Self Promoting Guru

Discussion in 'Trading' started by Brandonf, Dec 29, 2001.

  1. action

    action

    the last hour of the day the stock was just screaming). I should have taken my profits there because my sell rule came into effect.


    one tactic that changed my trading life (there are many others) was to use the method of taking off a position in chunks. Generally I go in with a full lot, and peel off a quick 1/3 for costs and a small profit. Then will exit the last 2/3rds at breakeven if it turns (is very common) or take another 1/3 intraday if we get a good run to a S or R point, or average range point. This became viable commission wise after going with IB. 500 share costs the same if you exit all at once or 100 at a time (for example) The win to loss ration improved greatly. Think about how many times have you had a trade go south the moment you entered? Not often...usually you get some sort of move your direction. Get those costs out and be nimble...this was not possible at $15 a trade. It is in a larger account, but I am not there yet... the goal now is to learn hedging to hold overnight. This helped improve the batting average...home runs are not the goal.....Jack
     
    #21     Dec 29, 2001
  2. Commisso

    Commisso Guest

    action,

    Your exit methods are almost identical to mine for the majority of the set-ups that I trade...

    I take a third off anywhere between 1-2R (1 to 2 x risk) and peel the other 2/3 rd's as the market continues to go in my favor...........

    This allows me to stay in trends for much longer being that at worst my profits will be breakeven and it also helps during choppy markets when set-ups get triggered, go a lil in your favor and then stop you out......

    PEACE and good trading,
    Commisso
     
    #22     Dec 29, 2001
  3. action

    action

    Yes that is part of the "changed my trading life" ....staying in a position without "fear".....you cannot operate in fear. Let the thing grow or build as you go with it....The confidence is built in soon as I get that first chunk off...Take care there......Jack
     
    #23     Dec 29, 2001
  4. You seem to give up on curing it.
    I would suggest that you try some Chinese "Qi Gong" practice. It might help, it might not help with your pain. It definitely help with your body if you practice. And it doesnot cost you $200-300/month. It does however cost your time and persistance. If you do think trying donot try anything complicated since it is unnecessary.
     
    #24     Dec 29, 2001
  5. Magna

    Magna Administrator

    Brandon,

    Excellent thread, appreciate you taking the time to post. As for Neo-The-Geo it's best to ignore him. When he made his first entry on another thread and said: This is my first and last post, we all knew he was lying thru his teeth and couldn't resist digging further. That's why Baron added the Ignore function...

    Anyway, members will just ask themselves who is making a contribution and what former supposed chatroom moderator is just trying to stir the waters?
     
    #25     Dec 29, 2001
  6. Brandonf

    Brandonf ET Sponsor

    News can provide one of the best opportunities for traders. It can also be very dangerous if you do not know how to deal it. I personally do not buy good news, or sell bad news. I look to buy bad news and sell good news. This is based on the premise that if something is supposed to go up, but it goes down people will get scared, causing it to go down even more. If something is supposed to go down, but goes up the short sellers get scared and this can cause it to move up nicely.
    The BUY SETUP

    1) Bad news comes out in a stock, this can be earnings, warnings, downgrades ect.
    2) The stock gaps down below the low of the prior day.
    3) I set two alarms. The first is setup 15 cents above the low of the prior day. If this price is violated I will look to enter on the long side. The second is placed right above the 30 minute high if this is lower than the prior days low. If this price target is hit I will enter partial lots.
    4) I place my stop 20 cents below the low at the time the setup occurs.

    THE SHORT SETUP

    1) Good news comes out in a stock. Again this can be earnings, upgrades, new products etc.
    2) The stock gaps up above the prior days high.
    3) I will set two alarms. The first is set 15 cents below the high of the prior day. If this price is violated I will look to enter a short. The second is placed right below the 30 minute low. If this price is broken to the downside I will enter partial lots.
    4) I place my stop 20 centsabove the high of the day at the time the setup occurs.
     
    #26     Dec 29, 2001
  7. Toni

    Toni

    Hey Gang,

    This commentary is a little dated but I've seen a lot of interest in trading the Nasdaq eminis and the QQQ lately so decided to throw in a few posts I've made elsewhere which may be helpful to guys.

    [EXCERPT FROM WED. JAN. 2, 2002 11:16 PM]

    Market reversals such as that which happened intraday on Wednesday can often catch many traders unawares. Something I hear a lot is "Wow! Who would've expected such a move!" In actuality, it is possible to be on guard for such reversals. [text deleted as not applicable] . At 12:28 est time I alerted [text deleted as not applicable] of the decent potential for a reversal Wednesday afternoon. What I wanted to talk about here was how and why I considered this likely. We'll be using the following chart as a visual.

    http://www.tradingfrommainstreet.com/jan2_2002nasreversal.gif

    First let's take a look at the 15 minute chart. This was what I was watching primarily over noon. In essence, what I saw happening was the that the market had been falling steeply since mid-day on Monday. With the onset of the 10:45 am et reversal zone though, the market didn't really correct much through time. Sure it bounced some, but then fell right into a triangle formation which you can see in blue. When you have a triangle of that scale following a drop of that size, then the odds increase that the triangle will lead to a reversal. This is because it doesn't have enough time to correct from the selloff. One trap that many people fall into here is that they don't recognize this action and instead will be looking to short a breakdown from the triangle, which will often be false. They treat all triangles as continuation patterns when in fact the context of the pattern makes all the difference.

