# Potential & Breakout trading--Technical tips and tricks



## tech/a (25 October 2010)

One of the best forms of trend following entry signals.
There is much discussion on both Breakout and Potential breakout threads.

While there is some good info offered up there are also lots of trading hints which can increase the traders hit rate/return and understanding of these important technical setups.
Will add my bits over time with examples.

*JOE*
As the two threads most related to this thread are in this section it seems appropriate that this thread also stay here rather than moving to Technical trading ideas---if OK perhaps this could be sticky as the two threads have remained on the front page for years!
I think chart posting with explanation should be compulsory as well.

What do you think *JOE*


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## Joe Blow (25 October 2010)

tech/a said:


> *JOE*
> As the two threads most related to this thread are in this section it seems appropriate that this thread also stay here rather than moving to Technical trading ideas---if OK perhaps this could be sticky as the two threads have remained on the front page for years!
> I think chart posting with explanation should be compulsory as well.
> 
> What do you think *JOE*




Sounds good to me. Have made this thread a sticky. 

As per your suggestion charts and explanations are compulsory.


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## tech/a (25 October 2010)

If anyone has found a tip or trick that has helped their Breakout trading or finding potentials that are more likely to perform (Could be short or long).

Please feel free to add to the thread.


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## tech/a (25 October 2010)

BMN performed well today.
In many ways a copy book technical trade with all conventional signals correlating to a continuation of the set-up.
Managed to get a parcel at .48c

So these charts are great examples of a perfect breakout.

*We clearly saw BOTH Buyers overcoming sellers AND Exhaustion of sellers*

Click to expand


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## tech/a (25 October 2010)

Here is a poor example (currently) in my not so humble opinion.
Its *VOR*

There are very distinct pointers to trades which are likely to continue.
Trading after 27/9 telegraphed the strong initial breakout and 7/10 is an important bar
any suggestions as to why?

Click to expand


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## tech/a (25 October 2010)

Here is another showing how volume and breakouts don't need to be in the same sentence.
MANY excellent breakouts occur without huge volume---initially---it may well come--soon.

In cases like this I would use the High volume bars of 19 and 22nd as my stop area of support.
Its pretty clear that at these price points sellers were exhausted/absorbed.


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## Boggo (26 October 2010)

Good idea starting this thread tech/a.

Below is (to me anyway) a perfect example of when something is going to happen in a favourable way.
As you can see from the green arrows my scan is designed to find these setups.
From the ASX 300 I may get 10 to 20 candidates on any night in a bullish market and that is where a quick eyeball of the results usually narrow it down to maybe 2 or 3 to watch.
Patterns similiar to those at the highlighted area on the SRL chart just stand out like the proverbial at first glance especially when they pop up three days in row.

Just my


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## tech/a (26 October 2010)

Thanks for the input Boggo.

Its my intention to look at the Breakout as close to R/T as possible so that we can follow the good----bad and the ugly of the beast.

As breakouts are a well used entry technique and one of my favorites I think it would be more benificial to follow a breakout so we can see those signs that indicate future direction.
Perhaps add some commentary up to when the signal has failed (Or more importantly signs that indicate all is not as seen) or perhaps where the signal is screaming more.(again signs which point to an addition to your trade.

Breakouts are interesting as are potentials as they are at resistance.
We could also do a thread on swing trading and we would be looking at he same "potential" setups,but with a view of trading it short.

What I'm hoping we can achieve is a guide to what makes a better setup to the next -----and what indicates a breakout will continue to perform or fail.

In closing it is my observation that you will have a clear indication of potential success or potential failure within 3-5 bars of the timeframe you are trading. At which time your trade is on its way to profit or stop.
Will post charts of those in question (Those charts above) to illustrate after todays trading.


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## Boggo (26 October 2010)

tech/a said:


> Its my intention to look at the Breakout as close to R/T as possible so that we can follow the good----bad and the ugly of the beast.




These are my two watchlist candidates from last night, EHL (short term breakout today) and IDL (could break through where it was this time last year).

I initially picked four, the other two were NXS (very wide stop needed) and SDG (erratic volume and needs to be in the 83 to 84 cent area)

Am interested in in any views or comments on these.

Below the EHL and IDL charts is a chart of JML, see the similiarity with the chart of SRL in my previous post, they are the ones I jump on at the first sign of the break.

(click to expand)


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## tech/a (26 October 2010)

Happy to have a look.
My current breakout portfolio is AZM BMN DML GXY III JML NXS OZL SAR SEA SRZ BRM

So some similar held.


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## TheAbyss (26 October 2010)

This may be why EHl is looking ok at the moment.

Emeco Holdings Ltd. (EHL AU) rose 3.4 percent to 91 Australian cents. The supplier of earth-moving machinery had its stock rated “overweight” in new coverage at Morgan Stanley

http://www.businessweek.com/news/20...cks-aspire-asx-beach-energy-emeco-santos.html


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## Synergy (26 October 2010)

BAU for me ticks a lot of boxes after its strong performance today.

All initial breaks should be treated with caution until some sort of verification has occured.

Here there is a long leadup to the break, with a solid base being built in a very thin range - basically trading between 15 and 18c for 3 months. Then there is a progressive volume increase leading up to the initial break. This is followed by a low volume pullback, and a higher volume rise to close above the initial breakout. 

Tech I'd be initerested on your thoughts on BMN after todays move lower.


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## Sean K (26 October 2010)

tech/a said:


> Happy to have a look.
> My current breakout portfolio is AZM BMN DML GXY III JML NXS OZL SAR SEA SRZ BRM
> 
> So some similar held.



What's the AZM breakout trade? Through 45-50c, bouncing off 60 ish, or through 65, or potential breakout through 75c??


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## tech/a (26 October 2010)

kennas said:


> What's the AZM breakout trade? Through 45-50c, bouncing off 60 ish, or through 65, or potential breakout through 75c??




Holdings Kennas I've had some for a while AZM since sept .


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## Boggo (26 October 2010)

A couple from tonight's scan, I haven't looked closely at these yet so they may get discarded, I will leave it to others to comment in detail.
Neither of these are my 'ideal' setup.

MML needs to show a convincing break of of 5.70  

SDM has been battling 2.00, need to get over and show signs of staying over that area.

(EHL came up again tonight, 3 nights in a row now)

(click to expand)


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## Sean K (26 October 2010)

tech/a said:


> Holdings Kennas I've had some for a while AZM since sept .



I sold quite a few AZM at 5c (the bottom), to lock in a capital loss. Lucky to have bought them back at around 10, but sold not much after around 30. ouch.  Never thought they deserved more than about $60 and ounce au. The problem with combining charts with fundamentals. Like with AND. Arghhhhhh.


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## Boggo (26 October 2010)

Probably for an exercise we can track the progress of a pick (WHC) that had a nice close last night and broke out today.

(click to expand)


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## So_Cynical (26 October 2010)

tech/a said:


> Happy to have a look.
> My current breakout portfolio is AZM BMN DML GXY III JML NXS OZL SAR SEA SRZ BRM
> 
> So some similar held.




Hey tech...i hold ILU and have done for a while and im wondering since ILU has been in a fairly prominent up trend for the last few months...how come your not in? did it even appear on your scans? if not i wonder what could of prevented it from showing up? im thinking perhaps something didnt happen :dunno: so didn't tick all your systems boxes.


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## white_crane (26 October 2010)

Excellent thread.

Some quality info here with nice explanations to match.

Thanks tech/a and Boggo


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## white_crane (26 October 2010)

Here's a chart for UXC, comments welcome.

Today saw a test on average volume


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## tech/a (27 October 2010)

Bugga had this massive response typed out and I lost it.
Sorry Charts will have to suffice with notes.
BMN and UXC featured.
Bugga some really meaty stuff in there and I haven't got time to re type it!
Briefly UXC in a range breakout of immediate down trend possible but not a classic breakout as most know. Ranging highly likely as shown with Volume support boxes I made back in May.
BMN is wait and see.


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## It's Snake Pliskin (27 October 2010)

Would love to participate but don't know how to use Vista to post a chart on here. 

Are we to show hindsight or in advance charts?


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## Sean K (27 October 2010)

It's Snake Pliskin said:


> Would love to participate but don't know how to use Vista to post a chart on here.
> 
> Are we to show hindsight or in advance charts?



Only The Chartist did hindsight trades here. 

Until he started to do live trades under scrutiny and then he quit. 

I reckon tech would probably approve any example of how to manage a breakout trade.


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## It's Snake Pliskin (27 October 2010)

kennas said:


> I reckon tech would probably approve any example of how to manage a breakout trade.



To show tips and tricks some hindsight element is important. I hope we can all learn something from the thread. 

I was looking at LEI - at around $8-8.50 range of recent and past highs. Huge volume a week ago has eaten up a probe lower.  Chart anyone? 



> As per your suggestion charts and explanations are compulsory.



Could that be charts *or* explanations Joe?


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## tech/a (27 October 2010)

It's Snake Pliskin said:


> Would love to participate but don't know how to use Vista to post a chart on here.
> 
> Are we to show hindsight or in advance charts?




I agree Snake hind site will show a great deal. It "indicates" future possible results.I prefer R/T as it sharpens the skills and you see BOTH that which pans out and that which gets you.

More importantly how people handle both the positive and negative of trading.


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## white_crane (27 October 2010)

I've just noticed that my chart for UXC is different to the one tech/a posted.  On my chart, the bar on April 12 (the first volume support box in April on tech/a's chart) is only about half the size.  Strange 

I'm using Incredible Charts by the way.


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## Huitzii (27 October 2010)

Hi tech, I've been playing with this chart and its toying with my head lol.
Anyhow it looks primed to shoot for the stars (from my eyes).
the only thing that really concerns me is the moderately high volume today seeing it come back into its opening price of .0395 (I expected a good gain on this volume)
This stock has been pushing hard to break out from this level for a week or so and hasn't succeeded, so from here is it more likely to head south?
I would like you opinion on how the volume relates to the price action.
From how i see it today saw 2 to 3 times its normal recent volume which appeared to be from a strong early buyers list which saw some short selling in the afternoon.
I don't hold this stock im just trying to learn how to interpret the volume.
Anyhow the chart is HIG (HIGHLANDS PACIFIC)


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## satanoperca (27 October 2010)

Hi Huitzii,

No expert here, but extreme volume with a wide bar ending where it started the day indicates to me weakness, an upthrust. This is a trade I would not enter at this stage, the next few bars might confirm a reversal. I would also look for divergence in the coming days on your choice of indicator, for me a stoch or rsi for further confirmation.

A big THANKS to Tech/A for his contribution to this thread.


Cheers


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## tech/a (27 October 2010)

*satanoperca*
Is quite correct.This bar currently indicates selling coming in.
*However*
It looks very suspect with previous high volume bars moving forward in the last consolidation area.
so while it looks like this may well reverse off resistance it could (but unlikely in my view) turn out to be a test---continuing on in a few sessions time.

Chart is from Tradeguider VSA software.Not all commentary about the bar is shown.

Click to expand


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## Joe Blow (27 October 2010)

It's Snake Pliskin said:


> Could that be charts *or* explanations Joe?




Hi Snake,

I think charts really help to illustrate ideas and concepts and it would be preferable to have both if possible. 

What sort of problem are you having posting charts? There are plenty of free image editing applications such as Irfanview that work fine with Vista.


