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Mark Seleznov
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Mark Seleznov is the Chief Investment Officer of Seleznov Capital Advisors (SCA). SCA is a SEC registered investment advisory firm that performs advisory services for Mutual Funds, Trusts, 401K plans and Individuals. Mark supervises the asset allocation programs of SCA in a variety of strategic... More
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  • Trading System status for those using a 50 Day Simple Moving Average System

    This results posted below for the status of the 50 day simple moving average condition as of the close of trading November 6, 2009 is for informational purposes only.

    Although the 50 day SMA is widely followed, it is one of the worse systematic trading plans that a institution, advisor, or retail trader can use.  I do not recommend using the 50 day SMA without a research report to determine if it is appropriate for the ETF, index, or asset you are trading.

    The week ending November 6, 2009 saw a large number of these ETF's both above and below their 50 day SMA. (A "1" indicates above the 50 SMA, a "0" below the 50 day SMA)

    Security NameTicker SymbolAbove 50
    DB Commodity IndexDBC1
    Diamond Trust DOWDIA1
    Energy Select SPDRXLE1
    IPath India IndexINP1
    IShares 25 IndexFXI1
    IShares AustraliaEWA1
    IShares Basic MaterialsIYM1
    IShares Hong KongEWH1
    IShares Latin AmericaILF1
    IShares MexicoEWW1
    IShares MSCI EAFEEFA1
    IShares Pacific ex JapanEPP1
    IShares S&P 500 GrowthIVW1
    IShares SilverSLV1
    IShares TaiwanEWT1
    IShares United KingdomEWU1
    NDX 100QQQQ1
    Oil Service HoldersOIH1
    S&P 500SPY1
    SPDR Consumer DescretionaryXLY1
    SPDR Consumer StaplesXLP1
    SPDR Gold SharesGLD1
    SPDR HealthcareXLV1
    SPDR Indutrial SectorXLI1
    SPDR TechnologyXLK1
    US OilUSO1
    EWYEWY0
    IShares DJ Real EstateIYR0
    Ishares DJ TransportationIYT0
    IShares Financial SectorIYF0
    IShares GermanyEWG0
    IShares Mid Cap 400IJH0
    IShares MSCI JapanEWJ0
    Ishares S&P Small Cap 600IJR0
    IShares South AfricaEZA0
    Pharmaceutical HoldersPPH0
    Semiconductor HoldersSMH0
    SPDR International Real EstateRWX0
    SPDR MaterialsXLB0
    SPDR Metal & MiningXME0
    SPDR Mid CapMDY0
    SPDR S&P HomebuildersXHB0


    Using the wrong system for an asset will result in losses.  Systematic trading is the best way to time the market, protect wealth, and eliminate Buy and Hold. 

    There is No "Holy Grail" in systematic trading.  You must use trend following systems for assets that "Trend" and "Oscillator" based systems for assets that just move up and down without major trends developing.

    Nov 07 11:43 AM | Link | Comment!
  • NDX 50 day moving average whipsaw
    (NDX) back above the 50 Day Moving Average
    The 50 Day Simple Moving Average is used by many Systematic Trading Plans. It is used indiscriminately across all asset classes, ETF’s, and Indexes. The 50 Day Moving Average works well with some ETF’s, but certainly not all.
    The fact that so many traders use the 50 day moving average, institutions, hedge funds and advisors follow this technical indicator.
    Some traders use crossing moving averages to help eliminate whipsaws. 
    There is no “Holy Grail” in trading systems. A trading system is a tool. As with all tools, it is important to use the right tool for the job. In Index and ETF trading, our research has shown that a 50 day moving average for an oscillator based ETF will result in even worse performance than Buy and Hold.
    Traders using the 50 day moving average on the (NDX) may have already reversed their sells of October 28th, 29th and 30th from short back to long.
     
    Longer term trends have remained in tack during the last 7 trading days. I do not recommend using the 50 day moving average with the (NDX), but you need to be aware of its action around the 50 day moving average because so many foolish traders use it.
    You better have the right trading system for the right asset. There are many great trading systems when applied properly to the correct asset or index.
    Nov 06 6:21 PM | Link | Comment!
  • Writing a Trading Plan

    Success in business, life or trading has one very important similarity. A Plan. A plan is essential for success. The top traders in the country all have this one similar trait and it is an absolute. I feel that this confuses new traders who are constantly being told about success in a specific type of trading method.


    You may read a book about a method of trading that the author claims makes him money. The one common denomination that the successful traders I know have, is a plan. Let's look at some of the more recognized approaches to the markets.


    Trend Trading

    Breakout trading

    Asset allocation

    Momentum trading

    Option writing

    Option Premium selling

    Moving averages

    Point and Figure

    Candlesticks

    Cycle trading

    Stochastics

    RSI

    Elliot Wave

    Pair Trading

    Volume analysis

    Swing trading

    Fibonacci

    Gann


    Each of the traders that use these methods have different degrees of success. The key is to have a solid plan and stick to it.


    A plan consists of specific set ups, entry points exit points and stop loss points. Position sizing is also critical. Don't use your entire trading capital on a few trades. Any method can have a series of losers and market conditions that may not be ideal for a period of time.


    Here is my toolbox for writing a trading plan.


    Time Frame - Are you using daily, weekly or intra day data in your trading
    Studies - If using studies or indicators, they must be absolute values
    Set up - The condition of the stock or index before you trade it
    Entry - The specific condition or conditions that now exists to take the trade
    Stop Loss - The maximum amount you will lose on any trade
    Exit - The conditions that say end this trade, with a profit or a loss
    Filter - How you chose which stocks or indexes to trade


    I feel that a trader with a plan has a chance to be in the top 5% of all traders. Develop your plan and work your plan!


     
    Nov 06 4:58 PM | Link | Comment!
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