    At this time many stocks and indexes began to see some rounding off action, drawn in the upper blue slope in the NASDAQ Composite chart. As the NASDAQ rounded off at lows, it created a "cup" type of formation. This is when you start to see Phoenix setups, something I've talked about in previous commentary which is essentially a reversal pattern off lows. Between 13:35-13:40 I thus posted [locatation deleted] to look for such longs and that the market was ready to move higher. Usually the volume at this time will have been drying up but that initial move off lows will lead to a pick up in the volume as the right side of the "cup" forms.

    Now what you are looking for is a "cup-with-handle" formation. The highs on the initial rally off lows are usually slightly lower than those on the left. Use the highs of the morning compared to the pink circle labeled "handle" as a reference. You want to use the last main pivot high as the start of the "cup." At this point, since the move higher was so steep, a correction will generally occur mainly through time. Since the "handle" began with a pivot high on the 5 minute charts we were able to avoid a false setup as the NASDAQ pulled into the 5 minute 20 sma and instead were able to nail the breakout just after 15:15 pm et. If you look at the 15 minute charts you can also see that in comparison to the upward move off lows, the pullback to the 5 minute 20 sma was miniscule and hence in this case was not enough of a correction. Also notice during this time that once again volume was dropping off. This is very common in the formation of a continuation pattern. Upon a true breakout volume will increase, as it did Wednesday with the breakout from the "handle."

    Such "cup-with-handle" formations can often lead to very strong moves out of the lows and rallies such as the one Wednesday afternoon are not uncommon. In the overall market this type of pattern tends to happen about once every month or so. This is often enough that it's a pattern you want to be aware of. Resistance on the "handle" breakout will usually fall at moving average resistance such as the 15 minute 200 sma, or, as in this case, at price resistance from previous highs or lows or congestion zones. On Wednesday this resistance came from the congestion zone of Monday over noon.

    Now, following this type of action you need to use caution because the market is going to have to correct. It is not uncommon to see a continuation of the upside move right out of the open, but generally any gap will fail and any rally which occurs right away will reverse by 10:15 am et. Your main concern is going to be the strong possibility of a trading range day. [Afternote: As you can tell later we did see the upside in the morning as anticipated but a base near highs over noon led to an upside breakout late in the day on Thursday.]


    Take care....
    Toni
     
    #27     Jan 6, 2002
  8. Toni

    Toni

    Ok, here is some more info on timing market reversals. Please excuse the rough format since I don't want to take extra time to re-write it :p