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## Huitzii (28 October 2010)

tech/a said:


> *satanoperca*
> Is quite correct.This bar currently indicates selling coming in.
> *However*
> It looks very suspect with previous high volume bars moving forward in the last consolidation area.
> ...






satanoperca said:


> Hi Huitzii,
> 
> No expert here, but extreme volume with a wide bar ending where it started the day indicates to me weakness, an upthrust. This is a trade I would not enter at this stage, the next few bars might confirm a reversal. I would also look for divergence in the coming days on your choice of indicator, for me a stoch or rsi for further confirmation.
> 
> ...




Thanks for your replies guys I can clearly see that now and it gives me a definite indicator to look out for in other trades as to where my stop loss will be placed on a high volume day.
Cheers


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## Boggo (28 October 2010)

This is an example of where the a stop should be triggered (in this case mine yesterday).

Today however, trading halt and then up 18% on the re-open.

Got to have rules, very easy to say I should still be in it and have those feelings of missing out on profit. It could just as easily have gone down by 18%.

Stick to your procedure regardless and don't be influenced by these one off occurrences.

(click to expand)


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## skc (28 October 2010)

Boggo said:


> This is an example of where the a stop should be triggered (in this case mine yesterday).
> 
> Today however, trading halt and then up 18% on the re-open.
> 
> ...




IIF actually made an announcement a few weeks back regarding an approach from GMG. So a takeover was in the works.

Sorry to talk fundamental in the technical thread. But perhaps a quick glance of recent announcements might be of help this time.


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## Boggo (28 October 2010)

skc said:


> IIF actually made an announcement a few weeks back regarding an approach from GMG. So a takeover was in the works.
> 
> Sorry to talk fundamental in the technical thread. But perhaps a quick glance of recent announcements might be of help this time.




Saw that skc, you still have to protect yourself though from sudden down turns in price movement which are a factor when you buy any stock.

Its not a case of fundamentals vs technical. One of the best methods of entry is capturing a breakout, most times it works as this did when it broke in the low 40's. When a stock runs up and then starts to wane it is then time to put a stop in a position that captures the majority of the profit if it has an out of character move.

On other stocks such as IAU or JML etc you can stay further away from the action and below where others are likely to have their stops, give the stock room to take a breather prior to their next run up but when you suspect that things are changing the you need to alter your setup.

I could probably put up a chart such as CPL (where the IIF funds now are) on a daily basis but it would be of no benefit to anyone and would probably border on ramping anyway.

If tech/a reads this he will correct me I am sure but I think his idea for this thread was to put up the good and the bad, ie the winners and the losers and if possible why a candidate became either.

IIF and CPL charts below

(click to expand)


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## tech/a (28 October 2010)

> If tech/a reads this he will correct me I am sure but I think his idea for this thread was to put up the good and the bad, ie the winners and the losers and if possible why a candidate became either.




Yes
Commentary on why a breakout trade worked/why one failed or did nothing.
What we can do as traders to spot in advance technical conditions which enhance or detract from a trade.

Better still a platform where traders can post charts realtime and discuss/demonstrate or simply practice on analysis.

Perhaps even designing a breakout set of rules to develop a system---Mind you I already have a few of these systems.---but for those who dont----.

IIF 
How about the Double top?


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## Synergy (28 October 2010)

Posted a chart of BAU a couple of days ago....

Looks as though the low volume pullback after the initial break has worked wonders and it put on 20% today.

Volume suggests it isn't over stretched and it traded above 30c all afternoon so positive signs looking forward .

The 1 year chart suggests this has further to go, but another couple of consolidation days above 30c would not be a surprise.


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## tech/a (28 October 2010)

Great chart Synergy and terrific insight.
For those who perhaps didn't see it clearly.
Worth having a scan to find these. Could be worth finding a few to follow.

CLICK TO EXPAND


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## It's Snake Pliskin (29 October 2010)

Joe Blow said:


> Hi Snake,
> 
> I think charts really help to illustrate ideas and concepts and it would be preferable to have both if possible.
> 
> What sort of problem are you having posting charts? There are plenty of free image editing applications such as Irfanview that work fine with Vista.



Hi Joe,

Thanks for the advice. The problem is I don't know Vista well, totally useless with computer action and forget how to do things if not done regularly. I'll explore Vista and explore the other sites that I didn't know existed and use them to edit. It will take some time, though. Thanks for the link.

Cheers...


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## $20shoes (29 October 2010)

It's Snake Pliskin said:


> Hi Joe,
> 
> Thanks for the advice. The problem is I don't know Vista well, totally useless with computer action and forget how to do things if not done regularly.
> Cheers...




Vista and windows 7 have their own image capture utility - Snipping Tool.

Open Snipping Tool by clicking the Start button 
	

	
	
		
		

		
			





, clicking All Programs, clicking Accessories, and then clicking Snipping Tool.

More detail here:

http://windows.microsoft.com/en-US/windows-vista/Use-Snipping-Tool-to-capture-screen-shots

That's the hard bit done, Snake. Now there's no excuse 

--------------------------------------------------------------------
will contribute when i have some patterns to show. Interesting thread.


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## Boggo (29 October 2010)

A follow up from the chart here https://www.aussiestockforums.com/forums/showpost.php?p=588151&postcount=17
Its had its little breather over the last few days, now on its merry way today.

Looks like there are a few others that have been mentioned here taking a rest today and testing short term support.

GXY example below

(click to expand)


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## white_crane (29 October 2010)

Hopefully this is a better example (than UXC).  It's SDM and it broke out yesterday on a 2 year high.


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## Boggo (30 October 2010)

I just thought I would put this up for discussion/analysis.

The chart is CAH.
The software has identified it as a potential ABC correction, the C=A which is preferable and the overall retracement is in the zone.

Based on the pattern to this point the software has projected a minimum target of 2.31 with a R/R of 3 if it is reached (out of sight further up the chart is a typical projection of $2.55).

The second last volume bar (highlighted) has been identified as being of significance (VSA influence) as indicated by turning red.

There are a number of positive signs on this chart but there is the underlying influence of the market correcting the sector containing a lot of these stocks over the last few days which will likely continue into Monday.

(click to expand)


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## tech/a (30 October 2010)

Boggo said:


> I just thought I would put this up for discussion/analysis.
> 
> The chart is CAH.
> The software has identified it as a potential ABC correction, the C=A which is preferable and the overall retracement is in the zone.
> ...




Happy to discuss it but its not a breakout perhaps we should have a "Technical opinion on charts" thread


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## explod (30 October 2010)

tech/a said:


> Happy to discuss it but its not a breakout perhaps we should have a "Technical opinion on charts" thread




Agree, but to include general chart analysis would be good in my view.

Always appreciate your instructive input Tech.


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## $20shoes (30 October 2010)

COE - a lot going on volume wise. 

I am labelling the correction from point 4 onwards as a broadening formation. Another week or so of this type of correction might see me lose interest in this one. For now, I'll watch for a breakout in the next few days trading. Another rejection at 46.5 should be interpreted as a sign of weakness.  

I have shaded in some supply/buy zones that seem important. 
The blue rectangle extending from A continues to throw its shadow.
Heavy volume on a wide ranging day at "0" became a resistance point at "B". (Anecdotally, you often see the first test back into the large volume range fail, because buyers locked in on the losing side are often grateful to exit at break even once the price action comes back. You often need a gap up to see these latent suppliers withdraw at the break even price range). The failure to penetrate at B sets in a price collapse. 

Just prior to "1" there is a surge in volume. The candle closed well off its highs, but the next day's candle suggests buyers are overcoming the supply. The excessive volume at this point is of concern. The sheer volume required to move the stock risks a level of exhaustion. In fact, we see a gap up at 3 on high volume that is sold into. We can assume that the selling pressure came from both locked in buyers around "A" and "B" and from "smart" money noticing the background selling ( and perhaps involved in the initial supply also). 

We know that "3" was an offload day because the next day is down, and the break of resistance at "4" elicits no real volume and the move is subsequently faded. However, the correction has been shallow and the volume has been subdued. 

What is now of interest is the support point @ 43.5 to 0.44c. You can see the last few days has seen attempts to penetrate support on increased volume, which appears absorbed ( support is holding). 

Friday sees volume entering on a narrow range. This is of interest. Either buying has absorbed supply at this level, or the buying was sold into. We might get our answer in the next few bars. 

What we do have is a low volume correction followed by a volume surge. For aggressive traders, this sets up a possible buy stop @ 45.5 with a stop to sell @ 43. This is still in the correction zone but gives the best R/R. 

A breakout from the broadening formation would be taking out 47c.


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## tech/a (30 October 2010)

My opinion of CAH given that yesterday was less than convincing going on with the test.
Note the gap down high volume bar ZONE is from the close of the day before to the low of the trading day.As can be seen both zones proved difficult for price to get through.It appears Selling dried up more than buying over powering---There was some above average volume on bars clearly indicating buying and the breakout bar in the first Zone was also on above (Not spectacular) volume.

Click to expand


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## Boggo (30 October 2010)

tech/a said:


> Happy to discuss it but its not a breakout perhaps we should have a "Technical opinion on charts" thread




Correct tech/a, not really in keeping with the intention of the thread other than from a potential eventually (I hope) breakout.
I will post it up again when it breaks out in just over a week 

Thanks for the VSA etc input though, interesting.


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## tech/a (31 October 2010)

> I will post it up again when it breaks out in just over a week




Bought a rye smile to my dial!!

*Shoes*
COE really is reacting to volume zones as expected.
There just doesnt seem to be that effort required to accelerate the stock forward.
It just keeps getting bogged down by sellers as it stumbles forward.
Excellent commentary on your analysis.


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## $20shoes (31 October 2010)

tech/a said:


> Bought a rye smile to my dial!!
> 
> *Shoes*
> COE really is reacting to volume zones as expected.
> ...




Yes, the onging supply could be a problem. Given the large volume on Friday, an up move from here should be efficient ( that is, require little volume to push it). If we continue to see higher volumes as it ranges around, I'd be wary. 

It's not the prettiest developing pattern, and I will lose interest if it continues to meander around for another week. 

For the sake of posterity, let's assume the trader takes a position at 45.5, and I'll continue to analyse why the potential breakout is looking good or shaky.


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## tech/a (3 November 2010)

Thought Id go back over charts mentioned and add to commentary.
Charts only posted if there is something interesting to show.

CAH As expected now in the resistance zone without any real buying to launch this stock to new highs.Has been a good 30% in the move since noticed.

BMN consolidating as expected after its strong move up.Testing the high nothing to report just yet.

VOR as expected was a poor example

BRM
Powering along nicely and proving a solid move can continue to occur without strong volume.



GXY consolidating and not showing signs of anything much.

Bau 
Interesting and could be a potential candidate for some addition to a position.
The correction is a little deep indicating some ranging before a direction is found



WHC doing well.
UXC struggling
HIG not showing a tendancy towards weakness but not going on with it either.
SDM
testing highs with a good reversal today on very little volume-- so not much selling


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## $20shoes (3 November 2010)

We'll scratch COE here as well. Further weakness set in after the large volume day and the broadening pattern is morphing into something else. No need to stay interested in this one. Better opportunities await...


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## Boggo (3 November 2010)

Just one of a dozen or so that have appeared between last night and tonight.
This is SAR and I bought into this today when it looked like it was going to close strongly above yesterdays close.

My initial glance and quick view thoughts (Tue 2nd) when I see this type of setup come up in my scan, ie, first view last night to decide if its watchlist worthy.

