Four-Hour Power Bars
POSTED: May 7, 2017
Not the edible kind; the making money trading kind.
There is a certain trading luxury to using four-hour (240 minute) price bars. It deemphasizes precise (“Drop whatever you’re doing and trade now”) timing, creating a less stressful environment for entering/exiting trades. In addition, these trades only have to be checked once or twice a day while still having excellent risk:reward ratios.
I don’t see a lot of 4-hour trading systems, not like the plethora of hourly or daily based systems out these days. There is a need and this hybrid shorter-term/intermediate-term system, and this one fills the void. It is surprisingly robust, option friendly trend identification methodology that works across the board for name recognition stocks that tend to be crowd favorites, or crowd discards, as per the mood swings of prolific option traders of the shorter-term trading community; amateurs, professionals, or any of the incarnations in-between.
TSLA – Let’s see how the Four-Hour Power Bar works
TSLA Option Strategy Analysis
Upon signal, buy a “near-the-money 3-month option”. It will cost around $25 ($2,500) depending on how close to the money it is.
From the signals shown on the TSLA chart:
(1) The first trade was a Buy on December 13, 2016 @ $200.38. The March $200 calls were at about $25 and rose to be worth over $60 when the trade was ultimately reversed on February 23rd. That is about a 140% gain from only a 30% gain in the underlying TSLA shares.
(2) The second trade was the February Sell at $259.91. At that time the May $260 Put at about $25. This trade reversed in just 3 weeks, from Feb 23rd to Mar 15th. Although the shares moved a little higher, about $2, the options took a small hit, about -15%.
(3) The third trade was a Buy on March 15th @ $257.03. The Jun $260 Callsbought at about $25 at the time of the Buy rose with the stock to be worth over $50 when the trade ended on May 4th. On a 15% move in TSLA shares those at-the-money 3-month options doubled.
Other Four-Hour Charts
Four-Hour (240 minutes) are not mainstream trading bars, although looking at these charts you have to wonder why. Nonetheless, they are now a part our Blue Line Prime Trading Service. Since we have just this weekend introduced 4-hour trading, we can’t take credit for the results shown, but those are real signals from a real trend algorithm we have been using on shorter intraday time frames for seven years.
If you want to see our basket of 4-hour trading models in action, try the service on us for free for 2 weeks and see for yourself how the system unfolds in real time with real money.
Free Two Week Trial
Take Profits On MBLY
POSTED: March 13, 2017
The MBLY call option in the Intermediate Term portfolio has hit it’s 100% profit level..and then some: +767%
Special Update: Revisiting Nanoviricides (NNVC)
POSTED: March 13, 2017
Nanoviricides NNVC was one of my greatest stock triumphs, buying and recommending shares at $0.10 in 2005 and riding it to $3.75 in less then a year back over 10 years ago (prices pre-split). It was back in my free blog days and well before the advent of AllanTrends.com and Blue Line Trading. NNVC has also had a dark side, sinking from a post-split $11 to its current price of $1.15. But “confirmatory analysis,” says it may be time to have some hope, or maybe even buy some stock.
Confirmatory analysis combines fundamental with technicals to seek out higher confidence trades. When both are lining up with the same message there is a better shot at being right, i.e., something good is happening at both the company and on the price chart.
The best source of fundamental information about the company is not what some pundit writes on an Internet forum, but what the company files with the SEC. This was filed a month ago and for all NNVC current or potential new investors, it is must reading:
NanoViricides Files Quarterly Report for Period Ending 2016-12-31
A few excerpts:
*The Company said it has focused its work on studies needed for moving the shingles topical treatment towards human clinical trials stage as rapidly as it can. The Company is performing the Chemistry, Manufacture and Controls (CMC) studies needed for filing an Investigational Drug Application (IND) with the US FDA or equivalent application(s) in other countries including Australia, for the shingles drug candidate.
*There is no effective treatment for shingles and the shingles related PHN (post-herpetic neuralgia).
*There is no topical treatment for shingles. We believe this is an unmet medical need. The market size for a successful topical treatment for shingles could be in the billion dollar range.
