sallyboy, On a related note, it is important not to change time frames when analyzing a trade. It's difficult to look at daily charts and attempt to trade them the following day on an intraday basis. Even if the stock is in an uptrend on the daily, it could have a bad day and downtrend all day crushing you along the way. Only if the intraday trend (i.e.- 15 min) confirms the daily is it a good intraday trade. If you identify a tradeable pattern on a daily chart then it should be traded on a daily time frame which means swing trading the position. Not sure I agree with you here. I find daily patterns to strongly influence the intraday trend. Of course a bullish daily pattern doesn't mean the stock will solely trend up intraday, but it is a powerful force, and many institutions and retail trade off the daily charts. With carefully timed entrances and exits it can provide a useful heads-up.
Magna, Agreed. I was really pointing to the idea that just because a stock may be uptrending or reversing on a daily chart doesn't necessarily mean that it's a clear buy for a purely intraday trade. The intraday must look like a buy also. In other words (as I've learned the hard way!), you can't just analyze the dailys and think that's how it's going to trade the following day. But you're right, where the stock is on a daily & even a weekly can help tremendously for intraday trading. For example, it's probably not a good idea to short a stock that's trended all day long down to it's 200 day ma since players may be looking to go long there and others may be looking to covering shorts in that area.
Magna, I understand the purpose of your examples and appreciate your pointing them out, so this is not a critique as I understand there are many factors in the analysis but I have to comment. The 3 Evening Stars are correct based on the formation of the three candles but I understand that technically a Bearish Evening Star should occur near the top of an uptrending stock while the three examples formed in stocks that are downtrending (not surprising given the market tone). EDS is particularly interesting however, because while we can debate whether there is an Evening Star, the clean break of the 200 day ma, the return move, and the subsequent drop (on heavy volume) is significant. Looks like a good short down to at least 52-53.
sallyboy, a Bearish Evening Star should occur near the top of an uptrending stock I agree, took another look at the three I listed. Both APOL and DSL did have a 3-day mini-rally (DSL barely), so the bearish Evening Star formations are forming after an uptrend, although not exciting ones. And, as you mentioned, EDS is a stronger pattern as it's formed after a much nicer uptrend. Gads, it's tough to find uptrends in this market!
Magna, Actually I forgot to mention that regardless of whether they are Evening Stars or not, APOL, DSL, & certainly EDS are headed south for the winter! Excuse me, but I forgot what an uptrend looks like unless it's on a 1 minute chart!
I just realized I'm enjoying reading the member commments on this journal more than the journal itself. Hitman I think you really want to be a writer because you're a good one- but with all due respect, I'm not really sure what's going on here. It's starting to sound alot like self- indulgence-whining and again with all due respect -- immaturity. I think there are alot of outside issues you need to deal with-all this pressure and tension(angst). After commenting on a past post of yours describing what you were going to do first day of trading after the destruction--you came off very callous- in my opinion. I, now, realize this is not you but the way youve choosen to set things up-how you view yourself-how you view trading. You are bogged down with alot of sh--. You need to work alot of things out. There are many different methods to do this. I've done it-many have done it. Now you need to find a way. All the best.