1. Its in an overall uptrend and has had a slight correction which would have triggered a few stops and added to the downward correction.
2. Price pattern has a support level not too far from current price.
3. The potential 'real' resistance at 68 to 70 is far enough away from entry to allow me to exit without loss or with minimum loss if either the stock or I change our minds.
4. There is a possibility of short term resistance at around 65, if it turn down at that point it could form an ABC correction and if C = A then it could drop to low 50's but based on the previous upward momentum I expect it to plough through that.

Summary, does it go in the watchlist - Yes, has it got an obvious exit area - Yes
Where would I buy it - anywhere above today's ( Tue 2nd) close if that looks like holding.

Procedure followed, I now hold with the possibility of buying more on a break of 70.

My basic procedure and my 

(click to expand)


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## It's Snake Pliskin (4 November 2010)

tech/a said:


> Thought Id go back over charts mentioned and add to commentary.
> Charts only posted if there is something interesting to show.
> 
> CAH As expected now in the resistance zone without any real buying to launch this stock to new highs.Has been a good 30% in the move since noticed.
> ...



Tech just on the top chart in your last post I'm assuming your signal bar is the breakout bar? If so do you have an entry rule being the signal bar is the breakout bar? Or would you wait for a confirmation of a confirmed break that hasn't failed?


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## It's Snake Pliskin (4 November 2010)

$20shoes said:


> Vista and windows 7 have their own image capture utility - Snipping Tool.
> 
> Open Snipping Tool by clicking the Start button
> 
> ...



Thanks $20shoes for the information.


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## tech/a (4 November 2010)

It's Snake Pliskin said:


> Tech just on the top chart in your last post I'm assuming your signal bar is the breakout bar? If so do you have an entry rule being the signal bar is the breakout bar? Or would you wait for a confirmation of a confirmed break that hasn't failed?




Here is tech's method of trading Breakouts.
Not entirely disclosed but will be good enough.

(1) I have 2 searches (A) Searches for the first occurrence Using a "latch" of a breakout within the search parameters for the entry for Tech trader so the Formula is public knowledge certainly in Metastock.
I take the majority of my trades from this signal.

(2) (B) Searches for any occurrence of the formula breakout (No latch) I take some trades from this search. but mainly look for "Boggo" type entries on these due to the trade already being underway. It also alerts me of continuation breakouts of stock I already have.
Stops are set at the closest major pivot low.

(3) I pyramid trades quickly if (1) I see a short pullback of 2-5 bars not too deep and very low volume on the pivot Ill buy day after the rise above the pivot and set the stop at the Low volume pivot low,Treated as a separate trade.

(4) I pyramid at the very first higher high from consolidation after the initial trade. Stop at the closest pivot low and this is also a separate trade.

This is NOT easing into a position all positions are full sized trades based upon Fixed Fractional Position sizing.

Exists are
(1) I have a time exit
(2) I have a profit stop exit
(3) I have a discretionary exhaustion signal exit.
(4) I run a trailing stop behind intermediary pivots.

There you go have a play with that.
All Codes are on "that other site".


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## Boggo (4 November 2010)

> Here is tech's method of trading Breakouts.
> Not entirely disclosed but will be good enough.




Sounds like we are pointing in the same direction tech/a (pardon the pun  ) 

Another example perhaps, this is KZL.
It ticked most of the boxes a couple of nights ago but is still in observation mode.

It has a significant hurdle ahead of it but its trying, just thought it may be worth watching to see what it does.

(click to expand)


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## Boggo (4 November 2010)

Not all go to plan and some I just lose patience with

I have previously had a good run on IDL, got stopped out and then re-entered again.
This time however the _*time without action*_ has become a factor in my tightening of my stop position and the short excursion to 44.5 was enough to say bye bye for now.
I have done this in the past only to see the stock turn up and run but I have seen the opposite occur more too.
I would now like to see it break down to an ABC pattern with a target of around 41.5 but if it turns up it will get my interest again.

Took a small loss on this but if its not going up then its just tying up funds that could be used elsewhere.

(click to expand)


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## It's Snake Pliskin (5 November 2010)

tech/a said:


> Here is tech's method of trading Breakouts.
> Not entirely disclosed but will be good enough.
> 
> (1) I have 2 searches (A) Searches for the first occurrence Using a "latch" of a breakout within the search parameters for the entry for Tech trader so the Formula is public knowledge certainly in Metastock.
> ...




Tech,
I wasn't after all of that. Just interested in the chart at the top. Which bar is the entry and is it the signal bar or are they different?


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## tech/a (5 November 2010)

Sorry Snake too much info.

The condensed version


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## It's Snake Pliskin (5 November 2010)

tech/a said:


> Sorry Snake too much info.
> 
> The condensed version



Thanks Tech, pretty much new they were breakout bars. But, would they be your signal bars too?


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## tech/a (5 November 2010)

Both are and I have 2 full positions in the trade.


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## tech/a (6 November 2010)

Thought Id post a common dilemma Breakout traders face.
this is how I handle it.
I'm using a current trade as an example WHC
*Click to expand.*


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## Huitzii (7 November 2010)

Firstly I would like to thank everyone for their contributions to this thread with special thanks to tech/a.
I love reading this thread....it has opened my eyes so much in the last few weeks.
Here is a chart of a trade im currently in, KGL
If this sees a drop tomorrow to 19.5 I may top up....just wait and see
This one has gone sideways in the last week after a rise last Monday.
I have a STOP @ 18.5.
Im expecting a rise tomorrow considering its volume in the last week was significantly up from the previous week and holding ground, suggesting a drying up of sellers.
Any input or discussion is welcome.
Cheers Huitzii


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## tech/a (7 November 2010)

Fridays bar was a test.
How it unfolds will determine your next move---if any.
All looks pretty standard for a continuation.
Very low volume on reversals.
Your right 19.5c should act now as support.


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## Huitzii (8 November 2010)

Thanks for your reply tech/a.
Here is another chart that im watching closely.
I think that today will be the test to see if REY has what it will take to go on with the job.
A rise on highish volume will put it in my buy list.
Open for discussion as per usual


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## tech/a (8 November 2010)

Some interesting trading today with profit taking starting at around 2pm
My portfolio dropped like a stone from a very pleasing increase to a moderate one.
*BRM* has been outstanding and its chart is similar to many today so comments on this one similar to a lot of charts.
*KGL* crashed through support so if you waited you'd be pleased.Still within its trend so worth being on the watchlist.
*REY* still cooking.
*DML* had a huge aggressive reversal but still within the trade.


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## Huitzii (8 November 2010)

BRM looked like it was going to head for the stars this morning but as tech said it had a moderate pullback this afternoon but still looks the goods.
KGL had a quite large retracement today, I removed my stop loss to see what happens on open tomorrow....any drop and I will be out of this trade.
The new stop is 18.0 which should also be the new support.


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## tech/a (8 November 2010)

> I removed my stop loss to see what happens on open tomorrow....any drop and I will be out of this trade.




If you had a stop at 18.5 then you should now be out of the trade.
If you move a stop its not a stop.
Fear of loss often up grades in these instances to the reality of a larger loss.
Get used to losses as you'll have plenty but at all costs minimise them.

Id like to know when you entered and why you chose 18.5c as your stop.
How you position sized.
Only as an exercise on managing a trade like this.
I'm being harsh but the market will leave me for dead!!

Dont know where your getting your data from but my chart is very different to yours.
Logical stop (now) is 15.0c


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## Huitzii (8 November 2010)

tech/a said:


> If you had a stop at 18.5 then you should now be out of the trade.
> If you move a stop its not a stop.
> Fear of loss often up grades in these instances to the reality of a larger loss.
> Get used to losses as you'll have plenty but at all costs minimise them.
> ...




I removed the "stop" because it was late in the day and I can still sell early tomorrow at the same loss.
i work all trades on a 10% risk/loss ...i entered at .205, so a .02 drop will be my stop.
If tomorrows open sees a .05 drop i will be out.


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## Huitzii (8 November 2010)

i just noticed that there are some days missing from my data....14th/10 to 26th/10    hmmmmmm
time to check it out.
my data comes from netquote "end of day data"


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## tech/a (8 November 2010)

Huitzii said:


> I removed the "stop" because it was late in the day and I can still sell early tomorrow at the same loss.
> i work all trades on a 10% risk/loss ...i entered at .205, so a .02 drop will be my stop.
> If tomorrows open sees a .05 drop i will be out.




Not if it gaps down.
Ok
I wouldn't trade smalls in that way but if you've tested it and your happy with your R/R --- then its not for me to say.


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## Boggo (9 November 2010)

Just a bit of an update on some previous charts/setups.

First is CAH, its still hanging in there as nice swing trade setup and it has also popped up in my Metastock scan as a 'look at me' pattern.
(Note to self - remind tech/a when it breaks out  )
https://www.aussiestockforums.com/forums/showpost.php?p=588911&postcount=42

Next was SAR, this was used as an example of my procedure, as predicted it is struggling around the 65 area but still looking positive.
https://www.aussiestockforums.com/forums/showpost.php?p=589671&postcount=52

Next is KZL, still having difficulty getting away from the former resistance but seems to be on the right side of the line.
https://www.aussiestockforums.com/forums/showpost.php?p=589734&postcount=56

In an earlier post I mentioned that I had sold out of IDL, basically it was going nowhere and that is still the case, it would have just continued to tie up funds that could be better used elsewhere.

A few new additions to the list are IAU (got stopped out recently after a great run), SRL, PXS and IPL.

Charts of CAH, SAR, KZL and IAU below.

(click to expand)


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## tech/a (9 November 2010)

These are my holdings on my breakout portfolio.
I started this in earnest after I came back from FIJI 3/10/10
I only had 2 held over before.
I post this just as a matter of interest.
Its constantly being added to and stops triggered as those which stay as keepers work their way into my held stock.
On a $75K account its currently with the open profit shown which varies.


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## Synergy (9 November 2010)

Keen to get some ideas on the RSL chart below...

Interesting chart actually. When is what looks like a low volume dip actually the start of a bigger move down? I don't mind that it has come back down and touched the double top highs of sep and oct, but are there any signs of the upwards trend continuing?


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## Tekwrek (9 November 2010)

Huitzii said:


> Thanks for your reply tech/a.
> Here is another chart that im watching closely.
> I think that today will be the test to see if REY has what it will take to go on with the job.
> A rise on highish volume will put it in my buy list.
> ...




Breathtaking, THANKYOU!


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## tech/a (9 November 2010)

*REY* Jumped off the stove. Id expect an inside day
*RSL* has some life but needs to show that this support will hold.
Would like to see a solid rise.


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## Huitzii (9 November 2010)

Fortunately for me KGL saw an increase of 8.11% on open and saw me out of a scary trade @ .020
REY saw a nice rise of 28% and backed into 16% on close..tomorrow is a raffle, maybe its up but maybe some temperory retracement on the large tail today,the new day will tell....im partialy influenced to think that REY will continue for another reasonable  day on medium volume.
Any input tech?
By the way tech i dont mind you scalding me at times, I do understand and respect your opinion, im just at an intermediate stage atm 
just my


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## Mickel (10 November 2010)

Hi to all on this thread. I'm a long time holder of LNC. As you can see from the attached graph it has recently taken off with 5 consecutive days of increases of 4% +.

I'm wondering if anyone has had it on their watchlists and, if not, what are the criteria that it doesn't satisfy.

I mention that Mr Z posted on 15/9/10 and predicted that it would have a bottom of $1.70 and after reaching $1.95 it would rise to $2.50 with only slight resistance around $2.20. This has come to be spot on.

