETM
FCB
GIMO
GNCMA
GTN
HSII
HUB.B
IMGN
IMOS
INWK
IOSP
IPGP
ITRI
IVC
JEC
JKHY
KS
LDL
LFUS
LOCK
LSCC
LTS
LVLT
LXRX
LYTS
MANT
MATW
MATX
MKTX
MN
MNRO
MPWR
NEO
NVRO
OLN
PACB
PCL
PCRX
PEGA
POWR
PSMT
QDEL
ROP
RTN
SCL
SIX
SMP
SREV
SRPT
SSTK
STKL
TBI
TCAP
TOUR
TRIP
TTS
TYPE
UFPI
UIHC
VMI
WD
WUBA
XLRN
YNDX


And the CUT:
Symbols from TC2000
ACAS
ARII
AVD
AWAY
BIDU
BRC
BREW
BZUN
CLLS
CRAY
CTRP
CYNO
EBIX
ECOM
GIMO
GNCMA
HSII
HUB.B
IMOS
IOSP
LDL
LOCK
LVLT
LYTS
PEGA
POWR
RTN
SMP
SRPT
TOUR
TRIP
TTS
UFPI
UIHC
WUBA
XLRN






MDT / DT   First cut

BRSS

BECN

BZC

SHOR

HSII

ULBI

NAII

FSB

CRAY

EBIX

XLRN

PACB

CSTM

LSCC


LYTS

TGS

Fundamental Based Scans

I'm going to be working on including some fundamental component into my trading and scanning.


The starting point has to be CANSLIM I will be using on a future project for "O'Neil" type stocks.

FOOLISH 8  M
The original Foolish 8 strategy uses eight criteria to look for profitable and rapidly growing small companies with strong price momentum. The methodology is partly built on the premise that the lack of coverage and interest in small-cap companies presents a better opportunity to locate undiscovered, attractive investment candidates.

1. Revenues: $500 million or less
2. Earnings and sales growth: 25% or greater
3. Net profit margin: 7% or greater
4. Daily dollar volume: $1 million-$25 million
5. Insider holdings: 10% or greater
6. Share price: $7 or greater
7. Relative strength: 90 or greater
8. Operating cash flow: a positive number

Here's how I created it in TC2K:

New Slingshot Anticipation Scan

A friend of mine has shown me the value of using Rate of Change to identify compression points in a stock.  We talked about combining a Slingshot in the current bar with a ROC of +/- 2 in the preceding bar.  He personally also conditions a ROC of >15 in the prior 21 bars but since my coding knowledge is more limited, I went after the concept it in a slightly different way by using  a weekly RSI > 51 for now.  I'll likely experiment some more, but I like what I see from this scan so far.

As I'm very encouraged by what It has produced, I've decided to share the scan.

Criteria:

Price = personal preference

Liquidity is true = minv3.1 >=55000   -- Personal preference

Slingshot =  c > xavgh4 and c1 < xavgh4.1 and c2 < xavgh4.2 and c3 < xavgh4.3

ROC (my work around TC2k Limitations) = ((C1/c6)-1) *100

Wilder RSI > 51 weekly -- Self explanatory, but subject to experimentation. 

Results: 11/27/15:

Fishing Season

Tis the season when low float stocks fly.   The Fishhook Setup works great for catching big moves in these types of stocks.

Here's one that triggered today:

Use the consolidation areas on an hourly for stops.

Slingshot Setup Described

Here's the main setup I've been using lately.  It is a range breakout following a pullback in power stocks.   

Thrust--

I'm working on refining the trigger for my slingshot setup.  If I combine the setup with my "Thurst" indicator:  -- a 4EMA of the HIGHS -- --- This setup is to target a reversal of a shallow pull back.  I would consider any new thrust as anything more that 4 pull back bars.

NOTE: I do not keep my charts this messy ... this is for illustrative purposes only.

I'm encouraged with what I see:

Slingshot setup

Here's a video of the setup I've been using successfully 

Mark Minevrini Notes

Mark Minevrini


SEPA

1. Identify Trend template

2. Fundamental Scan-- growth  Sales / margins, relative strength

3.  Leadership

4. Manual Review




Influenced by Weinstein

1. Every super stock starts big performance in stage 2. 

Avoid buying stage 1 no matter how good the fundamentals may be.