    [15:02] Toni 15:02:37 http://www.tradingfrommainstreet.com/jan4_2002nasreversal5.gif
    [15:02] Toni 15:02:48 Alright I have 2 charts we're gonna look at
    [15:03] Toni 15:03:02 The first one is the 5 minute QQQ
    [15:03] Toni 15:03:19 then the 15 minute QQQ we'll look at in a few minutes
    [15:04] Toni 15:04:11 Here is a bit of review from my morning market commentary:
    [15:04] Toni 15:04:20 [10:05] Toni 10:05:38 Market Alert: Nearing the 10:15 reversal period.
    [15:04] Toni 15:04:20 [10:06] Toni 10:06:28 S&P daily is becoming overbought according to the CCI (Commodity Channel Index P=15)
    [15:04] Toni 15:04:20 [10:06] Toni 10:06:42 S&P 500
    [15:04] Toni 15:04:30 [10:16] Toni 10:16:00 Market Alert: Most gaps WILL fail.
    [15:04] Toni 15:04:31 [10:16] Toni 10:16:35 Market Alert: $COMPX CCI = 240
    [15:04] Toni 15:04:38 [10:19] Toni 10:19:17 Nasdaq is beginning to fill it's gap
    [15:04] Toni 15:04:45 [10:19] Toni 10:19:39 One pattern worth looking at will be the Avalanche intraday
    [15:05] Toni 15:05:15 Using the 5 minute chart I'm going to walk through some of the signals as to why we were looking for this pattern.
    [15:05] Toni 15:05:35 First off MOST GAPS DO FAIL
    [15:05] Toni 15:05:58 This is particularly true if the stock has been running for several days.
    [15:06] Toni 15:06:21 Because they will fill more quickly that those which occur at the beginning of a new trend
    [15:06] Toni 15:06:26 or trend reversal.
    [15:07] Toni 15:07:12 This morning we not only saw a gap but we also discussed the significance of the CCI as an overbought /oversold indicator
    [15:07] Toni 15:07:51 and how levels in the indexes were well into the overbought range which when P=15 generally means anything near or over +200
    [15:08] Toni 15:08:22 Nearly right away out of the open the markets began to stall.
    [15:08] Toni 15:08:48 and pulled back to the area of the open within just the first 15-20 minutes of the day
    [15:09] Toni 15:09:07 This shows us that buyers are having a hard time supporting the highs.
    [15:09] Toni 15:09:51 The lower highs around the area of 10:00 confirmed the weakening market
    [15:10] Toni 15:10:30 and the triangle type of pattern at highs (which Alan Farley calls the Hells Triangle) broke lower
    [15:10] Toni 15:10:49 A Hells Triangle FYI, is just a specific example of an Avalanche.
    [15:11] Toni 15:11:14 Notice that the pace of the selling out of these highs was quite steep
    [15:11] Toni 15:11:32 more so in comparison than the rally off 15:00 levels yesterday
    [15:11] Toni 15:11:56 The drop brought many stocks right into their 15 minute 20 smas.
    [15:12] Toni 15:12:02 sma= simple moving average
    [15:12] Toni 15:12:16 http://www.tradingfrommainstreet.com/jan4_2002nasreversal15.gif
    [15:12] Toni 15:12:23 Here is a chart of the 15 minute .
    [15:12] Toni 15:12:44 Now, going into this time was when I mentioned to begin looking for Avalanche setups.
    [15:12] Toni 15:12:57 Since we actually had missed the very small one out of the open
    [15:13] Toni 15:13:09 but the 15 minute charts were still good to go
    [15:13] Toni 15:13:13 Essentially,
    [15:13] Toni 15:13:18 what you look for with this pattern
    [15:13] Toni 15:13:43 is a consolidation or bear flag type of pattern at the 20 sma in most cases
    [15:14] Toni 15:14:30 (You do get subsequent waves at the other main moving averages such as the 50 , 100 and even 200 but these are rare intraday and mainly apply
    to daily, weekly and monthly charts.)
    [15:14] Toni 15:14:52 Intraday the 10 and 20 sma are more common areas for the consolidation/flag to form
    [15:15] Toni 15:15:21 I don't use a 10 sma but I would guess that on the 5 minute that bounce into 10:00 highs was probably off the 10 sma
    [15:15] Toni 15:15:26 hold on.. now I'm curious
    [15:15] Toni 15:15:55 yep :)
    [15:16] Toni 15:16:11 see.. who needs these additional moving averages cluttering up your charts :)
    [15:16] Toni 15:16:25 At any rate
    [15:16] [we] - T are you talking about the little bear flat at 11am ?
    [15:17] [we] - flat = flag
    [15:17] Toni 15:17:06 As soon as the QQQ pulled into the 15 minute 20 sma what you then look for , given this scale of setup, is about 4 bars hugging the moving
    average
    [15:17] Toni 15:17:47 when talking about the 10 sma I was referring to the little flag which broke around 10:00 just before the red triangle broke
    [15:18] Toni 15:18:06 the consolidation at the 15 minute 20 sma is the bounce off 10:45ish lows
    [15:18] Toni 15:18:14 lasting to just around 11:!5
    [15:18] [we] - ok I understand ty
    [15:18] Toni 15:18:55 If you look at the 5 minute chart again you'll see that the flag off the 10:45 ish lows hit the 20 sma and that led to the break down
    [15:18] Toni 15:18:59 Of interest,
    [15:19] Toni 15:19:20 if you want to enter early one way to do so is to sell short as it comes into the 5 minute 20 sma
    [15:19] Toni 15:19:31 and then place a stop just over that resistance
    [15:19] Toni 15:19:57 if you're trading the QQQ though and the $compx or nas futures 20 sma is higher, use above the $compx or nas futures 20 sma
    [15:20] Toni 15:20:38 The more traditional, although not nearly as profitable once you get the hang of it, method of entering is to wait for the previous bar on the 15
    minute charts to break lower
    [15:20] Toni 15:20:46 and then place a stop over the pivot high.
    [15:21] Toni 15:21:33 Now, the first main drop out of this Avalanche setup intraday is the one you want to trade and for the most part steer clear of any later moves
    [15:21] [gh1] - That's the hard part -- taking the trade without confirmation to the downside (for me)
    [15:21] Toni 15:21:52 and what you look for to exit is strong price and potentially equal move resistance
    [15:22] Toni 15:22:09 so, in the case of the QQQ that came at $41
    [15:22] Toni 15:22:12 around noon
    [15:22] Toni 15:22:28 I was gone at this time so wasn't able to help you out with that
    [15:23] [we] - yep it really held that 41 level
    [15:23] Toni 15:23:17 but something to keep in mind in the future is that when you do have an Avalanche setup intraday like this, reversals (although perhaps not as
    strong as this one was) are common
    [15:23] Toni 15:23:29 because many times you do get those rounded lows
    [15:23] Toni 15:23:57 In this case if you look at the 5 minute again you'll see in a red rectangle a small phoenix setup
    [15:24] Toni 15:24:25 So anyway.. the initial drop is the best... initial setup intraday as an Avalanche
    [15:25] Toni 15:25:04 You'll see this pattern over an over again so it's something you'll want to stick in your mind :)


    Hope you guys found these posts to be worthwhile....
     
    #28     Jan 6, 2002