“A” below is the momentum part of the equation and “B” is the time part of the equation. When price extremes are reached inside of these momentum and time-based price channels that is the time to start paying attention.
2022, and a significant part of 2021 had challenging trading action and what worked in 2020 not only didn’t work since then, but like the proverbial 'thousand paper cuts,' damaged a lot of trading accounts (mine included). Fintwit gurus who had been posting their huge daily trading gains for much of 2020 suddenly became quiet. Many switched from trading equities to trading short-term options. Many OTC stock traders dropped entirely out of trading, as volume dried up.
Other than the occasional mega stock that bucked the market trend like SGML above, these periods can be lean for Big Kahuna style stocks, but they can also provide opportunities for tweaking and improving your trading system. In upcoming posts, I’ll address some of the key short and long-term cycles driving the market action currently, and projections based on how these cycles are lining up going forward.
When the markets change, 'adapt or die'. These are sometimes expensive lessons, but necessary to up your trading game.
We’ll get deeper into the weeds in upcoming blogs as to the “guts” of the system…
But to touch on it, the components of the system include: TSS Cycles, BMI (Breakout Momentum Indicator), Vector or VR, (A measurement of “price movement inside of time”) and 'Lemal Lines' which are cycle-adaptive trend lines (sure I could have named them Trump lines, but why?).
TSS Cycles has been my main trading technical analysis tool for the past decade. For trading 'technicians,' whereas Fibonacci can oftentimes be quite accurate as to where price will turn after 'resting' after an initial breakout, it can result in 'Dead Zones' where money is often languishing unnecessary waiting for 'TSS Cycles' to play out. Blindly trading based on Fibonacci retracements (this one 61.8% below) without considering the correct TSS Cycles in play can result in your money not working as efficiently as it could be!
And these cycles can help you avoid these Dead Zones. Elliot Wave and Gann analysis, in my experience were either too complex or too subjective…with that said, I have heard of many traders using these successfully… For me, it was too complicated and confusing. With all things in trading, find what works for YOU!
Which brings me back to the basis of the club.
Like many equities traders we are regularly faced with a quandary, how to rectify a rather long list of stocks that “in the moment” we passed over due to juggling other stocks or the fact that it just didn’t rise to the top of our list when we first saw it…(Case in point TOP which was “top” of my list of prior week stocks and due to other distractions I missed the entry near 6.50. The price reached $268 or 4,000% in ONE DAY << NOT A TYPO!! Of course, these are uncommon stock price eruptions, all the more reason to examine what we could have done better, especially when a stock ends up at the top of our watchlist).
These missed opportunities are VERY costly. Another example from last year that I missed due to a “cup of coffee” run cost me over $150K (more coming on that one in upcoming blogs)…that is only the tip of the iceberg. These missed opportunities run well into the 6 figures annually and probably even into the 7-figure realm.
The multitude of potential trades missed even in challenging market conditions can be sobering.
This is why having a community of like-minded traders with lots of eyes on setups we see forming can be very financially rewarding for all involved. In a hot market these trades can be plentiful and in a lean market which we are currently in, sometimes it takes even more eyes to spot the laggards.
To clarify, the heart and soul of a Big Kahuna style of trading are multi-month swings based on super-cycles. In normal market conditions there are plenty of opportunities for these trades. However, we are not currently in normal market conditions. Although there are plenty of clubs on the web that are geared to these hyper-explosive 1-3 day breakouts, there are far fewer that focus on subtle trades percolating over weeks and even months. When entered using the correct 'TSS Cycle,' these cycles can allow you to ride potentially multi-month super cycles (and even multi-year on the right stocks) and allow you the opportunity to be out on the golf course without stressing over every ripple in a stocks trend.
It is a system that is obsessively focused on strategies for trading the best and biggest stock trading prospects the market has to offer.
How lucrative can understanding how these new super-cycles form be? VERY! For example if you understand how options greek “Delta” works, you can exploit low option implied volatility (basically lower prices on the options because the trading community hasn’t quite yet caught on to the opportunity ahead) and when you can catch a stock in these cycle-based “price squeezes” it is possible to go a little further out on the option strikes realizing that a significant move over several months lies ahead.
This is what happened to me a few years back on an inexpensive option trade on NVDA based on a 'Millionaire Maker' pattern setup. Due to a tad bit of uncertainty at the time about my timing, I went in light and purchased only one contract with six months out on the expiration for just $600. Over the next several weeks and months, the stock’s price exploded out of the price squeeze and due to the increase in implied volatility and delta…the price on the option was moving dollar for dollar with the price of the stock. Pretty soon the option was up 2000% in just short of 6-months for nearly a $12K gain on the original $600 investment.
This is what is possible when you understand how these super-cycles start and have the capacity to make price projections based on BMI and Vector.
Listen, this is not to brag; it is to show you the potential of being able to read charts like the back of your hand. It’s a skill that often takes many years to master, but I can help speed up your learning curve tremendously. I am reminded of a time a few years ago when five of the top ten performing stocks on that day were stocks I had told my trading partner a few days prior that were primed to pop bigly. Out of 8500 charts I had gone through in the prior week, what are the odds of that happening without some serious chart reading skills? Negligible, I would say. This is what is possible when you understand how to read charts using simple price action clues based on momentum and time-based trendlines.
If you like many other people, have waited until later in life to begin building a retirement nest egg, our unique and proprietary trading strategies can help you close the gap sometimes quickly! Despite being an early real estate investor, I came out of a decade-plus being very involved with a monastery and living somewhat of an ascetic life, with a significant gap between my retirement goals and my retirement reality.
