China Devaluing Your Emotions? Learn Exodus Strategies

Let me start off by wishing everyone a Happy New Year. I’ve been out of commission (extra brokerage house) for the past couple weeks due to a minor outpatient surgical operation, but I’m feeling country strong.

As many of you know, Fly had very generously laid out to you his plan to use OS signals in Exodus and hold for a 10 day period as his sole trading strategy for 2016.

The purpose of this piece is to show how almost anyone looking to make money on a widely available and liquid asset class will increase their chances of success through Exodus.

Please note this up front; I’m not being compensated by Dr. Fly nor anyone else involved at iBC to write what some of you may pessimistically believe to be a full on advertisement and/or testimonial.

Before I get into the strategies and tools, the absolute #1 reason why Exodus will improve your returns is quite simple: it will takes away, if not at the very least reduce (depending on how big of mental case you are), emotions out of trading and investing.  Raise your hand if these four days have been emotional for you (sheepishly raises hand).

Emotions can occasionally produce outsized gains, but more often than not, they will lead you to larger blowups and drawdowns. And here’s another dirty little secret: everyone has them, from a multibillion dollar hedge fund manager to the hero trading his four figure account. One of the most vital keys to success for either of these two is controlling their emotions.

Any actively managed account should have some sort of short term trading strategy. My reasoning is that this is the designated area for taking out those funds and spending the cash. It’s a good reminder to take money so that you get a tangible sense of your end goals.

Like statistics, any chart can be manipulated to certain extent. Exodus provides Technical scores, which helps the trader remove any biases. Hybrid scores, which combines fundamental metrics with the aforementioned technical data, are generated as well.

Beyond the hard numbers, one of the most unique and valuable features for the Adderall taking, Snapchat curating, give me the answer right now I can’t even populace is the visual aspects and outputs that the developers stressed. You can make a very quick decision in an informed manner. Rarely do you get these two traits together.

With all of that being said, here are potential strategies different types of traders and investors.

Short-term trade for an individual equity

Many traders will use charts, trend lines, support, resistance, volume bars, and technical indicators such as RSI, ATR, and Bollinger Bands. While I respect and admire this type of analysis, the Technical score provides a comprehensive indicator to analyze the stock’s technicals.

Price targets are key in short-term trading; set them up based on the Oversold and Overbought Signal.

If you’re unfamiliar with this, the algorithm flashes OS or OB for 3 mo, 6 mo, 12 mo, and historical time sets. It will display the average returns for multiple holding periods (1, 3, 5, 7, 10 days) and the times the return result was positive and negative (this is where understanding the odds plays a huge role).

Example: You want to trade $AMBA. It flashes OS on the 12 mo algorithm at a price of $50. For a 5 day holding period, the Avg Return is 5%. And times up vs. times down is 10 vs. 3 (so up 77% of the time).

Based on this, you can set your price target based on a return ($52.5) or holding period (5 days) or a combo of both.

My preference is to trade ETFs (big ups to$ XIV) using OB and OS because the non-systematic risk (i.e., individual stock risk) is eliminated, which improves confidence levels and mitigates scared hands. I also look for win rates of 80% or above; that way the mathematics support me going in big on certain trades.

Trading options

The same OS and OB tools and stats can be used for calls and puts. Many members have mentioned using it trade general options, weeklies (think 5 day), YOLOs (shout out to Option Addict).

However, one of my favorite strategies, especially when I’m holding a ton of cash on the sidelines is to sell puts on stocks that have hit OS and have very high win rates. The number of contracts I sell are dependent on the win rate.

If it’s a stock I wouldn’t mind owning and is hit because of general market conditions, non-company factors, and isn’t industry sensitive (think oil stocks here), I sell slightly below the money for a higher premium. If it’s a stock I don’t want to own, a high win rate is necessary but sell deeper in the money.

Using the OS signal and buying weekly calls have also produced wins for me as well.

Long term investor

If you’re someone who wants to focus more on the fundamentals and valuation metrics, Exodus is ideal. Rapidly compare revenue, profit, debt, ROA, ROI, etc. from one company vs. competition.

Also, you get the Price/Book, Price/Earnings, and Price/Sales ratios for the company, and medians for the sector, industry, and general market for comparison and valuation capabilities.

Lastly, the most intangibly valuable characteristic is the community of members. We learn and teach successful trading and investing strategies, ask questions, absorb unique market knowledge, and get confirmation when we hit that proverbial wall.

This is the toughest game in the world because everyone can play, from the sophisticated pros to the newbies. I mean, you can’t stroll into Rucker Park and play pick up with Steph Curry and Kevin Durant.

Take trading and investing extremely seriously, and dish out a little capital. Used correctly, it’ll pay for itself in one or two trades. Otherwise, just like the past four days, this time due to China, you’ll get dunked on (extra Yao Ming).

If you enjoy the content at iBankCoin, please follow us on Twitter