If anyone has a view on what it is likely to do over the next few months based on the charts, I'd like to hear it.

Thanks 

Mickel




http://pco.paritech.com/paritech_ch...&exchange3=NASDAQ&DateTime1=119201011:28:47PM


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## tech/a (10 November 2010)

*REY* 
I expect an inside day then look for developments after that---either way.
*LNC*
In the short term I feel its made its high.
looking now for a corrective move off the wave 5 high.
Weekly shows this as a wave 3 top so more to come on the upside in the future.
Click to expand
First chart is Daily and second weekly *LNC*


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## tech/a (10 November 2010)

*REY* and* LNC* behaved as expected.


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## Ashsaege (11 November 2010)

BTV in my eyes is looking like an ideal trade set up. A nice rising wedge formation.

Volume has dropped off too.


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## Mickel (11 November 2010)

tech/a said:


> *REY* and* LNC* behaved as expected.




Thanks Tech/A.

I'm looking for a S/P over $3.00 by Christmas with hopefully some good news by then. How likely do you see that occuring?


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## jancha (11 November 2010)

Ashsaege said:


> BTV in my eyes is looking like an ideal trade set up. A nice rising wedge formation.
> 
> Volume has dropped off too.




When was that taken from?
Didn't they change the code to SHD a month ago?


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## tech/a (11 November 2010)

Mickel said:


> Thanks Tech/A.
> 
> I'm looking for a S/P over $3.00 by Christmas with hopefully some good news by then. How likely do you see that occuring?




If it plays out to the Weekly wave count then its likely--keep reveiwing


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## tech/a (11 November 2010)

*BRM* 

Nice suprise.
Hoping on the breakout and getting hit by the train.
Technical buy Fundamental train!


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## Boggo (11 November 2010)

Excellent, well done tech/a.

I love one of the comments on the BRM thread "I did'nt see that one coming".

The charts tell the story again.


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## adobee (11 November 2010)

IBG  - seems to have good breakout would like to hear feedback of those who understand the charts ... cheers


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## Ashsaege (11 November 2010)

jancha said:


> When was that taken from?
> Didn't they change the code to SHD a month ago?




yeh they did, sorry. Only just found that out this morning while on ASX. But the chart is the same


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## $20shoes (11 November 2010)

tech/a said:


> *BRM*
> 
> Nice suprise.
> Hoping on the breakout and getting hit by the train.
> Technical buy Fundamental train!




Interested in how some of you handle takeover price re-ratings from a trading rules perspective. It's one time where a trailing/technical stop is possibly not the best exit criteria. 
I usually close my position at market simply because I don't have a trading rule that considers the fundamental pros/cons of the takeover announcement.


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## tech/a (11 November 2010)

*Shoes* I trail a stop 50% of the range of the breakout bar from close to high.I'll move the stop up as a new high is made.If a clear new pivot low is made then that's where the final trailing stop will go.
If stopped and a new high is made I'll buy back in with the closest pivot low as the stop.

*USA* I like the Set up and opportunity for a nice close stop and position sizing.
low volume rising (I have found) has less of a tendency to have a volatile swing back on you.
*NSE* is very similar but not the stand out


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## tech/a (12 November 2010)

Sorry I'll correct the *GLARING error *in the *BRM* chart.
My trailing stop is $5.40---50% retracemment of the gap plus high of yesterdays bar.

Thought the sharpies would have caught this error!


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## Boggo (12 November 2010)

A cheapie from the ASX300 that looks like it could be about to break through a line of resistance.
We need to see another line at 15c become support, yet to be confirmed.

(click to expand)


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## Boggo (26 November 2010)

Boggo said:


> First is CAH, its still hanging in there as nice swing trade setup and it has also popped up in my Metastock scan as a 'look at me' pattern.
> *(Note to self - remind tech/a when it breaks out  )*




Don't hold your breath tech/a, could be a while before I get back to you


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## Lucky_Country (26 November 2010)

ARH on a roll.

Iron ore hopefull with possibly Australias richest man in control Clive Palmer.

Big volume and big jump must be on alot of radars today.


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## tech/a (26 November 2010)

Lucky_Country said:


> ARH on a roll.
> 
> Iron ore hopefull with possibly Australias richest man in control Clive Palmer.
> 
> Big volume and big jump must be on alot of radars today.




Lot to like about this.
If you missed it today like I did I expect an inside day on Monday and more opportunity later.


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## Boggo (30 November 2010)

RRL meets most of my requirements, its running into the expected resistance (double top ?) at $1.95.

My current resource holdings are CDU CPL IAU IRN LNC LYC with all entries based on a breakout.

RRL may be added (again) soon.

(click to expand)


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## tech/a (30 November 2010)

ARH
Low volume pullback 
I expect 50-61.8% pullback.
25-27.5c

Boggo

mine are
BTU*
CPL
DML
INQ*
JMS
MSB
YTC
PUN
ARH (Pending Stop order)

* Time and Gain stop prospects.
If they dont move X by time Y then Out they go.


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## Boggo (30 November 2010)

tech/a said:


> * Time and Gain stop prospects.
> If they dont move X by time Y then Out they go.




I too have adopted that attitude recently, too many good movers popping up, no point in tying up funds while sitting just above a stop on something that cannot make its mind up when other opportunities are presenting themselves.


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## Boggo (19 December 2010)

Just for something to do while watching the rain pouring down outside 

Three charts, two different analysis methods, two different time periods, three potential buy opportunities but all on the same stock.

I am not going to go into detail on my method as that has been covered on the first page of this thread.

First chart is an EW analysis scan result. Basically this software works backwards and finds potential setups, in this case a TS3 which is a generic ABC pattern (usually a wave 2 or 4).
(The entry quantity etc are automatically produced based on my settings of a $20k account controlled by a 2% risk)

The second chart recent action has an entry in late Oct stopped out in mid Nov, then another entry just after the entry shown on the first chart. That entry has remained intact using the same stop as the first chart and has been followed by two more signals (note the volume - one for tech/a to expand on )
The breakout I expected happened on Fri and the heads up was on Thursday's bar imo.

My weekend weekly scan has brought up chart three.
This chart shows potential for a breakout but also an area of potential resistance.

Where to from here, we wait and see. I just thought it would be an interesting sequence to post on this thread.

(click to expand)


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## $20shoes (22 December 2010)

tech/a said:


> ARH
> Low volume pullback
> I expect 50-61.8% pullback.
> 25-27.5c




Took off again today on volume ( I hold). My existing positions continue to do well, but my scans have been turning up bugger all last two weeks.


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## toocool (27 December 2010)

Hi, 

I made my first technical analysis trade (well... of my own analysis anyway) on SSM  the other day in at 60c.

Any thoughts from you guys on the trade/chart would be great to see if im getting the grasp.

I guess its a ascending triangle on declining volume... basically...


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## tech/a (27 December 2010)

Hi T/C

I think its pretty good as a potential.
Its seem a strong gap and volume to resistance.
From here the next few bars will tell.

Click to expand


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## tech/a (29 December 2010)

I've been asked by a few how I exit my discretionary trades.
As I trade breakouts I thought I would include it in this thread as I use both exits and time stops which are based around technical price and volume action.
Not only to exit but also a pre screening to select a stock for trading (as there are far too many breakouts to trade all of them.)

But also to monitor or manage a trade. 
Why stay in a trade during a pull back?
Why sell a trade before its stop is hit?
Why add to a trade during an up move/consolidation/correction?

While I Dont profess to get it perfectly correct every time---I Dont----There is always the continued management of a portfolio both during a trade and often monitoring those trades that have been closed for re entry if the situation arises.

There are quite a few situations and as time permits Ill post them up with charts.
Here is the first and NUMBER 1 exit set-up!
Click to expand.




I welcome comments and hope this is helpful to fellow traders.


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## tech/a (29 December 2010)

The second non negotiable exit is the Lower High Lower low swing exit.

Those of you who follow Brent Penfold my see a similarity in his thinking and my own.
See if eventually you can pick it.
I didn't know of his "thinking" until I read his book "Universal Principals of Successful Trading".I certainly didn't know of him when I designed TechTrader.

Click To expand


----------



## explod (29 December 2010)

Top thread and well done T/a

Another who uses pivot points is Daryle Morley, a trader of nearly 50 years.  Has a column in the Herald Sun on Wednesday's business section.  Have attended one of his seminars.

Have no connection to him but what I have learned has been invaluable to me.  Worth a look in my view, you can never have enough angles in this caper.

Can check him on daytrader.com


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## tech/a (29 December 2010)

Here is an example of a trade I WOULDN'T take in a scan 
and one I would. This generally sorts the trees from the forest.

Click to expand


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## Boggo (30 December 2010)

My Turtle breakout system would have me long on both of those tech/a.

I only scan the S&P ASX300 so I wouldn't have found them though.

(click to expand)


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## Boggo (30 December 2010)

Any views on this tech/a, would you enter or would you increase your holding if you already held ?

(click to expand)


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## tech/a (30 December 2010)

Its one I would classify as 5-6/10.
It appears to be selling pressure and would need to see a clear breach of resistance to buy or add.
If I was in the stock Id be seriously looking at taking a profit on any turn down from here.
Not because I think it could reverse but I feel it would be inclined to range. So better prospects elsewhere.


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## Boggo (30 December 2010)

Nice work tech/a, your first chart pick is stalled and your preferred pick is up 14%.

Mine is up 8% with a bit of 'we love what the chinese love' sentiment driving it.


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## tech/a (30 December 2010)

Boggo said:


> Nice work tech/a, your first chart pick is stalled and your preferred pick is up 14%.
> 
> Mine is up 8% with a bit of 'we love what the chinese love' sentiment driving it.




The pattern is very similar to PNA.
I know its not yet I have PNA!


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## Boggo (30 December 2010)

tech/a said:


> The pattern is very similar to PNA.
> I know its not yet I have PNA!




LYC


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## tech/a (30 December 2010)

*SAVING OPEN PROFIT*

We have all been there this is what I do with trades which have flown!!
 I can always re enter.
I often do but find its wise to get out earlier than later.The key is to identify stocks rising exponentially.


This is one I'm trading UNX
Click to expand.


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## Boggo (30 December 2010)

I use an ATR formula for the red line and I apply a hit and run approach to these type of trades, ie buy, trail, exit and move on. You can easily give back 50% of your profit on this type of run up if you don't stay on its tail.

My  below on UNX chart.

PS. I just noticed a typing error on the chart, the stop would be set at 0.635, not 0.625.

(click to expand)


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## tech/a (30 December 2010)

If you have a look at JMS
You'll see where I sold and why I bought back in with less risk.
Ill post a chart after a swim in the sea.
Its damned hot!


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## tech/a (31 December 2010)

*Re ENTRY or HOLDING AFTER A PULLBACK*

I think this is one of the most important aspects of any form of trading---when your in a trade you want to know if its wise to hold and if the trend is likely to resume OR you've sold out on a trailing stop and the reversal stalls---Should I buy back in and How?

This is what I do.
Click to expand.


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## tech/a (31 December 2010)

If there is one thing I know with absolute certainty.
Stocks which rise vertically wont continue to for very long.
LEG was one of those This morning I trailed a stop .005 behind it until it folded back on me at .93c---great end to 2010

Click to expand---sorry about the indulgence!


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## tech/a (31 December 2010)

Further to the UNX example above.
Topping off a nice year.