*The Company has established additional collaborations towards IND-enabling development of drug candidates against the four HerpeCide program indications listed above. We now have collaboration agreements with the CORL at the University of Wisconsin, and the Campbell Lab at the University of Pittsburgh, for the evaluation of its nanoviricides® drug candidates in models of ocular herpesvirus and adenovirus infections. TransPharm Preclinical Solutions, a CRO, will continue to perform testing of our anti-herpes drug candidates in dermal infection models. In addition, we have a collaboration with Professor Moffat Lab at SUNY-UMC to study our drug candidates against shingles.
If you read those online forums you will find some very agitated and aggressive whiners who never owned the stock, will never own the stock, and whose presence on those boards in inexplicable, other than being part of a cabal of short-sellers. Their biggest gripe seems to be that when the company is finally successful the insiders will make a boatload of money. I wouldn’t mind riding on the tail of that whirlwind.
Below is a 10-year chart of weekly price bars. I’ve added the high and low prices along the way. The pattern of steep price moves in both directions is an opportunistic one, so long as your time frame is measured in months/years and not days. Price seems to bottom out and then take off higher with a six month or so spike. There is no “best”way evident to catch these rallies, but a couple of ideas come to mind: (1) begin dollar cost averaging anytime the stock drops into the 1.00-1.50 range (2) use our trend algorithm to monitor good times to get in as price begins its ascent on either the weekly or daily time frames. I’ll keep on eye on the latter, and it is currently Long on the intermediate term (stop at 1.05) and Short in the weekly time frame (Buy above 1.55).
There is no guarantee that NNVC will not go lower from here before turning back up, nor is there even a guarantee it will turn back up at all. This is where the Q4 report comes in. They look to be zeroing in on an anti-viral for shingles, and the ability to bring it through human testing and market without having to share the revenues/profits with any big pharmaceutical collaborator. Is this reason enough to buy the stock? What about reason enough combined with the technical pattern which if it is still operative suggests a spike up coming, possibly it already has started with the stock up almost 10% today.
There have been a lot of investors who have gotten burned buying NNVC at much higher levels. It’s not likely any of those will be persuaded to buy back in anytime soon, confirmatory analysis or not. But there are also a lot of folks who bought NNVC based on my advocacy over the past 10 years and who still hold it. Confirmatory analysis says it is at minimum a HOLD, if not an outright BUY for aggressive and patient investors who have at least a 12-24 month time horizon and who see what I see in both the fundamentals and technicals at the current price level.
A ten-year term chart with our trend following algorithm:
An intermediate term chart (daily price bars) looking like support is strong at about $1.00:
Stock Options: Are You Winning Or Losing?
POSTED: February 24, 2017
“There are only two results possible when trading stock options: Winning or Losing”
That kind of linear thinking is the rue of many a failed option trader. Open your right brain and consider losses simply an evil, but unavoidable consequence of a successful option trading system.
In option trading it is much easier to lose than win (the voice of experience), making it imperative that losses are kept to a minimum and that the size of the winners be larger than the size of losers. Run the numbers and understand that it’s not about losing versus winning, it’s about winning large on the trades you do win.
WIN BIG & LOSE SMALL
By accepting that losing trades happen, that they are a part of the whole of option trading, you can then craft your strategies to win big and lose small.
Last year my intermediate term option trading of seven trading models had 47 trades. More than half of them, 24, ended up losing money and of those losers, 15 of them, that’s just about 1/3 of the total number of trades, were stopped out at my “no questions asked” stop of 50%.
What kind of option trading method can lose 50% on 1/3 of its trades and still finish 12 months with an average win per trade of +58%?
What has the system done lately?
Here is the list of trades being held in real time in this trading portfolio over President’s Day Weekend 2017:
When I am teaching new option traders and in particular those individuals who sincerely want to graduate to “trading for a living” status, my favorite three words are: DO THE MATH. So many are focused on the next market crash or small cap takeover or the next big social media IPO, they forget how grammar school arithmetic is the most efficient and at times eloquent tool at your disposal when trading options.
Any stock that trends well lends itself to trading options. Those in the table above are among the very best trending stocks in the current market environment. About half of their trends abort and generate losses of varying size, including the aforementioned 50% option losses. But those trends that do go on, and on, and on, produce sizable returns in the underlying share price and at the same time in the intermediate term options that track the price of the stock, sometimes with as much as 10X the leverage.
Now the Sales Pitch: Everything has a price, it’s the law of
“There ain’t no such thing as a free lunch.”
Special Pricing: Blue Line Trading Service
List of actual real time trades 2016-2017