Description
Focus – What to trade?
The usual focus of technical analysis is on “How to trade?” and analysts employ various indicators or patterns to anticipate market action.
Tushar Chande’s Complete Toolkit adds value by moving beyond anticipation to participation by helping you answer the question, “What to trade?” (out of the thousands of stocks and ETFs to choose from).
In the long run, careful selection of what was traded can be much more profitable and impactful than how it was traded. In effect, since a system needs entries, exits, and risk management, TCCT focuses more on entries (participation) and exits. Its scanning tools can also help you quickly find trending stocks with MetaStock’s super fast scanning technology.
Holding Period – Medium-to-Long term
Tushar Chande designed the TCCT systems using the TOPS COLA principle (Take Our Profits Slowly, Cut Off Losses At once). Therefore, the systems favor “longer” holding periods to support trend-following strategies. The systems work well with the individual investor who wants to hold positions for the medium to long-term (i.e., more than one month to several months). Of course, short-term trading is also possible.
TCCT Long-Term System
This “system” is a very long-term trend-following system, with very high levels of smoothing. That means the system will appear to be very slow to enter. The system uses a wide trailing stop so it can absorb a good bit of volatility and may seem relatively slow. However, should volatility increase too rapidly, it will stop out relatively close to the most recent high. So, the design is for patient position trading. There is a risk of a reversal soon after entry because the “system buys strength,” i.e., the price pattern will be overbought in the short-term and begin to look like a false breakout. So, risk management requires strict adherence to the exit stops.
TCCT Swing System
This systems is designed to identify a counter-trend approach to buy strength after weakness. It assumes that the short-term strength will develop into a swing move lasting several bars. It is traded with a tight stop because the risk of reversal is high. A low above the reference band initiates the first entry condition. The entry stop could be placed one or more ticks above the high of the first bar with its low above the band. A follow-through beyond the initial breakout will give an entry. This approach tries to avoid reversals after the initial breakout but can also delay entries. The primary risk to this strategy is a series of losing trades if prices become trapped in a narrow range. Hence, you should carefully track the number of successive losing trades. You should avoid trading a given symbol if you get three consecutive losing trades.
TCCT Volatility Breakout System
The design of this “system” tries to identify large one-day jumps in prices, which typically represents a significant reassessment of the symbol’s prospects considering new information, such as an earnings report. We quantify the large jump by using the 20-day average true range. A low above the breakout price triggers the
only entry condition. You can either enter tomorrow at the market or on a stop above today’s high. We have set up the system to exit on a trailing stop. However, you could use a time stop, holding for n-days, where n could be 20. The risk of reversal remains high, and the trailing stop should be used to protect trade equity. Sometimes an instrument will consolidate for a few days but stay above the low of the breakout day, so this trade may need some patience. You may have to scan many symbols to get signals on any given day. This approach works well on daily, weekly, or monthly data.
Included:
Indicators:
- TCCT 350E40 Long-term SMA Envelope
- TCCT Chande Trend Meter (CTM)
- TCCT Chande Wide Stop
- TCCT VIDYA
Explorations:
- TCCT Long-Term System
- TCCT Scan by CTM
- TCCT Swing System with Delayed Stop
- TCCT Volatility Breakout System
System Tests:
- TCCT Long-Term System
- TCCT Swing System
- TCCT Volatility Breakout System
Expert Advisors:
- TCCT Long-Term System
- TCCT Swing System
- TCCT Volatility Breakout System
Templates:
- TCCT Long Term System
- TCCT Swing System
- TCCT Volatility Breakout System
About Tushar Chande
Tushar Chande has traded the futures markets for high-net-worth individuals and institutional clients as a CTA and hedge-fund operator for more than fifteen years. He is the author of “The New Technical Trader” (with Stanley Kroll) and of “Beyond Technical Analysis”, two of the most important books on technical analysis in the past 30 years, and his indicators are among the most widely used and wildly popular. Literally, hundreds of millions of dollars have been traded using his ideas and concepts by hundreds of traders. He has a Ph.D. in Engineering, an MBA in Finance, and more than ten patents from the USPTO.