Just one thing Id like to pass on to those trading breakouts.

*When profit is there take it* Dont watch it dissolve or worse turn into loss.
If it turns out to be premature then you will be able to re enter,provided you have a re entry strategy.

Click to expand


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## Boggo (31 December 2010)

Nicely done tech/a.

I am hoping that the next six months will be as good as the last. It has taken a bit more hands on work than normal but obviously that is what is required.
The main winning factor has been not tolerating anything that is not making a profit, just in the ASX 300 there are new opportunities everyday.

Stopped out of EHL today at 1.08, have had a few good runs on it in the past but if it ain't going up its out.
WTP is a couple of cents from its exit, CGG has been on the border for a while now but it had a little run up today.

(click to expand)


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## tech/a (31 December 2010)

> The main winning factor has been not tolerating anything that is not making a profit,




This is a very wise realisation one that will keep you involved in placing yourself *CONSTANTLY* in front of new opportunities (The *TRAINS*) and every now and then one or more will take off and take you with it!

Constantly monitoring your portfolio will see non performers cut.
Trades exited *BEFORE* their Stop is hit! (I rarely see a stock hit its stop If it doesn't launch in a few days I Dont want it around so will exit well before stop!) Sure I get it wrong but when I do it *WILL* turn up again in my scans!

I've posted shots of my portfolio a few times and do again here.

My hope is that there are some who can see the trade management which is constantly being administered to the portfolio forever working on maximising expectancy. small losses and good sized profits.




Have a great New Year fellow breakout traders!


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## mr. jeff (31 December 2010)

tech/a and boggo, 
Don't know how I missed Uranex with your postings... nevertheless an admirable trade there.

Your trading style is excellent and I appreciate the effort you put into your postings. Helpful. It never hurts to have to spell things out just to confirm you know them yourself, but reading reminders about cutting losers is something that NEVER gets old!

Hope you guys had a good profitable year.


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## tech/a (2 January 2011)

Breakout trading is one of the most popular forms of trading. My favourite for stock trading.I Dont use it at all for Index futures!!.

*Breakout trading falls into **4 F'S* *once you take a trade*.
The first 2 are similar and the sort of trades we want.
The second 2 are similar and the type of trades which frustrates breakout traders.
Both pairs need to be traded to maximise potential profit/loss both at the beginning and pointy end of a trade.
While I'm not going to spell out *EXACTLY* how I maximise each end there will be more than enough for you (If you think beneficial) to incorporate into your trading. 

*The 4 F'S*
*(1) FLY
(2) FLOW
(3) FLAT
(4) FAILURE*

Below is a short discussion on the first 2 and accompanying charts.
These 2 F's provide the profit to your portfolio and the management of ALL 4 F'S will add a great deal to your expectancy over a number of trades.

CLICK TO EXPAND







Ill post up the other 2 (And the most important in terms of Trade and portfolio management) when I have some clear time.
I hope these hints on practical application of a trading method help those who share a passion for breakout trading like myself.


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## Lone Wolf (2 January 2011)

tech/a said:


> Breakout trading is one of the most popular forms of trading. My favourite for stock trading.I Dont use it at all for Index futures!!.




What is it about index futures that makes them unsuitable for breakout trading? More likely to be caught in a false break?


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## tech/a (3 January 2011)

Lone Wolf said:


> What is it about index futures that makes them unsuitable for breakout trading? More likely to be caught in a false break?




This is a whole new topic but in short.
Support/Resistance and fading wide range Very high volume bars is my preference.


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## tech/a (3 January 2011)

Before I go onto the last 2
(3) Flat
(4) Failure.

I want to pass on the single most influential factor in profits I have seen and can personally attest to.

*PORTFOLIO MANAGEMENT*

As discretionary traders we CAN and SHOULD constantly manage our portfolio-- Mechanical traders are not as fortunate they MUST and SHOULD follow their proven System to achieve their Tested Expectancy .

*THIS MEANS* as discretionary traders we work relentlessly at skewing our portfolio's expectancy higher.---in every trade intraday/daily or as our discretion demands it.

*How is this done?*

(1) More winners
(2) Less losers
(3) Smaller losers
(4) Bigger winners
(5) HIGHER FREQUENCY TRADING

I have already demonstrated one way of milking maximum profits from a move which turns exponential.

Now with (3) Flat prospects and (4) Failures we will look into Smaller losers/and importantly Higher frequency trading.

While I have placed this in the breakout thread it is important for ALL discretionary trading methods to understand---and implement.


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## tech/a (3 January 2011)

So to 
(3) Flat
(4) Failure.

Personally when I take a trade I want to see it conform to my analysis and in this case it should be a breakout which *CONTINUES*.

I place my trade using Fixed fractional position sizing using a pivot/Low of a particular volume bar/the previous High of a gap breakout as my stop level. This will govern my position sizing.
I'm am highly likely to exit BEFORE the stop is hit but NEVER after it (Slippage accepted).

So we place a trade then over the next few days it stalls---goes FLAT!
The question is do we continue in the trade?
Do we hold endlessly until it hits our stop or do we look for an exit and take it!

For me the answer is simple.

If the trade doesn't move in my direction within 5 periods and or the consequential price action doesn't clearly point to a continuation of the breakout then I will exit.
I choose 5 periods as *Volume Spread Analysis* only stays valid for the bar in question (In this case the breakout bar) for 3-5 periods---unless in that time a bar of the next 3-5 exhibits clear indication that the breakout will continue ---then I exit at the highest price I can get that day regardless of my trade being in loss but not stopped out OR in profit---yet flat.

CLICK TO EXPAND
*



Its been my experience that the trade off between lost (Potential) profit and another opportunity at another breakout is well weighted to taking another opportunity rather than sitting waiting and waiting and waiting----

The chart enclosed is of an actual trade.
You'll note that while recorded as a loss my stop $1500 was never remotely challenged 
but the loss was recorded at $116 plus $6 brokerage. Not even a drop in the ocean.

CLICK TO EXPAND



Although I set my position sizing on a $1500 stop level my average loss is $396
My average win is $2320---- (Last time I did the figures. In Nov)
So to me its pretty clear that portfolio management plays a massive role in DISCRETIONARY trading.

There is NO PLACE for set the trade and WAIT and HOPE.
Higher frequency--higher opportunity

TAKE CONTROL

Best of New Years Trading fellow Breakout traders I hope this year brings you record profits and my little Hints Ramble helps some of you out!*


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## satanoperca (3 January 2011)

Thanks Tech/A for the write ups, very valuable and understandable.

Gee, you could setup your own make 300000000% in just 30 days course and charge a fortune instead you offer these tips for free. You are a true gentleman.

Thanks again and keep them coming.


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## tech/a (3 January 2011)

satanoperca said:


> Thanks Tech/A for the write ups, very valuable and understandable.
> 
> Gee, you could setup your own make 300000000% in just 30 days course and charge a fortune instead you offer these tips for free. You are a true gentleman.
> 
> Thanks again and keep them coming.




Yeh somebody will read it here package it up in some glossy crap and it will be in India or China being totted as the next Big thing.

You know if anyone finds this helpful in their trading I would appreciate the feed back --- you can private mail me.
Interested in practical application stories.


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## white_crane (4 January 2011)

Thanks for all the input tech/a and others.  It is certainly very helpful and very much appreciated.

I'm still learning and trying to take it all in bit by bit.

I've had a break from trading over the Christmas period, but if I get the opportunity in the near future, I will post a breakout trade I make.


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## Boggo (4 January 2011)

A couple of daily charts (KZL & CGG) from my scan that meet the eyeball test and have potential.

Both seem to have their own issues, every time KZL has a go it seems to run into a brick wall and CGG is trying to break out of that sideways movement.
(I already hold CGG)

Weekly scan, SLR would probably be the only result to meet the initial eyeball test and the daily pattern is also appealing.

These are not recommendations, just breakout discussion candidates.

(click to expand)


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## luke256 (4 January 2011)

I don't trade these stocks but looks like they are ready for a break out. Often when the daily bars work sideways for a reasonable amount of time it is preparing for a decent break out. 

It should be an interesting one to watch. 




This is a long sideways movement and would be good to watch for a breakout as well:


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## tech/a (4 January 2011)

*Not ALL breakouts are EQUAL.*

My research has proven to me that the above is true.
With absolutely no disrespect for any other posters and their suggestions
I'm seeing ANY breakout pattern as a possibility to trade (true) but if our aim is to maximise return by

(1) Being on those that rise exponentially
(2) Cutting loose those which fail to follow through in a reasonable time.
(3) Filling out trade portfolio with prospects
(4) Being ruthless with those which clearly indicate they will reverse.

Surely *not every breakout* SHOULD be considered?

I'm interested in what makes a prospect one for the portfolio in the mind of others.
Whilst I may not agree please Dont feel like I'm on a witch hunt----
I'm certainly not perfect in my selections but have found a common number of threads to help consistent forward momentum of your portfolio.

Just as a way of demonstrating my point here is a shot of the same portfolio as shown at Close of 31/12 and at 10.15 am Adelaide time.
If you compare the two momentum is clearly continuing (as it is expected by analysis).

As at 31/12/10




Today


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## tech/a (4 January 2011)

Boggo said:


> LYC




Hope your doing well on this now flying!!


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## Boggo (4 January 2011)

tech/a said:


> Hope your doing well on this now flying!!




Yes, going good at the moment thanks tech/a. Some great opportunities have presented themselves with this simple breakout procedure.

I am wondering what the market may do when we get to around 5000, a correction perhaps ?
What are your thoughts ?

My current thinking is tight stops, lock in profits, sit back and repeat the whole process again when the next upturn appears.

(click to expand)


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## Ruby (4 January 2011)

Hi Tech/a,

Thank you for this wealth of information.  I love break-out trades and look forward to a continuation of this illuminating thread.  Do you use this type of trading for FX?

What would be great - though extra work for those posting - would be a second chart not too far behind the first, showing us how the trade worked out.   I know it sometimes means exposing losses for all to see, but we can sympathise (having been there) and learn from it.

Cheers,

Ruby


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## tech/a (4 January 2011)

Ruby Dont mind posting trades after they occur. Meaning FILLED that way any charts wont be seen as recommendations.

I think the interest would or should be in trade /portfolio management.
The thinking behind holding or folding.

You'd get sick of all the losing trades Id post up here.
And you'd pull your hair out when you see one take off again and I Dont trade it!
But you'd also see the ones I do.

Here is a continuation of YTC one I'm currently trading AND posted on the breakout thread.


----------



## tech/a (5 January 2011)

Just thought Id post up a *bad day*.

You'll notice I've done some culling.
You'll also notice that some stops are really close to the price action currently.
The management of each trade is based upon chart patterns and volume on the current chart.
These (stops) will be tightened or relaxed according to the chart.
Codes are not disclosed.


*Click to expand*


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## Boggo (5 January 2011)

Gave back 70% of yesterdays gains today. Stopped out of RRL and USA.
Not sure what went on with RRL, got home at midday and it had obviously had a major spike down through my stop at 2.21.

I am now starting to see a few good opportunities being picked up.

One I am watching carefully for another breakout is IAU, weekly chart of MCR has also got my attention but a few hurdles still exist there.

(click to expand)


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## tech/a (5 January 2011)

Boggo

Whats your thinking re LYC?


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## Boggo (5 January 2011)

tech/a said:


> Boggo
> 
> Whats your thinking re LYC?




