Double & Triple Digit Gains Yearly! · ATTS Objectives: Provide a clear & simple trading systems for busy people! So they can become Wise, Profitable and Winning Traders! 1. Active

Double & Triple Digit Gains – Yearly!Active Trend Trading: Dennis W. Wilborn

“Observe things how they are;

See things how they can be!”

Disclaimer

Copyright ATTS 2007-2017

• U.S. Government Required Disclaimer – Commodity Futures Trading Commission Futures

and Options trading has large potential rewards, but also large potential risk. You must be aware

of the risks and be willing to accept them in order to invest in the futures and options markets.

•

Don’t trade with money you can’t afford to lose. This is neither a solicitation nor an offer to

Buy/Sell stocks, futures or options. No representation is being made that any account will or is

likely to achieve profits or losses similar to those discussed in this training. The past performance of

any trading system or methodology is not necessarily indicative of future results.

• CFTC RULE 4.41 – HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN

LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT

REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE

RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN

MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN

GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF

HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY

TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN.

• All Materials presented are for training purposes only . Traders should paper trade any new

method prior to risk of personal capital.

- Founder & Lead Technical Analyst for Active Trend Trading - Certified Candlestick Technician- Affiliate of Market Technician Associations- Guest Speaker on IBD How to Make Money in Stocks Radio Show- Highlighted in the book “How to Make Money in Stocks-Success Stories”- Publish “Art & Science of Active Trend Trading—Trader’s Report” Weekly- Host “How to Make Money Trading Stocks Show” Weekly- Systems Researcher- Former Forbes Contributor

- Retired US Navy, Commander- Civil Engineer- Adjunct Professor MBA Program Chaminade University, Oahu, Hawaii- Started Trading in 1989- Started Trading For a Living in 2006

- Research Colleague Mike Trager, Dallas, Texas

Our Motto: Clarify, Simplify & Multiply

Active Trend Trading YTD Performance

“The plans of the diligent lead to profit as surely as haste leads to poverty!”

Proverbs 21:5

Target = 60% W/L Ratio Yearly @ 65%Target Return for Year 40% Trading $116K Marginable Account

Strategy Return YTD Closed & Open Trades

Strategy I = +7.78%Strategy II = + 43.27%Strategy III = + 130.37%

Total Return = 43.94%

Reality of Trading

1. We all want to trade winners!

2. Searching for winning stocks is very time consuming

3. What we find may or may not be a winner!

4. If I choose from 4 stocks, I choose the one that goes up the least

5. Typically only 2 in 5 IBD stocks reach their 20-25% profit

Even if you have a solid list of growth stocks, how big is the list? The Running List for 2017 is over 190 stocks so far. Do you really have the time to sort through 190 stocks on a daily or weekly basis?

What can we do to hone in on some known winners that tend to repeat their winning ways every year? What are these entities?

I believe for busy part-time and full-time traders having a fallback list of known winners will greatly reduce anxiety & increase the probability of trading success for the patient!


My Double Digit List—Leveraged ETFs

1. A small stable of Top Notch Leverage Bullish & Bearish ETFs

makes up my Double Digit List

2. Things I Prefer:

✓ Seasonality—Does the ETF follow seasonal patterns

✓ Volume: >1M shares per day traded

✓ Weekly Options

✓ Are there multiple yearly moves of 10% or greater?

3. What is my list?

4. What can I expect?


The Challenges of ETFs

1. They are all derivatives of an underlying entity and thus reflect additional variables

2. Being Derivatives of Derivatives: Leveraged ETFs carry a higher level of variables due to daily requirements to achieve a certain daily return compared to the underlying and the requirement to rebalance

3. Leveraged ETFs have personality traits that can cause them to actually loose value even if the underlying increases in value

4. Counteract this trait by selecting solid leveraged ETFs that trade millions of shares per day

5. Counteract this trait by limiting hold period—no more than 60-90 days

6. Counteract this trait by trading Leveraged ETFs that show sound technical patterns

7. Counteract this trait by limiting the number of Leveraged ETFs on the Watch List


Additional Facts

1. Leveraged ETFs seek to return 2x or 3x the Dailymovement of the underlying entity

2. The derivatives held to provide the 2x or 3x daily movement are rebalanced or re-indexed

3. Rebalancing/Re-indexing can lead to slippage in the value of the leveraged ETF

4. This effect can be partially offset by limiting hold time and waiting for a strong trend to start. It is important to take each trade trigger, one never knows which entry = a Strong Trend

5. Being aware of Seasonal Tendencies can also help mitigate this trait


TNA-Daily

55%25 Days

57%23 Days

38%14 Days

Copyright 2007-2017 ATTS

SPX – UPRO – Weekly

60%71 Days 58%

71 Days

33%44 Days


NDX – TQQQ – Weekly

91%73 Days

58%63 Days

53%48 Days


RUT – TNA -Weekly

82%72 Days

74%33 Days


RUT – IWM -Weekly

23.03%72 Days

20.62%33 Days

We Don’t Need no Stinking Stocks!

