
TECHNICAL ANALYSIS & RESEARCH
Understanding the Fibonacci Sequence
Fibonacci retracements are popular among technical traders. They are based on the key numbers identified by mathematician Leonardo Fibonacci in the 13th century. Fibonacci's sequence of numbers is not as important as the mathematical relationships, expressed as ratios, between the numbers in the series.
​
In technical analysis, a Fibonacci retracement is created by taking two extreme points (usually a peak and a trough) on a stock chart and dividing the vertical distance by the key Fibonacci ratios of 23.6%, 38.2%, 50%, 61.8%, and 100%.
Once these levels are identified, horizontal lines are drawn and used to identify possible support and resistance levels.
Understanding the Importance of Candlestick Price Charts
Candlestick charts originated in Japan over 100 years before the West developed the bar and point-and-figure charts. In the 1700s, a Japanese man named Homma discovered that, while there was a link between price and the supply and demand of rice, the markets were strongly influenced by the emotions of traders.
​
Candlesticks show that emotion by visually representing the size of price moves with different colors. Traders use the candlesticks to make trading decisions based on regularly occurring patterns that help forecast the short-term direction of the price.
Understanding Moving Averages
In statistics, a moving average is a calculation used to analyze data points by creating a series of averages of different subsets of the full data set. In finance, a moving average (MA) is a stock indicator that is commonly used in technical analysis. The reason for calculating the moving average of a stock is to help smooth out the price data by creating a constantly updated average price.
By calculating the moving average, the impacts of random, short-term fluctuations on the price of a stock over a specified time frame are mitigated.
​
-
A simple moving average (SMA) is a calculation that takes the arithmetic mean of a given set of prices over the specific number of days in the past; for example, over the previous 15, 30, 100, or 200 days.
-
Exponential moving averages (EMA) is a weighted average that gives greater importance to the price of a stock in more recent days, making it an indicator that is more responsive to new information.
Choosing Time Frames in Moving Averages for Crossover Signals.
​
I prefer Exponential Moving Averages with an 8 and 21 time lines. Notice that they are numbers from the Fibonacci Sequence. Numbers that are found in nature.
Understanding MAC-D
Moving average convergence divergence (MACD) is a trend-following momentum indicator that shows the relationship between two moving averages of a security’s price. The MACD is calculated by subtracting the 26-period exponential moving average (EMA) from the 12-period EMA.
​
The result of that calculation is the MACD line. A nine-day EMA of the MACD called the "signal line," is then plotted on top of the MACD line, which can function as a trigger for buy and sell signals. Traders may buy the security when the MACD crosses above its signal line and sell—or short—the security when the MACD crosses below the signal line. Moving average convergence divergence (MACD) indicators can be interpreted in several ways, but the more common methods are crossovers, divergences, and rapid rises/falls.
​
-
MACD helps investors understand whether the bullish or bearish movement in the price is strengthening or weakening.
Understanding RSI (Relative Strength Indicator)
