the reason i don't use 1/8 above the high of the last bar is that often the last "blow off" day is a large percentage of the total move down encompassed in the 3+ days. I only expect it to bounce back a little... normally like 2/3 of the way or so... Which is why I also scale out. Unfortunately I don't have a scan for these. I try and determine sectors that I see a lot of red in, and then I just look at the individual charts. I do a lot of trading homework, but it gives me a great feel for what is happening each day. The only scan I occasionally use is to do a scan of any stock that is showing 250% of the day's volume. But I also get like 100 names to look at, but I can screen it down in half or so cause most of the names are that day's news stories. For instance on thursday night, I saw a lot of red in the defensive names, particularly the foods, natural gas, and hospitals. So I then just pulled up about a half dozen charts of each so that I would have like 3 candidates in each sector, cause if the sector bounced, so would the individual names. I just wanted to play those stocks that looked most overextended cause they would bounce the most. I hope this helps some. These aren't huge swings. On bud, I think I made an average of 1.5 points on 3k shares. I entered all 3k at 39 5/8 and just started selling like 900 every half up. On the stuff like cah I only played 700 shares b/c it is more volatile. Same with WLP. Only 700 shares and I bought them at like 98.25 which was only after 30 mins, but I liked that congestion and I knew that the bottom of that congestion was my stop so I was only risking like 1.5. Finally I have become pretty good at reading specialists and that's why I prefer to play these in the listed names, but you can play them on the otc ones too. If you see, I lost on RKY on fri, (if you look at the intraday, RKY never made a new hod besides that stop blower it did at 1:30, so I had no reason to really even be in, but some of this is subjective, by the way I only played 1200 shares b/c I have traded this one before and not had much success b/c the specialist loves to play with stops and make rapid moves on little volume to fake people out) I will probably try and play it again on monday. This is long, but I hope this helps and makes sense.
Yes, swinging is working and will always work. I really don't understand why it should not. What you might want to change [I am not talking to praetorian2 who obviously is doing OK, I continue to reply to the original post] is the time frame. Break out still works, they just only work on a smaller time frame [markets are fractals] counter trend. In the direction of the trend [down for S&P500 and Naz for instance] break out works fine, but downward. I am using proprietary scanning/trading software. But I know some interesting free sites [in other threads, excellent fee based sites are profiled]. http://www.traderbot.com/ http://www.wealth-lab.com/ of course http://www.sixer.com/ When you think your system is not working anymore, it is either because it was bad anyway, or, more likely, because you are fighting against the trend. That's why going to a shorter time frame works, because you can find a trend you like there. But it is not necessary, you may choose to simply go with the trend and keep the system [if it was built for both directions].
I wanted to quote Praetorian2 Did you mean to say new "high" instead of hud? I don't quite understand what is hud. I take it you are trading looking for something heavily oversold on volume and getting in for a slight correction as markets overreact to different things. Am I right? I always like to have a fundamental belief about why I trade something. Breakouts for example "is a stock that has a lot of support usually when it dips funds grab it up, but won't pay too much for it. When someone does pay more, during a bull market, more funds than buy it and a trend develops." Or on my swingtrading "My belief is that stocks that are in heavy demand haven't had all of the orders they are going to get 2 minutes after the opening. If they are heavily up, there is a good chance buying will continue" On trading on the news of CNBC" the public will always over react to the news, so the move can be faded when the market makers do." Is there a particular belief involved? Just curious. Or is it a pattern you have seen? The pattern will work until enough people see it and start to use it. Then it will start to fail as the majority of the public is on the wrong side of a trade. That pattern will then fail more and more. The public will stop using it eventually and then the pattern will work again. rtharp
HOD= High of day. basically if something that is oversold on a multiday basis makes a new high after the first hour bar. You can buy and put your stop in at the bottom of that bar. I have had a lot of great swings off that strategy. Just look for those names that are oversold with lots of volume on the last day of selling. Especially look for large blocks. That indicates institutions. I hope this helps. I can clarify more if it isn't making much sense. What I think you thought I was referring to was fading large gaps up/down. Which I do as well.
thought so. Your system definitely has some merits to it. It reminds me of a friend's scan he uses on Bigeasyinvestor http://clubs.yahoo.com/clubs/triplescreentradingsystem The above link is his message board if anyone is interested. He is end of day trading mainly though. Below is his program for bigeasyinvestor. He waits for a stochastic oversold on a strong trending chart. He lets the stock come to him by breaking the previous high (odds it will continue trend) this system above for long term is great during a bull market. You will see 5 big buttons on the top left of the screen click on "screening" then click on "big screening" . Right below the big button you will see "Screens" you need to right mouse click on it. Then click "new folder/screen" then type in the name for your screen. (triple screen long) Here is where you need the criteria. Click on add button. You will see a "choose from list" button click on it and then move down to "moving averages" and you need to look for "moving average 10 over 50 day" double click on it. Then on the other buttons you need to press "is equal to" "yes". Then I add stochastics is below 35 and the moving average volume is above 100,000 and the closing price is above 20. You can pretty much add whatever you want but that is all I screen for. I get about 60-70 stocks to look at every night. From there I filter out to the ones I think look the best. If anybody needs any help let me know. Eric Robert
Robert, Thank you for explaining the Big Easy new screen tips. I am using Big Easy's software, as I read your Dad's book (and Elder's), and develop and test my own system. Right now, I am looking at an IBD style stategy of looking for price jumps out of bases on increased volume, macd crossovers at the centerline, and macd fast over slow crossovers for entry points, with exits based on 13 and 50 day moving average support failure, or jumps above upper trendlines that might signal peaks. Thanks again, from a trading newbie. Kevin