TradeStops members are very familiar with the trailing stop alerts that can be used to track their stock positions. The Stock State Indicator (SSI) alerts are an integral part of the TradeStops methodology that TradeSmith has developed over the past decade and a half.
But, did you know that there are many other alerts available to you that can help you manage your trades? There are even alerts that can even help you find potential trades. Let’s take a look at the entire suite of TradeStops alerts.
For today’s article, we’re going to focus on a single stock as our example – Gilead Sciences (GILD). GILD has been a poor-performing stock for quite some time now. It stopped out almost a year ago in early May and has been mostly trending down ever since. (This is also a great example of a stock that bounced higher, but never triggered a new SSI Entry signal. Aren’t you glad you didn’t buy this in August or October last year!)
The stock is currently trading in the mid $60s, but it was almost $50 higher a few years ago. If we believed in the potential of the stock to move higher and wanted to keep track of the stock as it improves over time, there are a number of alerts we can use.
For this article, we created a new portfolio as it will be easier to keep track of the different alerts as we add them. We’ll show you how all of the alerts show up on the “Alerts” tab at the end of the article.
Let’s start by adding an SSI Alert. To do that, we click on the “Add Alert” box, which opens a new page to choose which stock we want for the new alert.
After clicking “Next”, we’re brought to the page that shows all available alerts. The box for the SSI Alert is at the top of the page. We can easily add the SSI alert by clicking on the “Add Alert” button.
Let’s now take a look at some of the other alerts available on this page. The next box is the “Trailing Stop” alert. This gives us the option to use a fixed percentage trailing stop for the position. The box opens up and you see two buttons. The first button has the Volatility Quotient (VQ) of the stock. The second button can be edited, and you can use a fixed percentage of your choice. In this case, we’re going to use a 20% trailing stop starting from April 12. We can also edit the date, and we’ll show you how to do that during our educational webinar next week.
These top two alerts are used by almost every TradeStops member. The bottom four alerts are hardly used at all.
Let’s look at the “Price” alerts. There are actually five different alerts that can be set under the “Price” alerts tab. For our GILD trade, let’s set up a Percentage Gain/Loss alert to be notified when GILD closes 10% above our entry price.
Next come the “Time” alerts. Again, there are multiple alerts that make up the “Time” alerts section.
For our GILD trade, we’re not going to set up any of the Time alerts right now.
The next section is one of my favorites. “Vol & MA” stands for volume and moving average. Many traders like to focus on stocks that have increasing volume when looking for a trade. They want to know if a stock is trending up or down with volume that is higher or lower than normal. The “Percentage of Average Volume” alert can do that for you.
My favorite alert for traders, however, is the bottom alert, the “Moving Average Crosses.” Many shorter-term traders like to see a stock with a short-term moving average that moves higher than a long-term moving average.
For instance, a very popular moving average cross is called a “Golden Cross.” This is a bullish signal when a short-term moving average crosses above a longer-term moving average.
We’ve set up the above alert for GILD to notify us when the 20-day moving average crosses above the 50-day moving average.
This alert can also notify you of a bearish cross, known as a “Death Cross,” when a short-term moving average crosses under a longer-term moving average.
The last alert, “Fundamentals,” is actually seven different fundamentals that investors like to use when determining the health of the underlying company. For this example, we’re not going to set up a “Fundamental” alert.
For our GILD position, we have four alerts that we set up. Here’s how they show up on the TradeStops site.
We’ll examine these different alerts more closely during our webinar next week. The presentation will take place on Wednesday, April 24 at 1 p.m. Eastern. Click here to register.
Research and Education Specialist, TradeSmith