Experienced Traders Please take a glance: Identify this system or methodology...

Discussion in 'Strategy Building' started by dr0833, Nov 24, 2007.

  1. dr0833

    dr0833

    Hi I'm currently a student and taking a course in TA. The processor of the class is a trader and gave us his an assignment to see if we could identify what he is doing in one of his trades from a while ago. He usually holds positions for a few days to 6 weeks (occasionally), with most trades being 2-4 weeks. Apparently he has been profitable for 21 years. This is one of his long trades. I have done some analysis and tried to identify what hes doing but not really sure. I know the stocks are obviously in a strong uptrend near there 52 weeks highs. I'm hoping there are some experienced traders that can help me dissect what my professors is doing. You can probably just go back and look at historical charts to see this trade. I attached a chart. The open high low close is wrong on the chart.

    Symbol:BAMM
    Date of trade: Buy: 9/28/2006 @ 18.01 O:18.50, H: 18.50, L: 18.01, C: 18.34. Sell: 10/19/2006 @ 19.47 O:19.36, H: 19.71, L: 19.14, C: 19.46,

    His Trading Strategy:
    -----------------------------
    Round lot shares usually between 500-5000
    8.5% stops
    20% profit target
    Av. Volume > 100k
    Sell if close < 10 SMA for 3 days
    Volume probably plays a role
    price cycles of some sort may play a role

    He may use these or a variation of these, such as when bollinger bandwith contracts, and moey flow has been increasing for 3 weeks, etc, etc, but not sure:

    Bandwith
    Moneyflow
     
  2. YoungOne

    YoungOne

    If you don't mind me asking, which school is it that you are attending. As far as answering your question, that looked more like a short than a long to me. Until about 17.55ish. Just a bounce off of resistance. He got lucky it turned around and broke that resistance at 18.50. Good luck.
     
  3. MGJ

    MGJ

    Code:
    Indicators: HighestHigh(60 days), SimpleMovingAverage(5 days)
    
    If	(yesterdays close > yesterdays SMA(5)) AND
    	(todays low > todays SMA(5)) AND
    	(todays close > yesterdays HighestHigh(60 days)) THEN
    		Enter Long Tomorrow on a Limit Order at Price= (today's (H+L+C+SMA(5)) / 4)
    exit left as an exercise for the reader.
     
  4. WharfRat

    WharfRat

    Agree with MGJ - the entry is a garden variety breakout. Exit looks like a short term trailing stop.
     
  5. dr0833

    dr0833

    Heres a short. From my analysis I noticed the stock was hitting a 4 month resistance around $68. Money flow was significantly lower at the the time of the sale although the stock was making higher highs when approaching that resistance. I assume this has some to do with his shorting model. Anyone have any ideas? The trade generated about 11% in one day. I know his shorts are typically a few hours to 3-5 days max.

    Symbol: PNRA
    Short sell: 10/24/2006 @ 65.92
    Buy to cover: 10/25/2006 @ 60.95

    10/24/2006
    O: 68.23
    H: 68.90
    L: 65.93
    C: 68.70
    Volume: 1195454

    10/25/2006
    O:63.33
    H: 65.98
    L: 60.84
    C: 64.41
     
  6. Your first BAMM example is hard to analyze because the picture you provided does not show the dates.

    As for the PNRA example I presume it is because of an opening gap down.

    By any chance did you check if there were any significant announcements like earnings on these dates?

    After closer examination I think you should pay closer attention to the recent big volume days and the price ranges of those days. His signals may take their cue from big volume breakouts of those ranges. Your myriad other indicators I think are pretty useless.
     
  7. dr0833

    dr0833

    I know he doesn't hold during earnings and he bought on the 24th the day before the gap down which would mean his model was anticipating a significant price decline. I will attach another chart.
     
    • bamm.jpg
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  8. On a further note I believe these two stocks made my own watchlist too at the time based on fundamental criteria.
     
  9. dr0833

    dr0833

    Can anybody shed more light on this system?
     
  10. bkveen3

    bkveen3

    seriously 3 years later? anyways it appears that he takes break out trades. buy at close over resistance, sell at close under support. SL below or above structure high/low.
     
    #10     Nov 21, 2010