14 March 2021

Every Simple Trade Starts Here

Read the whole post for a low risk trade idea worth 15% or so in the short term. 

Of the thousands of trades I've taken over the years, every one has started the EXACT same way.  There was a chance that it would be a winner... and a chance that it would lose me money.

That's how your trades work too.  At the moment of entry, it might work... and it might fail.

With that knowledge as a backdrop I'd like to share an idea I've been noodling about all weekend...

But first, have a look at an idea that I posted way back in 2019.  The world hadn't yet heard of Covid... at least not what was to come.  But there was worldwide consternation about the relationship between the US and China at the time.  That gave me the idea of looking for stocks that were down as a result of the noise.

Fortunately, my former employer was happy to oblige as seen here.

Fast forward a mere 2 years and the result is quite interesting.

That would have been quite the portfolio.

At any rate, the idea I've been thinking about all weekend is this... Old-line stocks have been outperforming technology as reflected by the Nasdaq 100 all year.

A pretty safe trade would be shorting banks via the ETF XLF and buying technology via QQQ [and if you're aggressive, TQQQ].

As you can see, the historical relationship is pretty clear.

And the performance divergence since the beginning of the year is pretty clear as well.

All the 2 sectors need to do is resume their longstanding relationship, the gap closes and you can pick up 15% or so for your trouble.

A little more "fancy" than the trades I normally mention here, but I saw it so I thought I'd mention it.

Hope it helps...


You Might Also Like:

No comments:

Post a Comment

My Most Popular Posts

TAOST Topics

How To Trade Emotional Capital simple trading Simple Day Trading futures trading swing trading Emini Trading How It Works stalk candidate trade idea Bitcoin Daily Simple Trading Habit TAOST market update support and resistance trading intraday Process price action simple trading tools what to buy what to trade Best Retirement Investments Chart Patterns Focus New Trader Sins Swing Trade TAOST Trading principles day trading lifestyle how to day trade keep it simple risk risk management trends Are you too old Confidence FAQ FASTQ How To Invest Income streams It takes as long as it takes MAR Retirement Crisis Retirement Investment Retirement Trading TAOST Power Zones TAOST Price Clusters Trade Pattern Trading & Poker day in the life of a day trader how to trade Bitcoin learn to trade performance improvement sell signal side hustle the power of simple trading psychology trading rules trend persistence ultimate side hustle Buy Signal Charts To Watch Coil Distraction How To Trade EUR How to trade SPCE Mistakes Oh S#!t Gap Oil Optimization Process Ownership Portfolio Trade Private Equity Professional Gap Retirement 911 Risk Arbitrage S&P 500 Sacrifice Shooting Star TAOST Price Structure Trading Components Trading Myths Value Why You're Only 1 Setup Away chaos theory compounding context diversification downtrend extra money financial freedom how much money how to information is the stock market random kis linear regression channel lock limit down meditate money money management negative compounding optimize thinking pandemic position size prediction quantum leap improvement random random market update risk management plan sector selloff simple day trading risk management simple day trading strategy that works stock broker trading secrets training trend analysis