Thoughts & Questions1. Patience

2. Seasonality

3. Solid Entry/Exit System with Alerts (ATTS)

4. Short Holding Periods

5. Compounding Factor



Compounding Factor Effect

1. Take advantage of the Power of Compounding!

2. What is your Target Compounding Period? Yearly, Quarterly, Monthly

“The plans of the diligent leads to profit as surely as haste leads to poverty!”

~~ Proverbs 21:5

Leveraged Index ETF’s

Only? Part 2: Why’s & How’s

www.activetrendtrading.com

Dennis W. Wilborn, Sr.

[email protected]


~~ Proverbs 21:5

http://www.activetrendtrading.com/

Part II : The Why’s and How's


Summary

1. Directional Bias

2. Designed for short term holding periods – 90 days or less!

3. A heighten Reward-Risk Scenario

4. Technically similar to underlying but not precise


Why’s

1. Simplify research for working members

2. Good Technical Signals

3. No Earning Surprises

4. Trade like a Stock

5. Weekly Options on some provides alternative trading approaches

6. Big Move Potential


How’s

1. Patience, Diligence & Persistence

2. Apply ATTS Rules

3. Review Watch List Daily after the Market Closes

4. Use Weekly, Daily & Intraday Charts

5. Look and Wait for Indicator Extremes, plus divergences for best results

6. Identify which ETF is closest to a buy point

7. Define the triggers

8. Target Shooting OK with appropriate stops and Profit Targets



RUT – TNA - Weekly


RUT – TNA - Daily


RUT – TNA – 1-Hour Intraday

Summary

1. Directional Bias

2. Designed for short term holding periods – 90 days or less!

3. Patience, Diligence & Persistence

4. Apply ATTS Rules

5. Review Watch List Daily after the Market Closes


Bonus Presentation

5 Objective Profit Exits



- Profit Exits can be planned based on

several objective parameters.

- Profit Exit parameters can be used in

combination


- Set Percentage, Fib Extensions, Symmetry

Extensions, Keltner or Moving Average

Extensions

Set Percentage: 5%, 10%, 15%, 20% from

Entry


10 %





combination




Extensions


Entry

Fib Extension






combination




Extensions


Entry

Fib Extension

Symmetry Extension


1

2

Symmetry where 1 ≈ 2





combination




Extensions


Entry

Fib Extension

Symmetry Extension

Keltner or Moving Average Extensions






combination




Extensions

- Pivot High/Low


Uptrend at each place a trailing stop slightly belowa new swing low





combination




Extensions

- Pivot High/Low

- 8 Period Moving Average


Close below the 8 period EMA—or a violationof the low of a close below the 8 period EMA

Entry





combination




Extensions

- Pivot High/Low


- TSI


Cross Down – Take partial profitCross Up - Take price low of that day as new trailing stop





combination




Extensions

- Pivot High/Low


- TSI

- Engulfing Candlesticks


Engulfing Candlesticks: Close

at end of period or next period

on a violation of the low of the

engulfing pattern


- Set Percentage, Fib Extensions, Symmetry Extensions, Keltner or

Moving Average Extensions

- Pivot High/Low


- TSI

- Engulfing Candlesticks

5 Objective Profit Exits - Summary


ATTS Objectives: Provide a clear & simple trading systems for busy people! So they can become Wise, Profitable and Winning Traders!

1. Active Trend Trading Membership: Includes Text and Email Alerts for all 3 ATTS Strategies:

Save $30/month—Regular: $74.99 per month but you save 40%: $44.99/Month

And/Or

2. Early Warning Alerts for Index ETFs: Membership Available after December 1st

For Webinar attendees go here for a special membership offer:

http://activetrendtrading.com/combo-membership-intro/

Leveraged ETFs

Bonus Slides

“Vision is the art of Seeing Things Invisible!”

~~ Jonathan Swift

“People Only See What They are Prepared to See”

~~ Ralph Waldo Emerson


Leveraged Index ETF’s

Only?

www.activetrendtrading.com

Dennis W. Wilborn, Sr.

[email protected]


~~ Proverbs 21:5

http://www.activetrendtrading.com/

Leveraged ETFs

Brief History of ETFs

1993 – SPY

1999 – QQQ

2000 – IWM

2006 – Leveraged & Inverse ETFs

Today over 4,396 ETFs Globally

“Vision is the art of Seeing Things Invisible!”

~~ Jonathan Swift

“People Only See What They are Prepared to See”

~~ Ralph Waldo Emerson



Fallback List

- What to Expect—Gain from their Strengths

- What to Expect—Protection from their weakness

Tracking Indexes

SPXU SPX SPY SPXL or UPRO

SQQQ NDX QQQ TQQQ

TZA RUT IWM TNA

Other Candidates

Oil: SCO UCO

Gold: DUST NUGT

Financials: FAZ FAS

BioTech: LABD LABU

“The plans of the diligent leads to profit…”

Pros:- Highly Liquid

- Seek 2x or 3x the daily move of the underlying Index

- Trades like a stock

- Don’t have to be constantly searching for the next stock to trade

- Seasonality

- Compounding Pros

Cons: - Compounding Cons

- Lose Value over Long Periods due to derivatives traded to achieve 2x or 3x Leverage – Especially with the Inverses

- Does not follow underlying with precision—Similar but not exact! (Trade off the underlying or the non-leveraged ETF)

- Illiquid Options

“The plans of the diligent leads to profit…”


Strengths & Weakness

For Leveraged Index ETFs their Strengths and

Weakness partially one and same

1. Provide a DAILY Return that is a certain multiple of the daily Index Move

• This can amplify losses

2. Derivatives necessary to achieve the double and triple returns can lead to contango/backwardation. Call it leakage

• Occasionally requires backward splits on the Inverse Leveraged ETF

3. Designed for short term trades 90 days or less (especially Inverse ETFs)


Seasonality: Market Timing is based on short-term price patterns and trying to pick market tops and bottoms.