The relative strength index (RSI) is a momentum indicator used in technical analysis that measures the magnitude of recent price changes to evaluate overbought or oversold conditions in the price of a stock or other asset. The RSI is displayed as an oscillator (a line graph that moves between two extremes) and can have a reading from 0 to 100. The indicator was originally developed by J. Welles Wilder Jr. and introduced in his seminal 1978 book, “New Concepts in Technical Trading Systems.”
Traditional interpretation and usage of the RSI are that values of 70 or above indicate that a security is becoming overbought or overvalued and may be primed for a trend reversal or corrective pullback in price. An RSI reading of 30 or below indicates an oversold or undervalued condition.
​
-
The RSI provides technical traders with signals about bullish and bearish price momentum, and it is often plotted beneath the graph of an asset’s price.
-
An asset is usually considered overbought when the RSI is above 70% and oversold when it is below 30%.
Understanding Volume
Volume is the amount of an asset or security that changes hands over some period of time, often over the course of a day. For instance, stock trading volume would refer to the number of shares of a security traded between its daily open and close. Trading volume, and changes to volume over the course of time, are important inputs for technical traders.
-
Volume is the number of shares of a security traded during a given period of time.
-
Generally securities with more daily volume are more liquid than those without, since they are more "active".
-
Volume is an important indicator in technical analysis because it is used to measure the relative significance of a market move.
-
The higher the volume during a price move, the more significant the move and the lower the volume during a price move, the less significant the move.
Understanding & Using Fibonacci Retracement
Fibonacci retracement levels are horizontal lines that indicate where support and resistance are likely to occur. They stem from Fibonacci’s sequence, a mathematical formula that originated in the 13th century.
​
Each level is associated with a percentage. The percentage is how much of a prior move the price has retraced. The Fibonacci retracement levels are 23.6%, 38.2%, 61.8%, and 78.6%. While not officially a Fibonacci ratio, 50% is also used.
The indicator is useful because it can be drawn between any two significant price points, such as a high and a low. The indicator will then create the levels between those two points.
​
Suppose the price of a stock rises $10 and then drops $2.36. In that case, it has retraced 23.6%, which is a Fibonacci number. Fibonacci numbers are found throughout nature. Therefore, many traders believe that these numbers also have relevance in financial markets.
​
-
Fibonacci retracement levels connect any two points that the trader views as relevant, typically a high point and a low point.
-
The percentage levels provided are areas where the price could stall or reverse.
-
The most commonly used ratios include 23.6%, 38.2%, 50%, 61.8%, and 78.6%.
-
These levels should not be relied on exclusively, so it is dangerous to assume the price will reverse after hitting a specific Fibonacci level.
IN REVIEW:
​
These are the technical analysis that I use on my charting:
-
Candlestick Pricing Grid
-
Exponential Moving Averages (using 8 & 21 time frames)
-
MACD with Histogram
-
RSI Oscillator
-
Volume
-
Fibonacci Retracement Tool
​
Keeping in mind that I am always using the Fibonacci Sequence of numbers (1,2, 3, 5, 8, 13, 21, etc in all of my personal settings, as this recursive series keeps presenting itself everywhere in life, nature, and the markets.
​
These are the "Technicals" that I look at to put the odds in my favor before I enter into a trade and participate in the market.
​
Below, are the "Event Indicators" that I look for to know that a market instrument is going to make a move.

