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Trade Ideas

Strategy concepts, ideas to explore, and potential improvements.

DOTM LEAPS Strategy

Position Trade + LEAPS

Trade idea: When Matt says he is going into position trade at DTL; then perhaps it's a good time to buy long dated LEAPS and far OTM at super cheap price.

Michael Burry's PLTR Trade

Michael Burry video insight: He said media calculates his 100 stocks from one option and multiplies with current actual stock price and says short position is 1 billion. Idiots, they should multiply with option price not stock price.

Anyways he says he bought PLTR 50 strike 2 year LEAP puts when PLTR was near 190-200. For 2 dollars and 10 million dollars of total cost.

I thought it was interesting to see how he is buying long dated far OTM puts. Perhaps such things are inefficiently priced by the Black-Scholes equation or options pricing.

Research Resources

DOTM Performance

Above articles give examples how when stocks broke their long term bases and ran 70-100%, 6-8 months far OTM calls went up like 1000%.

Dave Wyse's Multi-Timeframe Momentum

The Setup

He has an interesting setup with: - Current timeframe momentum - Multi timeframe momentum (1 day and 15 min combination)

Entry Logic

  1. See if higher timeframe is already bullish
  2. Wait for current one to turn bullish from existing bearish
  3. Then enter

Exit

Exit is on HA doji candle.

Additional Checks

  • Be aware of any existing resistance levels like VWAP, 15 EMA on 5min chart
  • Check other obvious S&R levels
  • He also has another indicator which calculates RS w.r.t. SPY or QQQ or whatever index that ticker follows

Core Philosophy

His main logic is that when momentum is high it implies institutions are buying it. And his idea is that institutions make a buy and then just sit quiet for retail to buy little bit by little bit.

His idea is to best find these moments where retail step in and buy.

This is similar to FVG in Lux Algo? Maybe, maybe not.

Matt's Freedom on Winners

Giving Winners Room

Now I understand why Matt says exit on 9 day sharply is not required sometimes on a stock that has been running like his GEV trade. He gives it more freedom to sometimes come down a bit below 9 even for swing trade.

This is how he makes outsized returns.

HA Candles Usage Pattern

  • Use X on daily chart for entry
  • Use doji on daily chart with HA for exit
  • Apply same pattern for 5 min chart

Bear Market Detection

Monthly charts of IWM, SPY are fantastic along with all my indicators to study if we topped the market and will start a bear market.

Reference: https://www.reddit.com/r/RealDayTrading/s/a22ftK4TLo

Richard Moglen's Approach

Richard Moglen uses something called Relative Measured Volatility... and also has a relative strength indicator (I think it's close to my 50 NRSI with 20 day signal line).

https://www.youtube.com/watch?v=qlRunaELLLs

Stock Cycle Analysis

Historical Burst Study

Study the historical bursts of a stock: like how many days it will burst up and how many days it will take rest. This is to get an idea of the cyclical nature of that stock.

TradingEdge Subscription

Tradingedge guy is really good at picking stock names. I made good money by entering his stocks like HOOD and telling myself to stay long like position trade.

Should probably subscribe back to him after a few months.

Qullamaggie Breakout Trading

Selling Method (Backtested)

Backtested Over 500 Breakouts

Selling method is very similar to what Qullamaggie teaches. I did a backtest of over 500 breakouts and found my own selling method that nets me more profits over the long run.

It is a dynamic strategy since the selling method I use depends on how much the stock is up (R value) in the first 3-4 days.

Jack Corsellis on YouTube has a similar strategy and goes over his selling strategies.

If you backtest the way stocks move AFTER they breakout, you will have conviction in your exit/profit taking strategy.

Reference: https://www.reddit.com/r/qullamaggie/comments/uly0bp/any_really_successful_traders_using_kqs_methods/

When to Buy Breakouts

Common Problems

Problem A: If I pre-scan and have a bunch of candidates, often a breakout will occur but not confirmed by above-average volume.

Problem B: I will see an above-average-volume breakout on a "hotlist" (real-time intraday scan) but the breakout will already be well along and often retrace quite a bit.

Solution: 15-Minute Candles

Use 15m candles for entry, and wait for the 2nd green candle above the breakout line before entering. This helped a lot when it came to buying breakouts.

Reference: https://www.reddit.com/r/qullamaggie/comments/1atslqt/comment/kqzcli7/

KK's Key Tips

Finding the Right Setups

KK would just say "Read the directions on the screen". But here are more helpful tips:

The preferred setup (high tight flag) occurs 100x a day. The other key components needed are:

  1. High ADR (5+)
  2. Key sector - Don't care if a software stock is breaking out when oil is hot, or vice versa
  3. Is it a true breakout? Or just opening range high, or some other factor making it appear to breakout?
  4. Have you identified the setup before it breaks out? Put in the research ahead of time, set alerts

Sector Research

If shipping sector is heating up, look at EVERY SINGLE shipping related stock and mark alerts on all potential setups. There are hundreds/thousands. Same for oil, same for EV related, same for any sector.

After you have done all that research, your purchase will still shake you out 7 of 10 times. Also follow the buy and sell rules by heart.

You, me, Buffet, Cramer and KK are not smarter than the sell rules.

Reference: https://www.reddit.com/r/qullamaggie/comments/uly0bp/comment/i7zm0t7/

LEDS May 2021: The Perfect Setup

Picture Perfect Breakout (Qullamaggie)

LEDS May 2021 - Q says it's the perfect image. This is your role model breakout:

  1. Makes a HUGE move on big volume - more than triples
  2. Pulls back, finds support around the 10 and 20
  3. Goes sideways and tightens up
  4. Then breaks out on volume again from this tight range
  5. First base breakout

You don't need to trade 10 different tickers a day, find the super star ones and that's all you need. This is a super star, the model one, this is what you need to try and find.

Interpretation

I wonder if this happens when institutional investors come into the game and pump up a stock like this. Sounds like a perfect way to win along with the sharks.

Reference: https://medium.com/@billyonaire__/i-didnt-ask-for-permission-kristjan-kullam%C3%A4gi-mock-interview-fb3c51509c23

EP Setup on TC2000

Qullamaggie EP (Episodic Pivot) scan settings for TC2000:

Reference: https://www.reddit.com/r/qullamaggie/comments/u766ol/qullamaggie_ep_scan_settings/

Higher Lows Concept

Understanding higher lows for trend identification.

Reference: https://www.youtube.com/watch?v=4zNCXnftcKw