- However, Seasonality is about anticipating how the market will behave in a given time of year and taking a position before the change occurs.

- Seasonality appears in stocks, commodities, nature, etc.

- By understanding the ebbs and flow of Seasonality, traders can better position themselves to take advantage of buying & selling opportunities

Remember: Seasonality reflects a tendency and each year is different—Trade the Charts!


Seasonality—Wait for It!

Market timing

Oil Seasonality

SPX Seasonality

NDX Seasonality

RUT Seasonality

TNA-Daily

55%25 Days

57%23 Days

38%14 Days

Gold Seasonality

NUGT

310%46 Days

150%52 Days

Oil Seasonality

UCO

84%38 Days

Biotech Seasonality

LABU

115%38 Days

Financials Seasonality

FAS

56%30 Days

Bonus Presentation

Daily Compounding


Strengths & Weakness

Daily Compounding Example

To understand the math, consider a hypothetical index that rises 10% one day and falls 10% the next. If you earned exactly the index return in an unleveraged fund, a $100 investment would grow to $110 and then drop to $99, for a cumulative $1 loss. Now take a 2x leveraged fund: A 20% advance would bring you to $120; after a 20% drop, you would be left with $96. Over two days you have lost $4 instead of $1.

Over months and years you can lose money in leveraged ETFs, even with a correct bet on the market's overall direction.

So trade in short thrust



SPX SPY

Charts Similar but Not Exact


SPX UPRO

Charts Similar but Not Exact


Weekly Comparison ChartSPXL-SPX

+105.7% Gain Since Dec 31, 2012

+29.07% Gain Since Dec 31, 2012

-17.52% Drop

-5.8 % Drop


1-4 Split

+3.77% Gain Since Dec 30 2013

-37.58% Loss Since Dec 30 2013

Weekly Comparison ChartSPXU-SPX

Summary

1. Directional Bias

2. Designed for short term holding periods

3. A heighten Reward-Risk Scenario

4. Technically similar to underlying but not precise



Financials - FAS

52%


Oil - UCO

Seasonality

40% + Range


BIB

42% Range


NUGT – Daily: Good Patterns and Strong Moves

Multiple Opportunities334%

154%

141%48%

34%

35% 33%


Financials – FAS – Weekly

46%

73%

39%

23%

43%

60%


Oil – UCO – Weekly

Seasonality

40% + Range


LABU: Weekly

125% Range

113%35 Days

100%14 Days

81%55 Days


NUGT – Good Patterns and Strong Moves

Multiple Opportunities334%

154%

141%48%

34%

35% 33%

TNA-Daily

55%25 Days

57%23 Days

38%14 Days

NUGT

310%46 Days

150%52 Days

UCO

84%38 Days

LABU

115%38 Days

FAS

56%30 Days


SPX – UPRO


NDX - TQQQ


RUT - TNA

Active Trend Trading ETFs

We chose the ETFs based on several criteria including

1. Follows either the SPX, NDX or RUT

2. Follows select Commodities or Industries that demonstrate sound technical patterns and seasonality

3. Trade over a million shares per day

4. Would like each to also provide weekly options (not a requirement)


Active Trend Trading ETFs

1. Index Leveraged ETF’s both Bullish and Bearish (Inverse)

SPX: UPRO and SPXU

NDX: TQQQ and SQQQ

IWM: TNA and TZA

2. Industries or Sectors

Financials – XLF: FAS and FAZ

Biotech – IBB: LABU and LABD

3. Commodities

Oil – UCO and SCO

Gold Miners – GDX: NUGT and DUST


How to Trade the ETFs

1. Define planned exposure: 60% of trading capital equally split into 4 positions (1-2 IBD 50 and 2-4 Leveraged ETFs)

2. Follow sound ATTS entry criteria: support bounces, TSI Upticks, moving average bounce entries (second chance entries)

3. Entry Options: Enter ½ sized position on the first trigger

4. Exit Options: place stop at 5% or 0.25-0.50 below swing low – adjust position size to never loose over 5%. Sell a portion of the position at 10%, make remaining shares breakeven

5. If price action pulls back to a new proper entry action point buy enough shares to make a full position. Use trailing stop based on 5 Objective exit training session


Documents

Double & Triple Digit Gains Yearly! · ATTS Objectives: Provide a clear & simple trading systems for busy people! So they can become Wise, Profitable and Winning Traders! 1. Active