ETFs: Scaling Into Trades For Profits (NYSE:BGZ)
At Active Trading Partners, we believe that nobody can predict exact bottoms nor tops, but we can certainly come close. In light of that belief, we “scale in” to our preferred trade set ups using 1/3 tranches at a time. Using our backdrop of looking for waterfall decline entry points for reversal profits, we add in some Elliott Wave theory and Fibonacci figures to mix up our recipe. As we see a trade set up coming around the bend, we begin to “Scale In” to our trades as each Fibonacci or Wave pattern is reached.
Samples are our recent trade into Direxion Daily Large Cap Bear 3X Shares (NYSE:BGZ), which is 3x short the Russell 1000 Index. The Elliott Patterns we interpreted said the market rally would wane as we hit 1071/1074, 1085, and 1092. As those areas were hit on the SP 500, we would purchase 1/3 positions into (NYSE:BGZ), inevitably profiting from the overbought reversal to the downside in the markets. This reversal happened on cue on Friday last week, July 16th. Our (NYSE:BGZ) position rose 8.5% in just one day of trade, allowing us to enter into a “green” profitable territory on our scaled in position.
Scaling in eliminates the traders desire to let the ego over-take their emotions. By this, we mean your trading system is useless if your emotions can’t be kept in check both on the downside and the upside. At ATP, we try to combat that by scaling into and out of positions, forcing ourselves to buy while others cry… and sell when they yell. It is extremely difficult to go counter-trend against the noise of the markets, but certainly if you plan to do so you must have a plan of action. Trading with emotion is a sure-fire way to lose money in the markets. Taking your time and being methodical with scale in entry points into a trade, reduces your risk of entry and allows for a much greater probability of profits, as well as greatly reduced losses on the trades in which you are wrong.
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Never dive “all in” into a trade position, no matter how confident you are of the entry timing, chart, and price. Always scale in methodically. Worst case the position takes off to the upside for you and you didn’t buy a full position, but that is so much better than going all in one one trade and mis-timing your entry, costing your trading account major dollars.
Hi there.
It may be of interest to you to learn the truth about Dave Banister from ATP. He is currently under investigation by the Ontario Securities Authority:
Dear Lead Inquiries Officer
Ontario Securities Commission
I hereby submit a complaint of fraud and wilful misrepresentation of facts against the above entities, and specifically against David Banister.
I had the misfortune to fall for David Banister’s online trading service – losing a significant amount of money in the process.
This individual systematically lies and cheats his clients through a complex scheme of false advertising and downright deceit.
Attached is an example of this fraud. Here, David Banister claims to be up 160% since November 2011. I can categorically confirm that this is a total lie.
I have supporting evidence to show that during November and December 2011 David Banister was -300% short while the equity markets rallied. Additionally, he sustained large losses (-6 to -22%) on the following trades: CEN. QCOR, DANG, JCP, CROX, TVIX, TZA, BGZ, ERY, SSRI, CVV. TAO, ZNGA, ZAGG, CN.US, WPRT, MEMS, MITK, NUGT. JCP, SVVC
Even more outrageous, his so called “core portfolio” has returned the following:
GAS cn – 27%
SA cn – 50.6%
BNG cn – 30.2%
EW cn – 20%
KLH cn – 33.7% (Dave wrote Feb 22nd: “this is my #2 personal position”
TIC cn -26.4%
There is absolutely no way that David Banister is even in positive territory in 2012. Clearly, with the above core positions alone, to get to a total portfolio return of his stated 160%, he’d have to have and offsetting 6 trades that netted an average 191.33% each this year.
Furthermore, even in the advertisement itself, clearly he would need another 4 companies (suspiciously not mentioned , though their supposed performance would demand otherwise) to have risen an average of 230.2% over the period – on top of the 6 different companies that offset his miserable core returns.
This doesn’t even consider the 15 or so trades I know for a fact that he has lost an average of 12% on. . . Each of these would equally require an anti-trade with another 172% positive return to arrive at his claimed performance.
Other examples of David Banister’s fraud include front-running clients’ money on small, extremely illiquid penny stock trades; failure to even admit to his “core” portfolio performance in daily and weekly updates, plus money laundering.
A fuller blog can be found at:
Also, this is his track record for the last few weeks.
CEN Full position. Bought C$20.30. Now C$15. Loss of -26%.
ZNGA Full position. Bought 13.30$ @ Mar 21. Now 7.50$. Loss of -43%
MITK Full Position. Bought $8.30 @ Apr 3. Now 2.5$. Loss of -69.9%
SN Bought $24.70 @ May 2. Now 22.8$. Loss of -7.7%
SVVC . Bought $29 @ May 7. Now 27.3$. Loss of -5.9%
WPRT. Bought $32.05 @ Apr 30. Now 25.8$ Loss of -19.5%
Your MRM system is revolutionary for sure. Nobody could do so badly without such a unique system…