This encouraged me to add a few more tools to my financial tool belt, and thus my involvement with the equities and futures markets has now spanned nearly three decades.
Let me lay out the foundation as to how and why our club is different. Nobody else out there is teaching these cycles because they were developed in-house nearly two decades ago. My vision for the trading club is to train a legion of traders across several disciplines and make this technical analysis tool as popular as some of the better-known ones out there. This is not hyperbole when I say that I use TSS Cycles and Lemal Lines more than any other indicator. They help me 'get out of the weeds' and see the 'Big Picture' price action that often drives stock trends.
I hope to be able to entice more loyal and talented members 'with good game' to become integrally involved inside of the club by learning the trading system and then helping us find trades to feed to other members. Again, I don’t want this to be a 'top-heavy' trading club that consumes the lives of those at the top.
That makes it more sustainable in the long run as we tick off some of our bucket-list travels and may occasionally have limited time and internet connectivity.
You might be wondering why we would spend so much time on this rather than solely trading, but it's a question we also ask ourselves as we consider the time and effort required to produce training and run the club. Obviously, our motivation for doing this goes beyond just making money (you can find more about my motivations in my bio on the 'About' page).
We could use the same time and capital to vastly increase our individual trading capacity. I'm hoping that creating a highly functional trading club with many high-caliber traders will ultimately be a net positive for everyone. Here's one example.
One particular trade strategy uses my momentum and stock cycle timing tools at 'price zones' (specific psychological price points i.e., $5, $10, $25, $50, etc.) where a stock’s price approaches these zones in 3-ways: dropping down from above, rising up from below, or leisurely retesting the price zone from several months back in a sideways/ downward movement. Monitoring dozens of these price zones with stocks approaching at three angles looking for optimal entry zones requires many eyes. However, the reward is a multitude of great trades being served on a regular basis.
It is virtually impossible for one person to efficiently do this without missing out on regular 10-bagger trades like META’s call options in the past few days which were propelled off one of these price zones during an earnings release.
For traders who join and make themselves valuable through research and other contributions, their involvement here may not cost them anything. My goal for this club has been to create a synergistic community of traders who strive to make the club the best it can be, essentially 'Traders Helping Traders.' While I have made the trading game easier to understand and trade, I am by no means a guru. Like you, I am constantly looking to learn and improve my own trading.
I believe I have made significant progress in simplifying the trading game, making it easier to understand and execute trades. Like you, I am constantly seeking opportunities to learn and improve my own trading skills.
So, if you have any ideas or suggestions that could enhance what we are currently doing or improve the structure of the trading club to make it more efficient and member-friendly, please don't hesitate to share them with us! We welcome and appreciate anything that contributes to helping our members quickly grasp the concepts or aids in developing systems to track and prioritize the multitude of stocks that emerge as top contenders in our trading ponds."
Since we are capitalists, we are not doing this for free, but it is not mine or Daryl's sole motive for doing this. My trading partner Daryl is well into his 60's, and I have just crossed that threshold. Daryl has battled cancer, and his wife recently passed away, and I have had my own health issues. Many of my health challenges began in my 20's, and I consider the fact that I have recently reached 60 and am still on this side of the ground to be a testament to the health and lifestyle choices I have made over the years despite my prior health challenges.
So, again, we both realize that the clock is ticking, and we both have some life goals and bucket lists that we want to fulfill. For me, one of the things I would like to get out there is the discovery I made of TSS Cycles. It is an elegant, holistic, and cut-through-the-BS approach to price trend analysis that, in my humble opinion, is much easier to read than Fibonacci cycles, Elliot Waves, Gann Cycles, or most any other exotic technical analysis tool you will encounter.
Would you rather use charts like these:
RETA - Reata Parmaceuticals, Inc.
Or these:
ABT Abbot Laboratories
Simplicity is often best. Just waiting until the correct cycle line appears based on what a momentum stock has done in the earlier stage of a super-cycle, can allow you to catch quick resolution “meat-of-the-move” trades over and over.
But it’s not all about charts.
Due to considerable prodding from my crew about creating more content on my trading style, I realized that if I were going to get this new info out there, I would need to add more writing to the mix. Yes, although I enjoy studying stock charts and look at hundreds per day, if that were all I was writing about, I would quickly become bored, and frankly, so would you.
Besides trading, I enjoy reading and researching lots of great information…HACKING LIFE in other words.
The same intensity I put into researching health and healing back in my 20’s when I recovered from illness is the same intensity I put into about anything I study. I will read a hundred books on a subject to master something if it truly interests me. The 'outside the box' strategies I used to regain my health were a result of hundreds, if not thousands, of hours researching (and trying myself) various natural and alternative health modalities.
Having developed what some might consider a pretty fragile constitution due to my prior health issues, I became acutely aware of the effects of diet and lifestyle on my health. As both a consumer of natural health and later as the Director of an Integrative Healthcare Association, I have some expertise in that area and hope to be able to share some of that information soon.
Look for more blogs in the future on not only health but also personal growth and self-development, and even politics and technology, which I consume voraciously.
Remember, I developed this style of trading to simplify trading. Learning what you learn here, you can take it into any market and trade it successfully once you understand how the cycles work and influence every facet of our existence.
Stay tuned for more insights on trading, health, and life!
Paul Lemal
Big Kahuna Trading Club
PS: For those techies of you out there, if you have experience-knowledge-contacts or resources in the development of “Virtual Trading Rooms” and would like to help in that area please contact me at: paul[AT]BigKahunaTradingClub.com
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