Jake Bernstein Trading Webinar

Transcription

1 Jake Bernstein Trading Webinar Session 1 of 3 Concepts, Process, Timing, Examples 1 April by Jake Bernstein jake@trade-futures.com *

2 Disclaimer and Risk Disclosure The information provided here is presented for educational purposes. Past performance is not indicative of future results. There is a risk of loss in all trading and investing. There is no guarantee that recommendations or suggestions provided herein will result in profits or that they will not result in losses. Consider your own risk tolerance in all trading and investing decisions. (c)

3 Cycles the mysterious forces that trigger events E R Dewey Cycle: a repetitive pattern in a data series usually, but not always time based you don t need a weatherman to know which way the wind blows Bob Dylan (c)

4 Topics The importance of intermediate and long-term investing How investing differs markedly from trading Why investing is easier than trading and produces more profit Specific investing methods, timing and triggers How to allocate your investment dollars Intermediate-term seasonal trades Using LEAP options as an investment vehicle How to avoid exiting too soon (c)

5 Trailing stops to ride the big moves Behavioral issues that inhibit success Winning procedures and rules Real-Time examples Trades initiated and followed through week by week Cycles as a primary investment decision-making tool Three 100% rule-based investment timing strategies (c)

6 My goals To be clear and specific To give real and concise examples To teach you things that you can use to make money To avoid creating dependency To help you maximize your trading skills To share my knowledge and experience of 50 years (c)

7 Long-term versus short-term A few real trades and real examples You can work smart or you can work hard You can make small profits with large positions to compensate for the size Or you can trade small positions for large profits taking advantage of the big moves Or you can do both: they are not mutually exclusive. Here are some examples from one of my accounts (c)

8 Long term vs. short term (c)

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11 Why? (c)

12 Working definitions For the purposes of this webinar I will define the terms as follows, knowing that nothing is written in stone Short-term less than 30 days Intermediate-term 30 days to one year Long-term one year or more Please note other than day trade which is selfexplanatory all other definitions are for you, the trader or investor to decide I can only tell you what s right for me and what works for me because market conditions can, do, and will change over time (c)

13 Overview / Issues Why intermediate and long-term? Why now? Big money is in the big move Big moves take time how big is big? Long AAPL 114 in 2014 still long % Stability of indicators IT, LT, ST Completely mechanical versus process Rule-based but decisions necessary Long-term: easier, less effort, more $ (c)

14 The process Elements of intermediate and long-term decision-making process Cycles and patterns Large trader actions (COT) Small trader sentiment Timing triggers Targets and risk Several procedures (c)

15 Set up trigger follow through Setups are found using patterns and cycles Cycles are validated with historical data Correlation with large trader positions Timing must confirm cycle There are three major timing triggers we use No trigger equals no trade Follow through consists of profit targets and risk (c)

16 Stocks, futures, ETF s, leaps Similarities and differences Correlations between futures and stocks Finding a proxy Monthly, weekly, daily data The process is not perfect In the sessions we will learn by using actual current examples Session 1: overview and examples (c)

17 Session 2 How to find the patterns and cycles How to determine large trader positions and what they mean How to find the confluence in our setups Evaluating the timing triggers Examples and illustrations (c)

18 Session 3 The actual process of getting in and out Stops and trailing stops Adding to and closing out positions Finding new opportunities Which markets or sectors are next The difference between major highs and major lows: procedures Additional noteworthy findings (c)

19 How we will do this The boring way: I lecture you The enjoyable way: I show you specific situations and engage you to participate in the process of discovery The advantage: you learn by doing Please participate in the process to derive the maximum learning from what we re doing You have no risk of loss today (c)

20 A few more important points My best profits have been made in the long-term and intermediate-term LT and IT have taken the least amount of my time and they have been the most enjoyable My indicators are more stable and work better in longer-term situations. Why? Work hard will work smart or both (c)

21 Let s begin with an example Two years ago I gave a forecast for the Mexican peso versus US dollar Forecast was based on the factors I will teach you in this webinar series The forecast was that peso would make a major low against the US dollar and rally strongly for an extended period of time The news and Donald Trump were completely opposite from my forecast. (c)

22 What was I looking at? I will now give you details of what I was looking at, why I was looking at it, how I was looking at it, and what I did I believe that by following the process of my methodology in this and many other examples you will learn how to do it on your own The process is not perfect, we won t always be right but we will always be logical and processbased (c)

23 Above all Remember This is not short-term stuff We have a longer-term timeframe There is no immediate timing pressure To capture the bigger moves you will need to take bigger risk At times it will take several attempts to get positioned We will go through all these alternatives (c)