Stage 1 characteristics:

•  -- price oscillates around 40 week / 200 dma 
• Can last years

Goal is not to buy cheapest price-- its to buy the right price-- we want stocks that move quickly after you buy them.

Transition from 1 to 2:
Stage 2 will show volume--- should always be a rally of 25-30% before you conclude Stage 2 has begun. 

Transition Criteria 
Series of higher lows,  above 150 and 200 ema
Weekly Charts
Large volume spikes on up weeks
in contrast to low volume pull backs.

Stage 2 Characteristics:
>40Week  and 40 week ema in uptrend
Staircase pattern-- clear uptrend

Stage 2/ 3 transition -- VOLATILITY increases
Major price break on volume
200 DMA flattens


Stage 4: capitulation -- 
price breaks

Conclusion-- Big money is identifying when stage 2 begins

Ride the waves
Within a trend (tide) there will be short term oscillation (waves)
There can be basing 5-25 weeks in a stage 2

Base count-- should stair case up  a stage 2, stock typically has 3 to 5 bases.
You want to get in when institutional money is getting in.

When the leader sneezes the industry catches a cold


Look for contraction areas:

Al Brooks Price action Trading course

A friend shared me this video on price action trading.

Most things work 40-60% of the time.  There is no holy grail.

5% of the time market is in a strong breakout,  no decision trade in the direction of the trend.

In 5% clear trend. -- Ascertain direction and get in quickly.  Buy close of bull bars- pull backs.


95% not in a pure trend-- both bulls and bears can make money.

Initial risk,  every trader has initial risk that is different.

Actual risk.--- number of ticks needed to not take a loss on that trade.

Target needs to be as big as risk.

When probability not in trend.  need 2x risk.

Wider stop = smaller size.

A lot of profit at 1 x 2 times risk. Computer driven.

• Take partial profits at min equation as of 2x actual risk. 

• There is a profitable way to manage both short and long

Assume institutions are profitable.  Always an institutional seller and buyer.  In general there is balance.

• Market spends most of the time at point of the control.

PROBABLILTY IS THE SOURCE OF ALL EMOTION OF TRADER

• Makes beginners not entry too early or too late
• Reward should be at least equal to risk.
• if uncertain 40-50% of the time--- need 2x risk. 
• Institutions can enter profitably on any tick on the day.  They have a profitable strategy and employ it. 
• Hedge in other markets
• Our edge is to trade setups.  Always near support or resistance.   Risk is small-- buying on support or probability is high. 
• Profits disappear quickly..  take at least 1/2  at profit target. 

Buying breakout --- there's an institution betting on failure of breakout. 

Trading only profitable market structures. 

Short at the bottom of a trading range should not be fighting with 2 sided trading. 

2 Week Rest Rule

One of Mauthe's criteria is that a new breakout must rest for 2 weeks before re-breaking out.  Here's an example of this "rule" in action:

Weekly:

Hourly Breakout

Nice break out of congestion over last 2 days. Could be a runner

Look for Relative Strength,

The first to the top after bearish action, are the first to pop

Earnings Markup

From Stewart's public chart list, will watch for some pre-earnings moves to begin

Don't Get Fooled by The Affiliates

It's difficult to be a new to the market and learning how to navigate the sharks in addition to learning the market.

So you go on twitter or stock twits trying to learn and see everyone is talking about how great a trader Tim Sykes is, or Super Traders, or the Investors underground.  You are immediately amazed by the gains they claim to be making.  So you do some search reviews and you see a bunch of glowing reviews for the service all with links to that source.    The services are not cheap, but if they make you a millionaire so what.  Then you try the service and your experience is nothing like the reviews and you quickly blow out.

Here's why that occurs:-- Affiliate programs. For example, Profitly, which several of  these "Gurus" use to market their services rely on affiliate marketing. According to the terms:

In other words, if you sign up to a service the affiliate gets 30% or more. That is a huge incentive to sell you a shit sandwich and tell you its great.  And people are doing it to scam you.