Using Bollinger Bands
A Bollinger Band is a technical analysis tool defined by a set of trendlines plotted two standard deviations (positively and negatively) away from a simple moving average (SMA) of a security's price, but which can be adjusted to user preferences.
Bollinger Bands® were developed and copyrighted by famous technical trader John Bollinger, designed to discover opportunities that give investors a higher probability of properly identifying when an asset is oversold or overbought.1
​
-
Bollinger Bands are a technical analysis tool developed by John Bollinger for generating oversold or overbought signals.
-
There are three lines that compose Bollinger Bands: A simple moving average (middle band) and an upper and lower band.
-
The upper and lower bands are typically 2 standard deviations +/- from a 20-day simple moving average, but they can be modified.
​
​
Bollinger Bands can add value to your analysis. However, if you are going to use Bollinger Bands, I recommend using them on a separate chart from the technical indicators listed above. Too many indicators can become messy, disorganized and create a sense of technical paralysis. So be mindful of your objectives.
​
​
​

EARNINGS & DIVIDENDS CALENDAR
During these calendar events, stocks can make big movements either way.
​
Earnings could have an outcome with either a significant upswing or downfall depending on whether or not the company met its profit targets. Keep in mind, a company could have reported an earnings of $50mil and take a plunge because of lack of investor confidence, either by the actual target being missed (ie, last quarter's forecast was to have earnings of $65mil and only achieved $50mil.) Or their could be other risks, political, exchange, supply chain etc...
​
At the same time, targets could be missed, however the stock price increase because the company discloses in the earning's conference call that government contracts were obtained, or there was a technological breakthrough in some area.
​
With Dividends, the stock price will typically increases in the week leading up to ex-dividend date, then there is a stock price correction on the record date for the amount of the pay out.
​
Either way, when trading options on these positions, I enter the trade at least one week prior, I am monitoring the Greeks, especially the Delta on the options. Volatility will increase during these events and will impact your profitability on your trade. Earnings reports come out either BMO (before market open) or AMC (after market close).
-
With BMO Earnings, I usually exit the trade by 2:30 pm the day of.
-
With AMC Earnings, I usually exit the trade by 2:30 pm the next day.
-
With Dividends, I usually exit the trade by 2:30 pm the day prior to ex-dividend date.
​
(There is Pre-Market Trading and After Market trading that can go on behind the scenes during these reports. This is why you can often have a gap up or gap down in the pricing when the market opens for regular trading. This type of trading is usually done by Institutional traders and Mass Affluent traders who are trading Board lots at Limit Prices only.
​
​
You can track after hours trading from all US Exchanges on the NASDAQ website:
​
​
Understanding Forex Factory
to go to ForeFactory.com
Forex Factory is used widely by FX Traders. However, its highly valuable for day traders as well. Referencing the political events calendar can give you an indication as to what may have an impact in volatility and stock prices as well as foreign exchange rates. The simple rule is, look at the color of the files next to the economic data that is going to be announced; if the file color is orange or red, then announcement will have a higher impact on the markets.
​
As a day trader, I personally paid close attention to all orange and red files related to USD, CAD, and EUR. I would typically not enter a trade within at least one hour before or at least one hour after the announcement. The volatility from those announcements had a habit of disrupting valid technical analysis.
CNBC News Feed - Hot Sheets

Setup an email (like at Outlook.com) that will handle all of your trading news, subscriptions and trade tickets.
​
Then go to CNBC.com and create a free account and setup a custom portfolio of news that you will be pushed to your inbox every day.
​
Select Economic, Political, Technology and Environmental News in the following regions:
Canada
USA
Mexico
Europe
B.R.I.C.S (Brazil, Russia, India, China, South Africa)
​
This will keep you in the loop about the effect that globalization will have on your portfolio,
Quiver Quantitative
This is as close to insider trading as you can legally get!
​
-
Track personal stock transactions by U.S. Senators.
-
Track personal stock transactions by members of the U.S. House .
-
Track which stocks are currently trending on Wall Street Bets.
-
Get the inside track on what is happening with the shakers and movers.
Trading View

Market Depth - AKA Level II Quotes
A quick explanation of market depth - Level II Quotes
How to setup Dual Monitors with your MacBook Air
With this setup, you can add two additional monitors providing a total of three independent displays.
They can also be turned vertically depending on your preference.
​

I would have two 49" Samsung Odyssey G9 Monitors Double Stacked for my trading station.
​
However, you can have as many monitors as you would like, by having adaptors like Matrox as your video interface.
Building a Portfolio
A well-diversified portfolio is vital to any investor's success. As an individual investor, you need to know how to determine an asset allocation that best conforms to your personal investment goals and risk tolerance. In other words, your portfolio should meet your future capital requirements and give you peace of mind while doing so. Investors can construct portfolios aligned to investment strategies by following a systematic approach. Here are some essential steps for taking such an approach.
A well-diversified portfolio is your best bet for the consistent long-term growth of your investments.
-
First, determine the appropriate asset allocation for your investment goals and risk tolerance.
-
Second, pick the individual assets for your portfolio.
-
Third, monitor the diversification of your portfolio, checking to see how weightings have changed.
-
Make adjustments when necessary, deciding which underweighted securities to buy with the proceeds from selling the overweighted securities.

