Entering decisions

Good morning,

A friend of mine asked me yesterday regarding my entering decisions for some of the stocks KUTE system selected. He asked if these stocks gapped up on opening and that the candlestick formation is on Friday’s close, how should we be planning when and which price to enter to buy. Do note that KUTE only select stocks that are good fundamentally, weekly cycle trends are bullish and weekly candle stick formations with "buy" or "wait/hold" signals.

First let me clarify that I do not trade every night after I placed my trades for the selected stocks when market opens on Monday, unless 2 situations happen; either my position is squared (i.e. closed at profit) or the price dips below Friday’s close, and in this instance I will buy (dollar cost averaging) even if I am still holding on to my positions. Since the stocks selected are fundamentally good companies, I will hold till it is in-the-money and I will only close the position if it achieved my target.

If the weekly cycle trend and candle formation are positive on Friday close and if the daily candle indicates wait or hold for next confirmation, the decision should be to buy the next day when market opens if the next period candle confirms the formation or to place a buy order at 0.3% of the previous close once the market is open for trading. It's quite arbitraging because for a stock that normally appreciates 1 to 1.5% a day on the average, 30% of the percentage increase is my price to enter. DO REMEMBER THAT I DO IT ONLY IF WEEKLY CYCLE IS BULLISH AND WEEKLY CANDLE ARE EITHER BULLISH OR WAIT/HOLD SIGNAL, AND DAILY IS A WAIT OR HOLD. I may not get hit at 0.3% if it gapped up and it's ok. However, if daily candle is a buy signal, I will just enter at open. If the daily candle is bearish, I will just stay aside and wait for it to drop below the Friday's close, if only both the cycle and candle for the week are positive. Assuming my position is closed on Tuesday after it hit my expected returns; I will analysis the intra-week weekly and daily candlesticks and the weekly cycle trend again, and apply the same decisions as mentioned. For my students, these intra-day candle signals can be found in the web sites I suggested. Abiding by these rules is often challenging. Sometimes profitable trades can be missed and there will be emotional moments where orders are placed without any reference to the rules and most of the time these trades may ended in losses. If the intention is to trade the stock market as long as your career, it will be wise to stick to rules as over time, the profits can be more consistent.

NOV was up again last night, gaining 0.97% to close at $44.73. TDW was up 1.47% to close at $45.41, NE gained 1.15% to close at $41.48 and DOX closed $27.22, up 0.22%. FCN was the only recommended stock that closed lower at $46.07, down 0.24%.

Have a great day ahead!

Francies Cheng
BBus MAppliedFinance