Here's just one website, I found My Super Advertures in Stock Trading  that appears to be nothing more than a platform for affiliate marketing.  But according to him, he's learned all the secrets of penny stock trading from Tim Sykes and Supertrades.

In short, whenever you see reviews that are too glowing, or bargaining about gains that seem large be skeptical.  There are worthwhile services out there, but you shouldn't be committing a large portion of our equity on services.

Also, while I'm on my rant, top traders rarely not talk their trades in dollar amounts, They talk about gains in terms of % of equity and % of risk. So If you see someone on twitter brag about a gain and have something to sell:

Remember it means nothing without context.

How big is the account? What % of equity was risked on the trade?  Of course, posting < % Equity gains isn't likely to grab the readers' attention.

Be skeptical, define your own setups, and trade your own trades.

Stay safe out there,
 Scot1and

Guppy Charts

Guppy charts are an interesting way of viewing the market.  To create the charts you plot shorter Ems 3,5,8,10,12, 15 and longer EMAs in a different color 30, 35, 40, 45, 50, 60...   The profit zones live in the the "white" area of the chart where the slower EMAs have left white space over the longer periods.

It is a useful exercise to look at weekly guppies on breadth charts.  The advance / decline line is clearly becoming bearish.  Although not there yet... this is not a a place where you want to stage a fight against the market trends.

The Dow Guppy has already created bearish white space

But the nasdaq remains in the thick of the fight between bulls and bears:

Summary
Trading is treacherous here and likely to break to the down side, but bears may be early as the Nasdaq remains in the thick of the fight.

VXX DRIP

When the market sells off quickly, traders get excited and rush into VXX, UVXY, and other volatility instruments. I'm holding XIV as a long term trade.  I have to make a confession.  I'm getting crushed on this trade. 

 Despite getting crushed in the short term, I have little concern that this will be a tremendously profitable trade. History shows long volatility to be a losing proposition long term.

(Chart per P.O.P. Stephen Stewart's public chart list)

The reason I  have absolute confidence in this trade despite the instant surrounding is that I did it in 2011.  I shorted VXX on Aug 9, 2011 at 32,  I shorted again on 8/19/11 at 42.

Ignore the VXX split adjustments.  My 2011 trade looked liked this:  Short term pain, long term gain.

The risk I take in doing this trade is not so much financial, it is the risk that my violations of every trading rule I have becomes a habit.

Why is it that nearly every top trader got their ass handed to them at early points in their career. 

"I’ve lost my entire net worth several times over the years getting caught up in stock and/or market crashes."  -- Jesse Stine

Dr. Wish Notes

My trading style of buying breakouts in momentum stocks  has been a highwire act. It requires heightened risk management because I expect that many of my trades will fail.  I'm wondering  if there might not be a better way. That affords more margin of error.

A friend of mine keyed me on to Dr. Wish and gave me some links to review.  I took some notes for my weekend research.  It re-emphasised for me the importance of the broad market.   As good as I have been over periods, I frequently have been trading against the grain of the broad market.

Here is the video  I watched, http://videos.worden.com/webinars/HAL-PC_DrWish_12112012/HAL-PC_DrWish_12112012.html …  and my notes from the video:
Key points:

• Buy stocks making new highs -- Darvas
• Stay out of a bear market. Do not go against the Grain. 
• Weinstein Stages 
• 30 week average cross stage 2
• Only be in a stage 2 stock long -- Stage 4 for shorts 
• The importance of stage analysis is crucial.  Buy only stage 2 and short only stage 4.
• O'Neil CANSLIM
• M - Market indexes 3/4 stocks follow market trends
• Be on the right side of market averages
• There is a time to be out of the market
• Cup with handle
• It is a base in a stock that has already launched at least 30%
• 7 weeks
• Livermore -- Buy going up. " I never buy too cheap or too easily."
• Never average against a losing position. 
• Pyramid up 
• If a position fails. sell it
• if it gives another signal-- re-buy it often an initial failed trade an lead to big gains if it re-sets.

