Weeks aug 5 – sep 16 2020

MCD IS A WINNER DURING THIS COVID -19 TIME

These are the Trade that I will follow in the week. I comment on it as an opinion and should not be taken as financial advice. If you have any questions, read the Terms and Conditions of the Site.

Mc Donald continues to benefit from the pandemic, due to the fact that people must remain in their isolated homes, this fast food chain saw the price of its share rise since it is perceived as a beneficiary of the purchase of food in these times.

MCD on jul 15, 2020 makes crossing MACD lines to the buy or long side, in the FisuOne® method, this occurs when the red MACD line is above the blue one, indicating the beginning of a long trend.

Starting from defining the trend in the graph on the left, which is a daily graph, I will look at the graph on the right, which is 4/6 times less in time, such as a 4-hour graph shown in the example, entries and exits for a long trade.

Then the FisuOne® method defines a long entry when the price of MCD crosses the green MA21 line from below to above and at the same time the momentum line crosses the zero line indicating strength in the price rise, this occurs from aug 5th .At that moment I enter the first TRADE at 198.43 and define at the time of entry what will be the level of stopping or leaving the trade if the trade does not come out as I think and that level is what I call stop loos and always in the FisuOne® method is placed at the minimum before the entry, which in this case is 191.59. This level is very important since it will define how you know the amount of shares that I will be able to buy depending on what whoever wants to make this trade wants to risk, in my case I always try that this value does not exceed 1% of my account, as protection of my capital which is the main thing in this business.

So if I have an account with 10,000 dollars and I want to risk 1% that means that I am only willing to lose 100 usd if the trade does not go out as I think, that going to the example, MCD has entry in 198.43 and if I define the stop loss In 191.44 it means that 198.43-191.59 = 6.84 which I can buy (With 1% I want to risk) 100 / 6.84 = 15 shares.

This calculation I can do the same with an account of 50,000 / 100,000 / 1,000,000 whatever I may have in my account and that will depend on each trader, what will change then is the amount of shares that can be bought but not the concept of risking 1 % for example with 100,000 what I am willing to risk will be 1000 usd that makes 1000 / 6.84 = 146 if I follow the FisuOne® method is to set a stop loss of 1% of my account to limit my losses, a very important question in trading.

Then the exit of the trade as always I can define it in 2 ways or I exit when the price begins to lateralize on the Bollinger Band line or I exit when the price cuts from top to bottom the green line MA21 this value is 214,42.

During this 3 weeks MCD give a 8.05% in the first trade. The second trade we must follow FisuOne® again and HD give 3.70%.

In the FisuOne® method and in my book Trading for Relief® (Amazon) it is explained in detail how to calculate and to understand this type of trade.