Sector Breakdown
A sector breakdown is the mix of sectors within a fund or portfolio, typically expressed as a portfolio percentage. Sector designations can vary depending on the fund’s investment criteria and overall objective.
​
-
The sector breakdown of a portfolio shows how much asset weights are allocated to what industry sectors.
-
Sectors typically are considered to be broad classifications such as manufacturing, financial, or technology. Within each sector, numerous sub-sectors and industries can be further delineated.
-
A well-diversified portfolio should not have too many investments concentrated in a single sector or group of related sectors.

Sector Performance Based on Economic Cycles

Creating a well balanced portfolio in the market over at least seven sectors can prove to be a challenge in a portfolio with a values of less than $500k. People who are risk adverse and do not want to find themselves in a speculative position in the market can create a balanced portfolio by using funds, (ETFs or Mutual Funds).
​
Funds can give you exposure to a basket of securities in any given sector or a group of sectors. Investors with a small account balance can participate in the market and still emulate a hedged portfolio without large capital requirement.
​
With managed funds there is still an inherited market exposure risk, and possibly political and foreign exchange risks. It is important that you do your due diligence prior to adding funds to your account by at least reading the prospectus summary.
​
With Exchange Traded Funds (ETFs), they have the characteristics of a stock but with the diversity of a mutual fund. Like all managed funds, they come with a management fee built into the fund. (The fee percentage is disclosed in the prospectus.) However, the fees are minimal, and fees only become an issue in the absence of performance.
​
With that being said, there are some warnings that you should take note of. Do not purchase ETFs with the following characteristics:
​
-
Leveraged ETFs - these products use the loan value of securities or derivative products to give them more exposure to to the market than the capitol that is in the fund.
-
Inverse ETFs - these products act in the inverse of the market. If the market goes up, they decrease in value and vice versa.
-
Any ETFs that have "Resets"
​
The major component of Leveraged and Inverse ETFs mentioned above is that they are reset at the end of the day. You could be in a winning position that day, and wake up the next day to find your gains have been lost. These types of ETFs are more popular among Day Traders who do not hold positions overnight. (this is not the absolute rule, however, until you can really understand how the Fund Manager balances these instruments, you be best to avoid them.)
​
A second benefit in trading sector ETFs is that you can also Hedge these positions using derivative products like Options. Either by selling Covered Calls or buying Puts; (or selling Covered Calls to pay for your Put Options). You would do this respective to the sectors that are at risk by determining the "Cycle" that you would be heading into as per the overview in the above video.
​
*Below is a list of SPDR Sector ETFs that would give you a diverse exposure to the markets.