Guidelines for buying growth stocks

• Market must be in an uptrend
• GMI must be buy
• IBD market pulse
• "IBD is very good you don't want to go against them"
• other?s
• Stockbee Market monitor
• Great fundamentals -- IBD 50 
• new highs--- stocks up 100% from a year -- MDT
• Weinstein --
• Stage 2 -above 30 week.
• multi-month base
• MACD rising
• Stoch rebound from oversold
• 10 > 30 week > avg.
• price > 30 ma or close
• Exit -
• - below 30 week avg
• tops never lowered only raised
• tighten stop -- stop if GMI < 4 or TI2109 > 80-85% 
• sell if doesn't act like it is expected
• stops entry every trade as if it failed
• know where it failed 
• know what you are going to do. 
• Key to market -- preserve capital
• start with pilot buy
• buy up, never down
• options to hedge positions 

General Market Trend

• GMI
• Available at Wishingwealth.com
• Put /  Call Ratio
• if above 1-- people too bearish bounce likely 
• T1208  --% stocks > 40 ma. 
• Yearly if single digits -- start pilot buys in indexes and add as it goes up. 
• weekly 80 tops  -- < 20 bottoms
• Market Trend Checklist
• Warning-- when leading stocks break down-- its a leading indicator for the market
•  measured by % of stocks that  hit new highs 10 days ago that are higher now.

SCANS:
Darvas- -  TC2000

• percent of 52 Week high 90 -100
• EPS % change last quarter > 50
• c-30wkma >.01
• c/minlow250 >1.8
• Price > 30
• 4wkgt 10wkgt 30wktg = true

Results. I put the scan together and it produced one good stock.  However, due the Market conditions--O'Neil's "M", no stocks should be bought at this time.

 good fundamentals / Good technical Scan

• new high 250 days
• Return on equity > 14
• % change of rev last qtr >0
• price >20
• volume 20,000
• eps change last qtr >25

Results:  I ran this scan and came up with only 1 stock. Even without the price and volume requirements.  Likely because the market sold off so heavily there are no stocks making new highs.

Timing purchase

• 10.4.4 stochs
• MACD
• 30 day avg
• volume
• multiple time frames

Oversold and then cross 30 day avg buy signal

Other tool for buying stocks
look for cross of 10 week over 30 week.

• Green line charts
• Monthly - above 5 month average -- new monthly highs
• Yellow Line
• Now uses Guppy "Red white and blue" charts.

!!The same setup that works in an up trending market will fail in a downtrending market!!

More videos and Webinars 

http://www.

Doctor's Orders:  worden.com/Webinars/08_24_2010 …

Goal is to catch a trend and ride it till it ends.

• Manage risk / Trade smart 

• General Market is key -- 
• if you know the overall trend you have half the battle won
• 70-80% stocks follow general market
• In a downtrend do not try to find the needle in the haystack.
• GMI/ GMRR
• Gets out of market < 4.
• In a good market stocks that hit new stops should keep going
• want to see 100 new highs
• IBD Mutual fund index   9currently bearish
• 
  

T2108  -- lowest every 1987 crash -- below 10 look for market bottoms.

• 80% tops out.
• Tracks every day
• MACD -- Nasdaq 100 stocks > MACD signal line. 

Stan Weinstein's stage analysis

longs only worth to own stocks in Stage 2

Only time worth shorting is Stage 4. 

• Sell stage 2 as 30 MA  starts to flat --- *Scot1and note, how about using MAMA to ascertain flattening?
• Consider guppy charts. 

• Win the easy ones
• When market is in stage 2 -- it easy to make money on longs
• if its not clearly in stage 2 it is better to be out of the market. 
• 
  

Submarine Scan -- stocks to short

http://videos.worden.com/webinars/DrEricWish041310.html …

Trading With SK

There's a contingent of loud mouths on Twitter that look to short every parabolic move. It works well, until it doesn't and they get run over.  That method has great winning percentages but risk blowing out an account in 15 minutes if their wrong.

Then there's the guys that know that it is far better to prey on the weak. The pack of wolves doesn't go after the strongest buffalo .. they hunt the weak.

My Friend SK (feel free to follow him on twitter)  goes after the weakest stocks.  The dude prints money.   And  he's not trying to sell anything. No memberships, DVDs handbooks, he's giving away his advice.  He has been very generous of his time and his secretes.  I must admit due to my schedule and a full time job - I can't keep up with his pace. That said, I've adapted many of his techniques for my swing trading.