I entered LYC on 21/12 on a signal from my breakout system and then added to that on 30/12 on the turtle signal.
https://www.aussiestockforums.com/forums/showthread.php?t=20906&p=600912&viewfull=1#post600912

Usually I would keep a tight daily chart stop on this type of breakaway as we have discussed earlier (see below for stop lines) but I am staying a bit further away from the action on this by applying a stop just below the line on the weekly chart which also coincides with a possible daily support level.

I am being influenced by sentiment towards this stock which is being generated by news such as this extract from Bloomberg USA...

_Rare earth miners outside of China have soared since December 29, when China restricted rare earth exports by 35 percent for the first half of 2011 compared with a year earlier.

Avalon's shares have risen as much as 75.8 percent since China released the quota.

China produces more than 95 percent of the world's rare earth oxides, which are used in a variety of technology applications from electric cars to smartphones and computers.

The quotas have left companies whose products require rare earth metals clamoring to secure supply outside China.

Shares of first-to-market producer Lynas (LYC.AX), which expects to be producing rare earths at its Mount Weld project in Australia within a year, have risen a much as 38 percent since China published its quotas.

Molycorp (MCP.N), which owns the Mountain Pass mine in California and plans to be in full production by 2012, has jumped almost 375 percent to $62.78 since listing at $13.50 in July 2010._

Based on that I am going to give this some room to move around.

I would be interested in your views on LYC though.

(Daily and weekly charts, click to expand)


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## Boggo (5 January 2011)

Ruby said:


> What would be great - though extra work for those posting - would be a second chart not too far behind the first, showing us how the trade worked out.




RRL may be an example Ruby, both entry and exit charts.

(click to expand)


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## Boggo (5 January 2011)

And another example Ruby.

(click to expand)


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## tech/a (6 January 2011)

*Boggo*.
My thoughts on LYC




Also RRL


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## Boggo (6 January 2011)

tech/a said:


> My thoughts on LYC
> 
> Also RRL




Thanks tech/a. Your analytical ability is more specific and more detailed than mine but I think we are on the same page and pointing in the same direction.


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## Boggo (6 January 2011)

A follow up to a previous post
https://www.aussiestockforums.com/forums/showthread.php?t=20906&p=588531&viewfull=1#post588531

and an example of my reasoning in my post on LYC
https://www.aussiestockforums.com/forums/showthread.php?t=20906&p=602281&viewfull=1#post602281

Don't read this as a brag, it is an example of one that continues in the right direction and how I keep up with it.

(click to expand)


----------



## Boggo (6 January 2011)

Stopped out of WTP today for a small loss.

(click to expand)


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## Ruby (6 January 2011)

Boggo said:


> And another example Ruby.




Thanks Boggo.  It makes it much more meaningful to me to see the end result.

Cheers,

Ruby


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## tech/a (6 January 2011)

Seems BOGGO and I are very similar in finding prospects.
CPL is one chart worth bringing up again as its one that both are trading.
 the characteristics of this trade are very important to grasp and you'll see some old favorites again.
(Small Tight Consolidation and a Very Very low volume down bar,gap out to breach the resistance.)





Click to expand


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## Boggo (7 January 2011)

A follow up on USA from my last post 
https://www.aussiestockforums.com/forums/showthread.php?t=20906&p=602308&viewfull=1#post602308

I don't get attached to any individual stocks but when a stock has a strong upward trend I keep tabs on it.

In this case on USA yesterday's low was a significant area. Can it hold or will it continue down to 61.8.
It may be worth watching just for interest.

(click to expand)


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## skc (7 January 2011)

Boggo said:


> A follow up on USA from my last post
> https://www.aussiestockforums.com/forums/showthread.php?t=20906&p=602308&viewfull=1#post602308
> 
> I don't get attached to any individual stocks but when a stock has a strong upward trend I keep tabs on it.
> ...




Boggo, heaps of great stuff on this thread. Thanks for all the time and sharing.

Have you ever considered using peer company or sector index to filter some of your breakout candidates? Just an observation I've made through my own pairs trading which analyse companies against each other.

E.g. USA is a specie uranium company. If many other uranium companies have recently broke upwards, then probability of USA doing the same is higher.

It's probably not very useful for the smallest companies where individual factors are more important (e.g. drilling, corporate rumours), but may be useful for larger firms.

Sorry to bring fundamentals into a technical thread!


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## tech/a (7 January 2011)

SKC

I once made up my own Index Chart of Uranium Companies and used that as an indicator similar in a way (technical) to what your saying.

I lost it and all its constituents in the last Hard drive melt down!
Was handy
Could do the same with sub type groups of your own.
Have done it with my portfolio. (make up my own index).


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## Boggo (7 January 2011)

skc said:


> Boggo, heaps of great stuff on this thread. Thanks for all the time and sharing.
> 
> Have you ever considered using peer company or sector index to filter some of your breakout candidates? Just an observation I've made through my own pairs trading which analyse companies against each other.




Hi skc, tech/a has done most of the work on here, I see where he is coming from with his no nonsense approach to trading and that style of "its either making money or its out" approach is getting great results at the moment and it fits with my preferred method, ie, just simple breakouts.
It does take a bit more end of day involvement than I have contributed in the past but so far its a case of the harder I work the luckier I get.

My only index association is that I only scan the S&P ASX300 but I currently hold two stocks that are not in the ASX300 (AYN and PRR) with their entry based on non technical factors and they are in an account that is probably more of small gambling experiment account.
There are a lot of very tradeable quality stocks below $5 in the ASX300 and they usually have good volumes and satisfy the requirements of the larger investors.

For me, posting trades on here and being involved also has the effect of satisfying some of the conditions suggested on page 32 of Brett Penfold's 'The Universal Principles of Successful Trading'.

Cheers


Chart of GRY below, getting close to the stop today but it will be a profitable trade if I get stopped out.
(click to expand)


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## tech/a (7 January 2011)

OK

Here's a little hint.
I find a lot of prospects a day before they come up on any screens --HERE.
This is where I found PSF.
 Nice and early and a little beauty----so far!

http://au.finance.yahoo.com/gainers?e=ax

Look for good volume without a great deal of price increase and check to see if the chart is a breakout! That easy.
You get onto some real runners.


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## Boggo (7 January 2011)

Bummer, just had a look at that site tech/a. BTA is on there and it came up in my heads up scan of the ASX 300 on the 29/12.
I ignored it because it has had a few attempts at similiar breakouts without success.

Nice run since then, up another 10% today, you get that eh !

(click to expand)


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## daki (7 January 2011)

Hi guys, some great work in here, can I ask what platform you use to look at the stocks?


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## tech/a (7 January 2011)

*Daki*
I use Metastock,and Tradeguider EOD.
but any trading platform would suit.

*Boggo*
I would have rejected it as well.
we wont get them all but we will get enough.
3rd losing day in a row.
Doing some culling and buying.


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## suhm (7 January 2011)

Not really sure how to post a chart and only have the etrade interactive chart to look at but does bta, biota look like a breakout that will continue. Looks like a bit of extra volume over the last couple of days but on no new news to my knowledge. Has been consolidating for the last few months.


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## tech/a (7 January 2011)

*SUHM*

My opinion.
Wont have time to be so helpful once I'm back at the office Monday.
Still hope this helps

*BTA*


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## jimmyizgod (7 January 2011)

Hi Tech/a & Boggo,
First of all thankyou for all your postings on this thread - its becoming a large part of my education in technical trading. you guys posting stuff like this i think contributes massively to ASF, so a shout out to you.
Im looking into some charting software and ive tried out a few, im currently using the free version of incredible charts at the moment and before paying for the full version i'd just like to know what you guys are using for the charts you're posting in this thread?

cheers.
jim


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## jimmyizgod (7 January 2011)

jimmyizgod said:


> Hi Tech/a & Boggo,
> First of all thankyou for all your postings on this thread - its becoming a large part of my education in technical trading. you guys posting stuff like this i think contributes massively to ASF, so a shout out to you.
> Im looking into some charting software and ive tried out a few, im currently using the free version of incredible charts at the moment and before paying for the full version i'd just like to know what you guys are using for the charts you're posting in this thread?
> 
> ...




sorry techa i missed your earlier post re what software you use. pls ignore me. 
the thanks still stand but


----------



## white_crane (7 January 2011)

tech/a - with that volume pattern for BTA, I think that it will have a few inside days with the price tending down to resistance.  I would be looking for decreasing volume down to pretty low volume (low volume test of resistance?).  What do you think (and others)?

I'm not on this, but it's on my watchlist.


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## Boggo (7 January 2011)

tech/a said:


> *Daki*
> I use Metastock,and Tradeguider EOD.
> but any trading platform would suit.




Daki
I use Metastock as my primary platform and I run two seperate scans my own breakout that I built which picks up potential breakouts and a Turtle breakout that identifies breakouts over a 20 day period.

I also use MTPredictor EW software which is excellent for EW analysis and will start to kick in again as soon as this market starts to turn up. It works really well at picking up stocks that are in an overall trend and have just had a correction.

I have also got Amibroker and Dynamic Trader but I rarely use either.

Its not the platform that creates the opportunities, its what you do with it and to do anything with it you need to know what you are looking for first and then knowing how to manage it when you find it.




tech/a said:


> *Boggo*
> I would have rejected it as well.
> we wont get them all but we will get enough.
> 3rd losing day in a row.
> Doing some culling and buying.




tech/a
It probably would have failed your "eyeball test" too I suspect.
I am very happy with what I am getting too, plenty just in the ASX 300 alone.

One more negative day will trigger a few stops for me but I do like the opportunities that pop up after a few negative days.


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## tech/a (8 January 2011)

white_crane said:


> tech/a - with that volume pattern for BTA, I think that it will have a few inside days with the price tending down to resistance.  I would be looking for decreasing volume down to pretty low volume (low volume test of resistance?).  What do you think (and others)?
> 
> I'm not on this, but it's on my watchlist.





Yes I do agree (I bought a few yesterday.)
The depth of any retracement (if any) will indicate the level of selling present in the buying yesterday.For holders a shallow short consolidation will be ideal and a signal to me to add.

Deeper and I as well as others I'm sure will reconsider options.
Dont be surprised to see more rising of price before consolidation or pull-back.




The very long accumulation period I find very attractive from a trade perspective.


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## tech/a (8 January 2011)

> Dont be surprised to see more rising of price before consolidation or pull-back.




*SUPPLY MUST BE EXHAUSTED*

Before trading on Monday I think it important to continue some discussion on Volume and Spread analysis of BTA---indeed the following should be considered in *ALL BREAKOUT* analysis.

You'll note on the chart 4 circles I will discuss each individually but most importantly you *MUST SEE* Supply being exhausted.
Now I have shown examples of lack of supply in small consolidations as a stock begins a trend,this analysis is for those accumulation phases where supply keeps the share from breaking out of a prolonged range---how and why that occurs and what we should be looking for.

Firstly the Broad picture.

Click to expand.




Now back to NUMBER (1) Its pretty clear this isnt going to "V" bottom.




As The Bottom Flattens we can see a definite change in sentiment.




And now things are VERY different!




Which brings us to NOW.


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## Boggo (8 January 2011)

That is excellent tech/a, about three chapters of a book I tried to read on the subject in just one post.

I am going to have to pay more attention to volume behaviour in my eyeballing of scan results.

Cheers.


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## tech/a (8 January 2011)

Boggo said:


> That is excellent tech/a, about three chapters of a book I tried to read on the subject in just one post.
> 
> I am going to have to pay more attention to volume behaviour in my eyeballing of scan results.
> 
> Cheers.