Took a total gimmick of a day to score my first four digit game in almost 2 months. My game seems to flow a lot better since the removal of indicators, and while I left a tons of money on the table today, I am happy with my progress, knowing once my confidence, concentration and rthyme are back, the numbers will go up a lot more. What an awesome week for the firm, my numbers are nowhere near the average, but it is a start. 5 games left in this month, I am capable of go into a hot streak and close it out with respectable numbers, just a matter of focus . . . This was without any question the best trading week we have seen in a long long time, hope it keeps up. 9900 shares on 5 of 7 shooting, +1447 before commissions, +1106 after, 2 bullets. Pre-Market: My daily chart analysis last night fell through the window when I walked into the office in the morning and saw DJI futures down 400 points. Forget news, upgrades/downgrades etc . . . this is going to be a sharp bounce. 9:30: Still, I don't want to be the first kid on the block to buy a new toy since getting in the wrong stock too early can cause some serious pain. Saw some double print on CRA with a offer stepping down, so bulleted it, I was in the money for a quarter but it won't break 19.50 and I ended up covering for flat. 9:48: Took LM and AGE on futures rebound, just good looking tape action and I got 40 cents out of LM, 30 cents out of AGE. Bad mistake as I thought the squeeze was over and I bulleted MMC, covered for flat when I saw the futures/IUX rebounding. Unfortunately my limit order was only filled 200 shares, and I got a 70 cents pop out of it, sold in disgust but it went up 2 more points! Took VTS on OSX pop but sold too early for a 10 cents loss. Big energy rebound today and I completely missed it, simply because I had no luck with those stocks lately and I was afraid to trade them. Just a week ago the sector was in a choppy consolidation stage, but this week it went to a new range and traded smooth as silk, this is how daily charts can come in handy, you want to day trade stocks that are moving on the daily's. 10:21: Took LM off the bottom at 34.25 for 1000 shares, sold for a 60 cents profit and missed a full point rip . . . Took ANN at 23.05 on RLX rally and took a half point move. DJI turned positive and it looked like the buyers were done, wish I shorted CRA and MMC with bullets but I wanted to take home a four digit game today . . . Birthday's can be very stressful, a painful reminder that I turned 22 and still haven't accomplished anything yet. Maybe one day my trading will be as flawless as the clouds in the blue sky, as pure as a saint . . .
Brutal shooting as I got the direction completely wrong off the open. Anytime the market is as oversold as it is, the first bounce always sticks. I was the under influence of Mrs. D. and another trader who planned on fading the gap. By the time I switched to the long side the open was over and I spend an entire afternoon in frustrating churning. Hard loss to swallow as it snapped a 3 games winning streak but I will look forward to tommorrow's game. +359 before commissions, -290 after, 19600 shares on 3 of 10 shooting, 3 bullets (ouch). In the morning we had issues with order execution software and for whatever the reason I could not get to hotmail where I had my long/short list from last night. Not that it matters as water lifted all boats today . . . I had quite a few missed lay-ups that would have won the game today, hope I hit them tommorrow. Pre-Market: Where do we start? Massive downgrades in every single Apparel store I can think of, from LIZ to TIF to OO . . . As the market opened I immediately realized that those downgraded stocks actually went up but it was too late, I had no bullets on those but I did not went long in time. Insurance, Financials, Telecom all upgraded. I had CEX and XAL as longs based on daily chart. 9:30: Everything single chemical stock gapped up 1 point or more but DD was only up half a point, missed a huge lay-up there, didn't take the trade. BTK up big, Mrs. D help 5000 shares over the weekend and it gapped up 15 cents, didn't take the trade. Long SBC on XTC strength, lost 5 cents. MMC gapped up 4 points with a big juicy offer, futures came in, bullet up a tick too late and I got spreaded to 86 instead of much much sweeter 86.50. Covered for a 60 cents profit. Not so lucky with LEH, bulleted off 49.80, thought 50 would be a big psychological support, stop at 50.01, but I knew I will take slippage damage if it prints above 50, just not 40 cents! Lost 60 cents in that trade as futures ripped hard. That was the biggest miss of the day, as I was hit hard in one trade and missed the golden opportunity to go long after the initial pullback. 10:04: Bulleted AEP as it was a weak defensive stock, churned and churned and ended up barely getting my bullet back, and it collapsed last 3 minutes into the close, just as I covered 1000 shares in disgust! 10:30: Long FRX/BRL on DRG strength and futures rip, took 30 cents out of FRX, I was in the money as much as half a point in BRL and it printed .75 next print back to the figure! What hell was that about! That was before the last time I saw black for the day. 11:14: XAL stocks up a lot, took some LUV and stopped out for 10 cents on 1000 shares, unneccessary. Took WLP on HMO bounce stopped out flat. Churned in UNP as I thought transport stocks have another leg, NOT . . . out for flat but churned away a lot of commissions. 12:30: Shorted MMC at 88, covered 100 shares at a time on the way down but it tanked 2 points on like no volume whatsoever! I covered everything half a point into the move, I wanted a scalp there but it gave me what could have been the game winning trade. 2:00: All churning, LEH, AEP, etc . . . 3:00: Bulleted LEH at 51.5 and got a pair of quarter point scalps, and that AEP collapse into the close caught me off guard, I covered 5 minutes too early . . .