He put a video together a video describing his method in detail, check it out.

Creating Scans from Indicators

Let's say you want to scan for a bearish Wilder RSI of < 30.   A very common question that I've gotten is how to create a scan for an indicator in TC2000.  The good news is that is very easy and you do not have to create a PCF or know any coding to pull off this feat.

Here's a quick video of how its done:

Trading without a plan

Here's what emotional trading  looks like. 

Introducing the Slingshot

Over the weekend, I spent some productive time working out a new power setup with a couple of my
trader friends.  We are fondly calling this setup the  "Slingshot."

This setup takes a stock that recently had a power move and has stretched back under the EMA 4 --- but not too far-- The EMA 9 should be the limit.  When it gets pulled back through the green side of the EMA 4 it has accumulated power and is ready to go.

The great thing about this setup is that it gets you in power stocks sooner, with tighter stops then waiting for a breakout.


Here's a perfect example: EFOI gets stretched through the 4 to the 9.  I picked it up at 13.24 as it came back through.

How did it do?  Only about 40% in the next 2 days.

TREE:

Aftermath: +20pt move and counting

SPNS:

EVHC:

Under the surface:

I'm a big fan of hourly charts. The weekly gives you the trend. The daily gives you the landscape, but it is the hourly that gives you the entry.

That said, I can get jumpy and I did this morning in ALJ.  It retook the 4 and broke the hourly downtrend channel in the first inning of today.  So I took a position. It was stuffed and I took a stop.

I'd be far better off waiting for 2 hour bars for confirmation.

Done correctly:

Follow through:

After the Slingshot shoots, the EMA 4 should never be breached on a close.  Consider it the trailing stop on the position.  Of course, take profits on the way up.

After I presented, this post I had a follow up question as to how this differs from the Fishhook.  There are two significant differences.

First, is the timing.  The Fishhook was designed for Week 1 moves.   Power move rest two days and boom!

The second is the trigger point.  The fishhook buys on confirmation when the first day high is taken out.  The Slingshot buys lower when the 4EMA is reclaimed.  (but again consult the shorter timeframe such as the hourly-- we want to see a break of the downtrend channel)

Short Scan Video-- How to do it

Here's how I've been setting up my Short Scans and a brief look on how I would find candidates to short:

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Draw down table.

These stats are popular in trading publications but they are worth repeating:  A 5 loss is easy to overcome, a 10% loss can be overcome.  After that, things look pretty dark.

Drawdown	Gain to Recover
5 Percent	5.3% Gain
10 Percent	11.1% Gain
15 Percent	17.6% Gain
20 Percent	25% Gain
25 Percent	33% Gain
30 Percent	42.9% Gain
40 Percent	66.7% Gain
50 Percent	100% Gain
60 Percent	150% Gain
75 Percent	300% Gain
90 Percent	900% Gain

You Can't Time the Market.

We've heard forever from the that you can't time the market. I used to think that was nonsense. After all, isn't that what successful traders are doing every day. But I've been doing some contemplation. I now agree-- we can't time the market.  But that's not to say we can't make money from attempting timing the market.  

I'm sure that sounds like an inconsistent statement.  It's not. 

We can identify asymmetrical risk / reward opportunities and exploit them. Being focused on the R/R and thinking in terms of probabilities has been game changing philosophically for me. These realization has helped me overcome the need to be right. I lost on over 53% of my trades last month yet still achieved over an 8% gain. That wouldn't have happened if I had "confidence" in a trade. I would have held on and suffered a devastating loss as I have at some points in my trading. I guess I came to the realization that, I don't really care if my next trade is a winner so long as I've managed risk. I'm sure that realization is not novel systems traders don't care a bit about one particular trade so long as it fits in their models.  But as discretionary traders, we tend to placed too much importance on being right.   I now see how much that has cost me.  

How many trades would I have executed differently (position sizing, stop levels).  Would I have added to a losing trade, if I went into the trade with the view that it was just as likely to be a loser as a winner. Over the years my worst losses have been in the trades where I've had conviction in the fundamental view or the story behind the stock. ... no more.