24 The cycles Let s begin with the cycles Understand that in this particular case there is a limited amount of futures history We can only work with what we have and accept the statistical limitations of our data If this was always perfect and always easy everyone would be doing it but they re not! Follow my process (c)

25 The cycles: peso/usd (c)

26 EWW Mexico ETF (c)

27 EWW Weekly (c)

28 Peso futures (c)

29 Peso futures weekly (c)

30 Finding a proxy: why? (c)

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40 Company Description Fomento Economico Mexicano SAB de CV engages in the production, distribution and marketing of beverages. It produces, markets, sells, and distributes Coca-Cola trademark beverages, including sparkling beverages, such as colas and flavored sparkling beverages; waters; and still beverages, such as juice drinks, coffee, teas, milk, value-added dairy products, and isotonic drinks. The company also operates a chain of small-format stores under the OXXO brand name in Mexico, as well as operates other smallformat stores, which include soft discount stores with a focus on perishables and liquor stores. It Also offers various logistics and vehicle maintenance services; and vertical and horizontal commercial refrigerators for the soft drink, beer, and food industries. The company has operations in Mexico, Central America, Colombia, Venezuela, Brazil, Argentina, Costa Rica, Guatemala, Nicaragua, Panama, and the Philippines. Fomento Economico Mexicano was founded by Isaac Garza, José Calderón, José A. Muguerza, Francisco G. Sada, and Joseph M. Schnaider in 1890 and is headquartered in Monterrey, Mexico. (c)

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42 Example 2 Now let s take a look at another example this time with considerably more history and data. I have blacked out the name of the market to avoid any prejudice I will ask for your participation (c)

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50 Why use cycles? Cycles basics and logic Cycles can help capture the giant moves Cycles as a setup: many very accurate Cycles: triggers several triggers Cycles: many date back years Cycles: abuses and misunderstanding Easy to find and well documented Approx 24 trading day cycle S&P futures (c)

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55 What a cycle is and what it is not Why do cycles exist and are they for real? Cycles in ALL MAJOR markets The major economic cycles The great economists and their cycles work The business cycle The real estate cycle The Kondratieff Cycle How to find cycles the fast and easy way (next week) Long term, intermediate and short term cycles Cycles in spreads and ratios (c)

56 Combining cycles for best results Cycles as a SETUP tool in the Setup-Trigger and Follow-through model Intraday cycles: fact or fantasy? My best cycles for traders and investors Seasonal cycles intermediate term (next) Cycles help me to consistently and correctly forecast big moves (c)

57 Important points in my use of cycles Used as a setup Need timing triggers Best for long term and intermediate term Also excellent forecasting tool I do not combine cycles Cycle lows more predictable Use to identify time periods of a turn Excellent for ETFs as proxy for futures COT + Cycles = very powerful (c)

58 A little history (c)

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63 Cycle waiting for trigger (c)

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68 Brief excursion If you want to know more about cycles I suggest the following (c)

69 Joseph A. Schumpeter [ ] Économiste autrichien classique, professeur à l'université de Harvard, aux États-Unis, à partir de 1932, (1939) BUSINESS CYCLES A Theoretical, Historical and Statistical Analysis of the Capitalist Process (c)

70 Major cycles yr Kondratieff economic cycle 9-11 yr Schumpeter Intermediate term business cycle 3-4 yrs Juglar cycle 9-10 yrs Beveridge 9-10 yrs Benner 9-10 yrs economic 5-7 yr grains and10, 14) Many more: E R Dewey Let s look at a few (c)

71 Schumpeter 10 yr cycles (1930 s) (c)

72 Juglar: 1860 s Credit Cycles 7-11 yrs most 9-10 yrs - Kuznets (c)

73 Kitchin business cycle mo and harmonic (c)

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78 The Real Estate Cycle USA 2020 (c)

79 Cycles + Timing = Profits (c)

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81 In the trading / investing world cycles are a setup they provide an expectation that needs a trigger and risk management as well as profit maximization Intermediate and long term cycles work best Cycle lows are easier to forecast than cycle highs why? Cycles are not symmetrical (c)

82 Process Determine your time frame Find the cycle Project the turn Go to timing trigger (which ones) Use trigger and profit max strategy COT EXAMPLES (c)

83 Intro: intermediate term seasonals in stocks (c)

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88 Mentoring appointment interview I can be reached at or me if you have questions: jake@trade-futures.com Best of trading Jake Bernstein * (c)