You have my book?


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## Boggo (8 January 2011)

tech/a said:


> You have my book?




Mate, I reckon you should write one.
Four main topics, the entry, the exit, money management and basic chart reading along the lines of your post above.

The book I was referring to is "Master the Markets".


Anyone who is starting out and reading this thread I would recommend you go to this site and click on "v6 Introduction (PDF)" link on the left.
Download that document, read pages 1 and 2, ignore all the software stuff and go straight to page 51, and read pages 51 to 59 while ignoring references to the software but learn and understand what he is saying, it will keep you in the market.
http://www.mtpredictor.com/index.php

My


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## Boggo (8 January 2011)

This passed my initial eyeball test, note that it is a weekly chart. 
If I am reading your description of volume behaviour correctly tech/a then the volume on this is how you like to see it.

(click to expand)


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## tech/a (8 January 2011)

*BOGGO*

The current chart is different but the past chart has a very similar pattern.
I'm sure you can see the difference.


----------



## tech/a (9 January 2011)

*Tugga*

Is there a "tip" or trick" in this?


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## Boggo (9 January 2011)

tech/a said:


> *BOGGO*
> 
> The current chart is different but the past chart has a very similar pattern.
> I'm sure you can see the difference.




Yes, thanks for that. That single down bar with low volume is an interesting precursor to a move in the opposite direction and makes sense.

Correct me if I am wrong with that bar, it is not so much the bottom pivot, it seems more like a 'test' in the new uptrend in particular the second last bar in the chart below.

Chart of MEP below with a few examples in the recent uptrend.

(click to expand)


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## Boggo (9 January 2011)

The weekly chart of MEP (I was too slow to edit the previous post again)

(click to expand)


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## tugga (9 January 2011)

tech/a said:


> *Tugga*
> 
> Is there a "tip" or trick" in this?




Sorry I posted this in the wrong forum.

I'm only new to tech trading... am I on the right track?


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## l3xm4rk (9 January 2011)

Hey guys - great thread, really enjoyed reading so far, picking up some new ideas which is good.

Thought I'd post up MOD for you to have a look at, I think it may be setting up for a new run after a recent breakout.

As you can see hopefully see in the attached, it brokeout on 22/12 on high volume, continued up for a bit and has since retracted a bit on much lower volume.

So I point this out because on the last trading day we've got a down day, small range, and comparatively small volume. The stochastics are also down.

Thoughts?

Disc: I do not hold MOD.


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## white_crane (9 January 2011)

My 

A down bar on light volume to me is not a good sign.  Also, the retracement is large - almost 30%. I would need to see price level out (support) first, followed by a wide up bar on good volume.  I just can't see it happening in the near future.

As I'm still a novice, I now defer to other, more experienced traders for their views.


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## suhm (10 January 2011)

Thanks tech, very informative, it's been an ongoing for me to improve my techincal analysis skills, it's definitely helped decrease my opportunity cost by helping me recycle my capitaly more effectively as its reduced the gap between my entry point and when the trade works either in my favour or not.


----------



## skc (10 January 2011)

l3xm4rk said:


> Hey guys - great thread, really enjoyed reading so far, picking up some new ideas which is good.
> 
> Thought I'd post up MOD for you to have a look at, I think it may be setting up for a new run after a recent breakout.
> 
> ...




MOD went through a backdoor listing on 22 Dec and changed from whatever shell it was into an explorer backed by someone from the Sandfire team - hence various people getting overly excited and decided to pay 22c for the 10cps MOD holds in cash...

The point is any price volume analysis you do needs to treat the company as a completely different one from 22 Dec onwards.

Apologies for keep bringing fundamentals into a technical thread.


----------



## tech/a (10 January 2011)

l3xm4rk said:


> Hey guys - great thread, really enjoyed reading so far, picking up some new ideas which is good.
> 
> Thought I'd post up MOD for you to have a look at, I think it may be setting up for a new run after a recent breakout.
> 
> ...




Back at work so just dont have the time to reply during the day.

The first thing to consider is that this stock has not started any consolidation after the High yet.
We see successive low closes and while the low volume indicates a lack of supply we are yet to see if there are any buyers who want this.
To get into this or add I would want to see a low followed by some clear buying (This may not be supported by volume) if supply has left price will rise easily even on low/moderate volume.
I note today's bar's low is at close of the 22/23/12/10 high volume bars which makes sense for buyers to place a buy stop.
Aggressive buyers would have bought today with stop at 15c.
To me this is yet to prove itself so would be watching---probably not even that!



suhm said:


> Thanks tech, very informative, it's been an ongoing for me to improve my techincal analysis skills, it's definitely helped decrease my opportunity cost by helping me *recycle my capitaly more effectively as its reduced the gap between my entry point and when the trade works either in my favour or not*.




This is a good thing.

With tighter stops I cut back my risk even more by risking 1% of my capital Even .5% with really close opportunities I see during the day.
I still have good parcel sizes but a narrow margin before the Stop kicks.
*This is only wise in a BULLISH day*
You want to be in the money immediately, and want to cut down on the chance of being stopped.

Its great to see people benefiting,thanks for the feedback.

_On a separate note_.

Getting belted at the moment.
Had 5 losing days still culling and still buying but have cut back the risk % and parcel sizes --- not adding to winning positions until I see an up turn to consolidation.
Its tough in these times to remain focused and realise that our skewing of our management of portfolio will see us on the winning side over the longer term.


----------



## tech/a (10 January 2011)

*Can we post Trades on the Trades Threads* 

Unless its making a point about a Tip or Trick in trading a breakout.


----------



## tech/a (10 January 2011)

*A LOW VOLUME DOWN DAY DOES'NT MEAN NO SUPPLY IN EVERY CASE *

I have to straighten this out----I'm seeing Analysis from people on this forum who are now labelling Low Volume Bars as lack of supply.

It can and does mean in certain circumstances* LACK OF DEMAND.*

*So how do we know??*
Note a single bar in a single periodicy is valid for 3-5 subsequent bars. In other words it (The Signal) is/will be *validated or negated* within 3-5 bars after that other analysis will come into play.

I have shown ONLY EXTREMELY low Volume in a *Tight Range Consolidation* after a move up in trend.

Click to expand


----------



## l3xm4rk (10 January 2011)

Hey tech - thanks for the clarification.

So if the low volume, tight range isn't a signal (it can't be a signal if you can't confirm it until the following day), then how do you know when to top up?

I.e. in the example posted above - at what price point did you top up?


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## tech/a (10 January 2011)

I look for trading above the high of the signal bar.
Ill add close to close if its still above the signal bar.

*Spot the signal on SDL on 31/12*

*Extremely low volume 
Tight Consolidation
Within 5 Bars
Followed by an up day.*


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## Lone Wolf (10 January 2011)

If you wait for the close of the next bar to confirm lack of supply, there's a chance you'll miss the breakout, or at least have to get in with a wider than desired stop. How far are you willing to chase the price above the breakout? Would it be better to place a buy order at the breakout point, then if you don't get confirmation on the next bar, either remove the buy order, or kill the trade if triggered by the confirmation bar being a false break? Or do you get a better win/loss ratio by actually waiting for confirmation bar to close? 

Of course you can adjust the trade size to suit the stop level, but even if we get confirmation there's still no guarantee that price will go our way. You obviously believe in waiting for confirmation, but just out of interest, have you ever compared the results of tight stops vs. waiting for confirmation?


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## tech/a (11 January 2011)

Lone Wolf said:


> If you wait for the close of the next bar to confirm lack of supply, there's a chance you'll miss the breakout, or at least have to get in with a wider than desired stop. How far are you willing to chase the price above the breakout? Would it be better to place a buy order at the breakout point, then if you don't get confirmation on the next bar, either remove the buy order, or kill the trade if triggered by the confirmation bar being a false break? Or do you get a better win/loss ratio by actually waiting for confirmation bar to close?
> 
> Of course you can adjust the trade size to suit the stop level, but even if we get confirmation there's still no guarantee that price will go our way. You obviously believe in waiting for confirmation, but just out of interest, have you ever compared the results of tight stops vs. waiting for confirmation?





Its actually not my belief.
Williams and Wychoff both advocate that you *cannot know* if the bar is lack of supply without the next bar showing the way. 
I agree.
I also agree with you that its not an Iron clad guarantee that price will continue for ever in the direction of the next bar.
Personally I find adjusting size to stop level the more comfortable and consistent for myself.
I'm a believer of hopping on train lines and anticipating the train moving almost immediately---if its already moving---even better.


----------



## daki (11 January 2011)

tech/a said:


> *Daki*
> I use Metastock,and Tradeguider EOD.
> but any trading platform would suit.
> 
> ...




Thanks mate, appreciate that.


----------



## daki (11 January 2011)

Boggo said:


> Daki
> I use Metastock as my primary platform and I run two seperate scans my own breakout that I built which picks up potential breakouts and a Turtle breakout that identifies breakouts over a 20 day period.
> 
> I also use MTPredictor EW software which is excellent for EW analysis and will start to kick in again as soon as this market starts to turn up. It works really well at picking up stocks that are in an overall trend and have just had a correction.
> ...




Thanks boggo, good explanation. Looking for platform that I can program for, I've been involved in MT4 programming for FX, would like to convert the skills over to some of the stocks platforms and see what we can come up with . I've been using Etrade interactive charts for a while but they are really pain in the butt, and FX isn't very good to trade at the moment as stocks are performing better, so I thought of a little switch as a refresher


----------



## tech/a (11 January 2011)

daki said:


> Thanks mate, appreciate that.




For trading I use Tradguider R/T.


----------



## joea (11 January 2011)

tech/a said:


> I look for trading above the high of the signal bar.
> Ill add close to close if its still above the signal bar.
> 
> *Spot the signal on SDL on 31/12*
> ...




Hi. tech/a
This particular pattern is similar to that described as a "3 in one" in Jeffrey Kennedy's
"How to use bar patterns to spot trade setups."
I down loaded it from elliott wave international for free.
Cheers


----------



## tech/a (11 January 2011)

joea said:


> Hi. tech/a
> This particular pattern is similar to that described as a "3 in one" in Jeffrey Kennedy's
> "How to use bar patterns to spot trade setups."
> I down loaded it from elliott wave international for free.
> Cheers




Hmm
Didnt know of him.
always looking for other exponents.
Do you have the link.
Does he have any other publications

Better still how do I contact him?


----------



## joea (11 January 2011)

tech/a said:


> Hmm
> Didnt know of him.
> always looking for other exponents.
> Do you have the link.
> ...




Google "how to use bar patterns to spot trade setups" and download pdf.
joe


----------



## Boggo (11 January 2011)

joea said:


> Google "how to use bar patterns to spot trade setups" and download pdf.
> joe




Been away since yesterday morning so I have missed a bit including some of my stops getting hit and the breakout on GXY this morning
https://www.aussiestockforums.com/forums/showthread.php?t=20906&p=602918&viewfull=1#post602918

Had a quick look through that joea but there doesn't seem to be any value place on volume association, interesting though nonetheless.


----------



## Frank D (11 January 2011)

Don’t be *fooled by volume analysis* on its own, unless it has been optimized
 with a ‘known pattern’

The most robust ‘known patterns’ are, either price rising up from support or a 
breakout from consolidation

Most of those patterns are helped by higher timeframe analysis, and ‘*Time’ being 
the arbiter of the set-up.*

If you a looking for BTA to continue from the breakout:- *1.03-109 becomes 
support*…

first target @ 1.39.

