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Edges from Seasonality - Planning Trades Ahead of Time

swing trading trading strategies Mar 02, 2021
Edges from Seasonality - Planning Trades Ahead of Time

The following is supplemental to The Last Half-Hour of Power Show on Feb. 26 by Premarket Prep, which you can watch below:

 

Framework

Since Seasonality Data is known ahead of time:

  • Develop a list of strategic symbols
  • Watch for a discount (symbols underperforming the SPY or appropriate ETF)
  • You have choices
    • Swing Trade naked
    • Swing Trade hedged with SPY or appropriate ETF
    • Develop a basket of Longs vs a basket of Shorts
  • The goals:
    • Your Longs have a positive expectation naked
    • Your Longs have a positive expectation relative to your Shorts
    • Look for Discount to enter on (don’t be chasing stuff up)

 

 

Summary

  • You can curate lists ahead of time; even line up the ducks of various signals
  • Plan when the market is closed
    • Set Parameters
      • Position Sizing
      • Hedges if desired
      • Attractive levels or discount to enter
        • IF-THEN
          • Let Market come to you
          • What does your downside look like?
  • Consider what is scalable and can be repeated on all signals and event types
  • Imagine having a list of 10 symbols that are all adequately hedged by the
    SPY and have the Odds of outperforming SPY

 

 

Closing Thoughts

  • Please study the Friday discount on these stocks and ETFs
  • There was an opportunity to trade from a discount to Thursday’s close
  • There was the opportunity to take the trade by placing a Market on Close Buy on Fridays Close (this gives you Friday’s final Day Session Close)
  • Full hedging, partial hedging or no hedging is the traders choice
  • The focus is that positive expectation for each trade
  • Live in the probabilities
  • Seasonality is a powerful forces
  • You can curate your lists well ahead of these events
  • Be informed with data...otherwise its just opinions

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