Wally Olopade’s HARP Model for Stock Trading

Wally Olopade is the Chief Technical Strategist at Right Side Trading. Wally founded Right Side Trading in 2013. He full-blown quit his job and dove in. Long story short, he blew his account three times—but didn’t give up. Instead, he started studying technical analysis. He didn’t want to have to rely on the media, experts, etc. It took him three years to perfect his strategy. In 2016, he started teaching other traders how to overcome the obstacles they face. He wanted to understand how you make money on the right side of the chart. To make money, you have to decide what to do with the last candle on the right side of the chart and anticipate what will happen moving forward. He teaches people to see the data for what it is and make decisions based on the current data.

We talk about @RightSideTradin HARP Model for Stock Trading in this episode of How To Trade It! Check it out! #stocks #stock #trading #StockMarket #invest #Investing #DayTrading #StockPicks #analysis #TechnicalAnalysis #Quantitative Click To Tweet

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You’ll want to hear this episode if you are interested in...

  • [1:05] Learn more about Wally Olopade + Right Side Trading
  • [3:24] Why other people’s opinions were an obstacle
  • [7:18] The type of data that Right Side Trading looks at
  • [11:01] Wally’s HARP model for stock trading
  • [15:39] The types of patterns they look for
  • [19:12] Wally’s risk management process
  • [24:14] Wally studies things both new and 100+ years old
  • [31:00] Learn more about the Right Side Platform

Why other people’s opinions are an obstacle

In 2008, Wally Olopade was in luxury real estate. He was working with properties $1 million and above. People stopped buying because the US was going into a recession. At the time, experts in the media kept saying the real estate market was going to crash. Then another expert would completely disagree. Wally struggled to decide who to listen to. When Obama became president he said, “We’re not in a recession.” Wally trusted his opinion, and long story short, went completely out of business. Every single person now would say, “Yes, 2008 was a recession.”

Wally didn’t ever want to have to depend on the media ever again. His biggest pet peeve was that everything was based on hindsight. How do you know what to invest in today? He didn’t want to depend on other people’s opinions—he wanted to interpret the raw data himself. It began his journey into technical analysis.

The type of data that Right Side Trading looks at

Wally learned about quantitative analysis after reading a book about Jim Simons (reportedly the best quantitative analysis trader ever). He’s a multi-billionaire who believed that success in the stock market was all about finding patterns. He hired mathematicians, statisticians, and physicists to help him come up with formulas to detect patterns in the market. If you pair patterns with statistical data, it becomes quantitative analysis.

Jim realized his algorithms would only take trades with a high probability of success because of the repetitive patterns. He would never trade anything random. The question becomes, what patterns are you looking at that you’re not paying attention to? You have to understand which patterns occur, when they occur, and why they occur. Once you understand those things, you start seeing patterns everywhere.

What type of data does @RightSideTradin look at in his stock trading strategy? Learn more in this episode of How To Trade It! #stocks #stock #StockMarket #invest #Investing #DayTrading #StockPicks #analysis #TechnicalAnalysis #Quantitative Click To Tweet

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Wally’s HARP model for stock trading

One of the models that Wally created he refers to as HARP:

  • H = Healthy stocks
  • A = Attractive prices
  • R = Risk
  • P = Profit potential

His mantra is “Before you take any trade, you want the stock to play the HARP.” He got the idea from the Bible. There was a king who was only soothed when David played the harp for him.

They use a 50-day simple moving average to look for two criteria. Firstly, the stock has to be trending higher. They look at it in a bigger time frame to get a bigger picture of what the stock was doing. If it’s trending higher over 10 years, you know it’s a healthy stock. They’d never be in a stock where the 50-day average is trending lower. That alone has saved them from many poor trades.

When the pandemic hit and many stocks dropped, people were advised to buy into airlines, casinos, and cruise lines. But they were all below the 50-day moving average. Instead of buying into unhealthy stocks, they bought Tesla, Apple, and tech stocks. The other stocks barely moved in 2020.

The types of patterns they look for

They start looking for candlestick patterns. Secondly, they look at how close it is to the 50-day simple moving average. Is it bouncing off it? Did it come close, but not hit it? They can also look at the relationship of the stock compared to the 50-day moving average in the past. If there’s a predictable pattern, you can gauge what it might do next.

Then they look for the type of candlestick pattern that usually shows up before a rise. If the stocks start doing that pattern again and show the bullish signal, the analysis tells them that five out of six you’d take that trade, it’s worked.

Once they identify that the pattern is happening on the monthly chart, they look at where it’s going for the next 3–6 months. This has allowed them to look for opportunities on a daily and weekly basis.

What is Wally’s risk management process? Why does he study stocks and people that are 100+ years old? Listen to learn more!

What types of patterns does @RightSideTradin look for? Learn about his stock trading method in this episode of How To Trade It! #stocks #stock #StockMarket #invest #Investing #DayTrading #StockPicks #analysis #TechnicalAnalysis #Quantitative Click To Tweet

Resources & People Mentioned

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