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S&P Trading strategy
By Rob | June 26, 2008
” All empires run out of money eventually due to military expenses and unhealthy politics. When this happens, watch out and walk out on the streets. Your future and the future of your children is at risk! Do you understand that the average American can no longer afford a trip to Europe, house or good education? Do you understand that the administration we voted in power is incapable of managing our country and had failed its people?”
Rob Ivanoff, (from a private conversation with Trader Mike)
I am really psyched to report that i completed the interview with Dennis Gartman and will publish it here this weekend. In the meanwhile this is from Nick, who shared his trading system with Don Worden:
“I put the S&P 500 chart in the center of the various monitors I watch. Once the S&P opens, I look for long day-trades if it stays above the open and short day-trades if it stays below the open. I do not look for swing trades until the S&P goes above yesterday’s high or below yesterday’s low. Once it goes above yesterday’s high I am looking for swing trades long, and if it goes below yesterday’s low, I am looking for swing trades short. I never lose sight of yesterday’s high and low. If it breaks the high I am out of all my shorts and going long; if it breaks yesterdays low, I am out of all my longs and looking for shorts. It’s that simple. I never ever have large losses and I am always trading with the S&P. When the S&P is bouncing between yesterday’s high and low, I am just day-trading. My large gains come on swing trades when I play the 3-5 day swings that the S&P likes to take up and down. I have found that the S&P likes to swing on those Fibonacci vibrations (3.5 and occasionally 8). When we have had 3-5 days down and lower lows, I am looking for a change in direction. As soon as we get a break up through the previous day’s high, I am looking for swing trades long. As long as we continue making daily highs, I am long. The reverse applies to swings down and shorting. On all daily swings of the S&P I am looking for Fibonacci levels on these swings for possible turning points. I break the previous day’s range of the S&P into quadrants so I know exactly where I am at. On the 3-5 day swings, I have all the Fibonacci levels marked off.
I read and watch all the financial news. but I have learned that the news combined with my ego is the kiss of death. As soon as I think I know what the market is going to do, I am setting myself up for big losses. I watch the S&P and ignore everything else. It is my total focus. I follow it and nothing else. It sounds so simple and yet it is never wrong. In the 90’s, I traded big momentum tech stocks with lots of ego and knowledge; I made 8 fortunes. From 2000 until 2002 I traded with tons of information and a big ego and lost 7 and 1/2 fortunes. Now I trade with no ego and I discount all my knowledge. I only watch the S&P 500 and it tells me all.
The market is headed higher and higher until it is headed lower. Nothing else in the world means anything. Just focus on yesterdays high and low and the most recent swing highs and lows. Trade accordingly. You will be humble, wise and rich. ”
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June 27th, 2008 at 7:03 pm
Hello Rob,
I came across your very interesting website while researching what might be being said about :Sir 8-Fortunes and the S&P strategy (Worden Notes 6-24-08) which I also found quite intriguing. What do you suppose “Nick” uses as a stop loss when swing trading the S&P as he describes? If you have time sometime, there have been a couple of other recent Worden Notes strategies I would like to have your opinion on. Email if you get a chance.
Thanks
Phil
pjersyk@yahoo.com