A few blown lay-ups turned what should have been a four digit game into another blah. +862 before commissions, +374 after, 13400 shares on 7 of 15 shooting, 3 bullets. Pre-Market: The piece of news that ruined my day, 3% increase in oil price, daily charts on energy screamed shorts, didn't put up a bullet until it was almost too late because of this news. After the initial squeeze it was a silky smooth sell-off. NYT downgraded, should have bulleted GUC, KRI, a little slow in getting to them. DRD and WMT upgraded and I had a list of drug stores in mind. Some financial and insurance upgrades rounded out the package (didn't get to them in time). 9:30: Saw a big sell-off in CEX (I didn't think of this at the time but it clicked later) because chemical companies require oil as a raw material hence raise in oil price kills those stocks. Bulleted PPG and only got 500 shares filled, got 80 cents out of the trade, a huge miss there. Went long CVS and WAG, got a quarter out of CVS, out of WAG for a dime loss after some churning. PSS had a good daily, went long at 53.75 and this thing is too thin, I am not going to trade it again (I raised volume requirement to 300K a day since I started to trade bigger), made 15 cents when the BID disappeared. 10:00 Consumer confidence number came out, crap numbers and I thought they will sell the market (they did, but not then), market tanked briefly I used bullet on PPG immediately, lost 15 cents as the market ripped in my face! Gave drug stores one more shot with LDG and it was clear that this just won't work, lost 10 cents in the long. Took some PX and ECL on chemical rebounding (oil price was falling), out flat on both as I didn't trust the upward move and watched them rip big time. 10:20: By now I definitely see the weakness in energy, I already missed more than just a few shorts, bulleted SGY at 31.61, stock fell to 31 and it squeezed back to 31.75 in two prints! I sold some more up there as the OSX was still weak and I covered everything near 31, and it tanked 1 point in two prints after I covered. That was the turning point. 11:00: UTY broke support on daily's, took DUK on the short and watched index tank and DUK doing next to nothing. Barely recovered bullet cost after commissions on that one. Took HP on OSX bounce out flat. Time for a long break. 3:00: Took RSH on RLX rebound out flat. Took AHC on OIX bounce and I was spreaded half a point because I carelessly jumped in too early without watching the tape first. Saw big volume prints going off at 59.30 so I poped in a tight stop for my existing shares and bought a little more down there with a very hard very tight stop as the tape said it was the bottom, managed to minimize the damage on that trade. Went long in TYC/GE/IBM etc for small scaps as futures went up into the close . . . Holding on to a $100 lead for the week, $1400 for the month, 3 games left, I know I can still make this respectable, talk is cheap, just do it . . . Reading daily charts every night is certainly helpful, back then I thought it was worthless because at least half of the set-ups just won't work period, but lately I realized the advantages of doing daily's for my watch list (150 stocks as of now): 1) Before the market opens, by looking at news and futures, I will immediately eliminate a quarter of the set-ups from your list. 2) As soon as the market opens, by looking at futures/sector indexes I will immediately eliminate half of the set-ups from your list during the first 10 minutes of the game. I will have a quarter of the set-ups left, very high quality set-ups, coupled with tape reading very high percentage shots. It really adds to my existing morning game. Every little bit helps, all it takes is one or two good trades in addition to the inevitable churns to make a good day. 3) Reading a lot of daily charts each night helps to put my mind into a trader's groove. For anyone to succeed in anything he must live/eat/breath it, and I believe I am getting close to the next break through in my skill level. It also helps me to remember symbols/industries, so when I look through briefing.com every morning I can recognize more and more symbols from that upgrade/downgrade list. 4) Last, but not least, when the plan is working like you wrote it, it makes you very confident and a lot more likely to hold on to winners. Also, people don't make top tier money by coming into the office at 9:20 every morning, effort may not give result at first, but it eventually will. At equivalent skill level, he who put more effort into his work will come out ahead, as simple as that, and the best of the best at my firm walks in at 7AM every morning with a 1 hour commute!