Always buy stocks and ETFs in Board Lots (groups of 100) - This will make your portfolio more liquid when moving in and out of positions in the market. Option Contracts automatically consist of 100 options which represents 100 shares of the underlying security.
To properly hedge your position or to prevent yourself from being naked in a Sell-To-Open Option position, always trade Board Lots. (Also, Board Lots look cleaner in your portfolio)
​
[In the event that you obtain partials of an equity from a DRIP and you intend on exiting the position, Sell only the Board Lot and Donate your partials to a charity or to your own charitable fund at the end of the year to benefit from the tax receipt from the fair market value of the security(s)]
Using Third Parties to Pick Stocks
Investment Advisors spend a large amount of time building their Book of Business, meaning their primary focus is on accruing more clientele to increase the amount of capital that is under their management. After the time that is spent with ongoing courses and research to meet minimum industry standards, this doesn't leave much time to analyze the vast amount of securities to fulfill the Investment Policy Statement of their clients.
​
This is where third party analyst come in. I use to use an independent forensic accounting research team to provide Models with independent stocks in them that would represent Canadian or North American markets in either a Conservative, Growth, or Aggressive Growth portfolios with instruction on how much weight each security would represent in the portfolio. They would update the model every quarter and I would make adjustments to the individual client portfolio based on the weight and instrument that was advised by them.
​
I would then hedge out the portfolio using derivative products to boost the earnings. The models would generate about 12% to 15% per year and were not dependent on derivate hedging.
(less than 10% of brokers in North America are option licensed, and less than a quarter of them are comfortable in their knowledge and understanding of the derivative market, therefore shy away from implementing it in their investment policies.
Accountability Research Corporation
​
​
This was the forensic accounting firm that I used to research and build my Growth Models.
As per the IPS (investment policy statement), an advisor would have a mix of Equity, Fixed Income, and Cash.
​
Fixed Income yields very little return as an individual Bond or GIC because interest rates are so low. However, when Bond traders are actively managing the bond fund in the secondary market they have been able to bump those yields substantially.
​
Using Russell Investments, we would be able to satisfy the Fixed Income ratio in the IPS by holding their funds that typically yield 7% to 8.5% per year.
​
Another fund that was used by Russell Investments was their Global Infrastructure Pool. This fund profited by infrastructure fees from Bridges, Airports, Toll Highways, etc... The Global Infrastructure Pool fund yielded an average of 24% per year.
Fixed-income investing often takes a backseat in our thoughts to the fast-paced stock market, with its daily action and promises of superior returns. But if you're retired—or are approaching retirement—fixed-income instruments must move into the driver's seat.
​
At this stage, preservation of capital with a guaranteed income stream becomes the most important goal.
Today, investors need to mix things up and get exposure to different asset classes to keep their portfolio incomes high, reduce risk, and stay ahead of inflation. Even the great Benjamin Graham, the father of value investing, suggested a portfolio mix of stocks and bonds for later-stage investors.
​
If he were alive today, Graham would probably sing the same tune, especially since the advent of new and diverse products and strategies for income-seeking investors. In this article, we'll lay down the road map for creating a modern fixed-income portfolio.
​
-
It has been shown that stock returns outpace those from bonds, yet the discrepancy between the two returns is not as great as one might think.
-
As people move into retirement, fixed-income instruments become more important in order to preserve capital and provide a guaranteed income stream.
-
Using a bond ladder is a way of investing in a range of bonds with different maturities, in order to prevent you from having to forecast interest rates into the future.
​
A commonly cited rule of thumb has helped simplify asset allocation. It states that individuals should hold a percentage of stocks equal to 100 minus their age. So, for a typical 60-year-old, 40% of the portfolio should be equities.
Most seasoned industry professionals believe that there are too many variables that affect the market to be able to "Time the Market" as day traders do. So they take a more holistic approach to investing. Also, investment advisors earn money on the percentage of AOM (assets under management. There for it is more advantages to all parties for the advisor to grow these assets at a steady and slightly accelerated rate in relation to the indices without constantly seeking out a homerun.
-
The absolute is to protect your principal.
-
You must yield a minimum of 3% to 4% to breakeven with Inflation and Taxes.
-
Your overall portfolio should net a 10% to 20% even during recession markets.
-
To be successful trader with a balanced and steady cash flow, you will need to build a managed sector balanced portfolio that is hedged from the upcoming cyclical impacts.


Being a “Former Approved Person” under iiROC regulatory agency and employed by Scotia Capital. I am required to disclose that I am no longer a licensed broker. That in itself legally prevents me from providing any Investment Advice.
All conversation(s) should be deemed as casual correspondence and focused mainly on the mechanics of the industry, and not be interpreted as "advice", and/or the advisory of placing an interest in any one particular security.
You should always consult with a Currently Approved Person under the iiROC regulatory agency before taking a position in your investment portfolio based on any interpretation(s) of the conversation(s) that take place here or with any person, whether it be verbal, written or implied.
This message is to provide transparency and to prevent any misunderstanding.
I recommend visiting the iiROC website to publicly view the credentials and disciplinary actions (if any) about any person whom you are to work with in the Financial/Investment industry.
Scroll to the bottom of the page,
Click on Advisor Report.
Scroll to bottom of 2nd page,
Enter the name of Advisor, - click search.
​
This will provide you the background on your advisor and whether he/she are licensed to represent the type of investment that they are recommending.
​
​
Past performances do not dictate future results.