Because it’s a breakout of the first month of the Quarter, the up trend can run for 
the next 3-months until the next Quarter….

Along the way it will have minor dips during the current Quarterly cycle, normally 
after the following monthly highs are reached ( February), or 1.39.


----------



## tech/a (11 January 2011)

Good tip Frank.

Any analysis used in isolation will have limited value.

I will point out though that VSA is by its own admittion limited to 3-5 periods for validity.
Regardless of periodicy.
Having used it for some years I have to agree.

Interesting BTA I hold it.


----------



## Frank D (11 January 2011)

*TLS:- Monthly and Weekly*

Telstra is another example of using support or breakouts.

You either want to Buy support using 2.72 by validating it (next day’s trading)

Or you are buying the breakout, as ‘time’ provides the known
 pattern :- Weekly breakout ($2.81)

2.81 Now becomes support.

You don’t want to see this week closing below 2.81 (fake break)

Target 2.93/2.96:- known resistance.

if it clears $2.96 ,then it has a Primary cycle that finally turns bullish, as it will 
be above the Yearly 50% level.


----------



## lindsayf (11 January 2011)

Not trading stocks at the moment but enjoying this thread.

RRS daily

Nice breakout and has now retested the breakout level on reducing volume.  Fairly classic price action - does VSA support this trade?

Lindsay


----------



## tech/a (12 January 2011)

*VOLUME SPREAD ANALYSIS*

Looks at each bar relative to every other bar and should be read in conjunction with
other analysis such as support and resistance as you have pointed out.

It is a method of understanding the movement of those in the market so that we can make better informed decisions about Buying/Selling/or holding.

The landscape changes from bar to bar and as each bar tells us something (Even if its nothing).The life of a *SINGLE *bars in VSA analysis is short 3-5 periods----by which time other bars will have impact.

Of course groups of bars are an important analysis tool in VSA.

So in answer to your question---yes VSA supports RRS and* ALL* charts.

The chart below is RRS (Tradeguider)
You'll note it has indicated weakness by the RED Triangles and at support (Yesterdays bar) We have an alert in Green awaiting confirmation (Thats why its not a triangle).
There are commentaries attached to each triangle which I have not opened or attached you can only open one at a time not leave all open.


----------



## sparfarkle (12 January 2011)

Gday tech,
Great thread.I wonder if a couple of points could be cleared up.
Firstly looking at a daily chart of GGG,(i havent mastered how to post a chart yet),the bar of 1/10/2010 i assume would be a signal bar as the following bar was an upday but would your stop loss have been triggered on 5/10/2010 with an intraday breach or do you act on eod signals which would have kept you in the trade?
Secondly,with regard to RRS,would yesterdays bar be considered a buy signal,i'm a little 
confused as to your definition of ''Tight consolidation within 5 days'',do you mean it needs to have consolidated for 5 days,or it needs to be a small range day and the signal will be validated within 3 to 5 days?
Hope i've made sense,

Sparfarkle
I'll see if i can post GGG chart


----------



## tech/a (12 January 2011)

Sparfarkle.

Im seeing some dangerous confusion.
No that would *NOT* be a signal.
You need to go back over the post and have a good look at what is written.

I have only mentioned the EXTREMELY LOW VOLUME down bar is a small tight consolidation as something to *LOOK FOR* if in a Breakout trade AND the stock takes a breather with a small tight consolidation---*NOT* AS A stand alone buy signal.

RRS could be a buy signal for a Mean Reversion Trader but in the context of these posts only has relevance as Support holding.

Sorry to be harsh but take the time to absorb!!


----------



## Boggo (12 January 2011)

Boggo said:


> Daki
> 
> I also use MTPredictor EW software which is excellent for EW analysis and will start to kick in again as soon as this market starts to turn up. It works really well at picking up stocks that are in an overall trend and have just had a correction.




Daki
An example below of the type of setup or pattern that I was referring to in part of my answer to your query (above).

Sorry tech/a, off the thread topic a bit but just thought I would display what I meant in my earlier response.

(click to expand)


----------



## white_crane (20 January 2011)

Here is a trade that did not work out for me that I and others may be able to learn from.

My thoughts/reasoning:
I bought in at 98c (stop set at 92c - Tuesday's low) on Wednesday after it broke out on Tuesday on high volume.
After viewing the chart that afternoon, I decided to sell based on the down bar, closing on it's low.
It sold today at 93c before my stop was hit.

So what did I do wrong?  Any advice/comments/constructive criticism would be appreciated.

N.B. I can only trade EOD.


----------



## Frank D (21 January 2011)

*BTA:- *

BTA hit 1.39 and sold off.

It is still in a breakout pattern from 1.09, but now you would need it to move into a 
3-week consolidating pattern, before looking for the next set-up sometime in February/March


----------



## tech/a (21 January 2011)

Excellent Frank.


----------



## tech/a (21 January 2011)

white_crane said:


> Here is a trade that did not work out for me that I and others may be able to learn from.
> 
> My thoughts/reasoning:
> I bought in at 98c (stop set at 92c - Tuesday's low) on Wednesday after it broke out on Tuesday on high volume.
> ...




Just a few initial comments.
Visitors just over so will do some more tomorrow.


----------



## Frank D (7 February 2011)

*BTA:- Dilernia Model*

BTA is in a Quarterly cycle breakout (January) that can continue to trend towards 
highs in April:- break and extend pattern

We can see the new dynamic highs in February highs @ 1.43/48, but 1.39 can 
continue to resist the stock from rising.

As noted from my previous post, BTA was likely to move into a 3-week
 consolidation pattern, which just ended, and BTA could see another push upwards 
this week *using 1.32 as the trend guide*.

However, my ideal pattern on BTA would be to use the trailing Weekly lows as
 support. They are currently @ 1.12/14, but at time moves forward, those Weekly
 lows will shift upwards.

The Weekly lows will be used as part of the expectation that they will provide 
support for the completion of the move into the Next Quarterly cycle highs in April.


----------



## Frank D (12 February 2011)

*BTA (Dilernia Model)*

BTA has continued into the February highs @ 1.43/48 and stalled.

*The critical level on BTA is 1.39 once again.*

if it remains above 1.39 then the expectation is that the trend will continue 
towards higher highs in April.

Below 1.39 and expectation is that price will rotate back into the trailing support
 levels, defined by the 3-week lows...which are currently @ 1.20, matching the
 monthly 50% level.


*The Weekly lows* (validated) will be used as part of the expectation that
 they will provide support for the completion of the move into the Next Quarterly
 cycle highs in April.


----------



## Synergy (14 February 2011)

Looking for thoughts on CSS... 

My gut feel is that it's gearing up to again move up, but the initial reversal was pretty convincing also. The last 2 candles are quite encouraging with their low volume and closing on highs after small retraces. 

While it's above the green line I'd be hopeful of another move up.


----------



## Synergy (16 February 2011)

Still much the same story. Tomorrow could give a clearer idea of where it's heading.


----------



## Frank D (19 February 2011)

*BTA*

Completed the double monthly high pattern in February @ 1.48, followed by a
 reversal back down.

Normally the 3-week lows (validated) will provide support for the trend to
 continue towards higher highs in the following Quarter.

However, the 3-week lows weren't validated, resulting in the trend moving back 
down to retest the monthly breakout @ 1.09, but closing below the
Weekly lows @ 1.20

Therefore, in the short-term the trend may continue to remain flat until price is
 back above the weekly 50%.

*Note;- *price is below the Quarterly 50% level @ 1.39

Because if this, it could take until the start of the following Quarter for the 
next ideal set-up.


----------



## Frank D (5 March 2011)

*BTA*

BTA is still bearish and may continue down towards .97 cents, and lower

If above 1.11 next week, then we begin to look for a move back towards 1.25 
over the next 2-weeks

And then look for the *next ideal set-up *using the 2nd Quarterly 50% level 
from April onwards, for a potential trend towards 1.58+


----------



## tech/a (12 March 2011)

Panning out as expected Frank


----------



## suhm (13 March 2011)

Its cases like this which makes me want to learn more about T/A so that I would be confident making decisions on price action, as it is always hard to know when to buy or sell using FA as I am buying because I want to sell at multiples of the current share price because that is what I think that the company should be worth. I may be right that the company is worth much more than what the price is but given that the price is lower than what you see the value as there is no reason why the price can't go down further.
I'm also not warren buffett so I can't buy enough of the company so that I can buy all the stock that I want until everyone who wants to sell below what price I want to pay has sold.


----------



## tech/a (13 March 2011)

suhm said:


> Its cases like this which makes me want to learn more about T/A so that I would be confident making decisions on price action, as it is always hard to know when to buy or sell using FA as I am buying because I want to sell at multiples of the current share price because that is what I think that the company should be worth. I may be right that the company is worth much more than what the price is but given that the price is lower than what you see the value as there is no reason why the price can't go down further.
> I'm also not warren buffett so I can't buy enough of the company so that I can buy all the stock that I want until everyone who wants to sell below what price I want to pay has sold.




This is always the dilema with fundamental trading.
This technical technique (Franks and other methods) would help fundamentalists in their timing of their trade.

My initial comments



tech/a said:


> Just a few initial comments.
> Visitors just over so will do some more tomorrow.
> 
> View attachment 40980




Now the follow up


----------



## Frank D (14 March 2011)

*BTA:- *

*Random support @ .93/97*


----------



## sammy84 (16 March 2011)

SundayForever said:


> As you can see from the green arrows my scan is designed to find these setups.
> From the ASX 300 I may get 10 to 20 candidates on any night in a bullish market and that is where a quick eyeball of the results usually narrow it down to maybe 2 or 3 to watch.
> Patterns similiar to those at the highlighted area on the SRL chart just stand out like the proverbial at first glance especially when they pop up three days in row.




Hmmmmm.....I think this maybe missing a chart.


----------



## Frank D (19 March 2011)

*BTA*

BTA currently supported.

Next Week's  Trend guide $1.00

It's either going to swing back towards the April 50% levels.

or it's going to struggle to remain above $1.00 for the next 2-weeks, and then
 continue down into April's lows @ .69/73


----------



## Frank D (1 April 2011)

*BTA:- *

Pleasant surprise on BTA, as I was only expecting a reversal pattern to the 
April 50% levels @ 1.13/15 from previous week's lows.

Instead today has gapped open, (exit on open), and based on the current the price action...

There is a possible move up towards 1.80....

*Trend guide 1.33/40*


----------



## pavilion103 (11 April 2011)

Thanks to all the guys who have posted on here. It has been incredibly useful. I've taken screen shots/saved pictures for a large number of posts so I have them on file and can go back over them all. 

Thanks,
Matt


----------



## tech/a (14 April 2011)

Will crank this up again in the coming days.
But some initial food for thought.

*ALL* trends *START* with a breakout.

*NOT ALL* breakouts are *EQUAL*

There are breakouts everyday so how do we find those with greatest potential.

There are also many types of breakouts.

*PRICE
VOLUME
TREND
PATTERN
SUPPORT
RESISTANCE*

How often do we limit ourselves to opportunity?


----------



## TheAbyss (14 April 2011)

tech/a said:


> Will crank this up again in the coming days.
> But some initial food for thought.
> 
> *ALL* trends *START* with a breakout.
> ...




Excellent. Look forward to your work Tech.

Is the attached a valid break? Not sure if a 3 year weekly is a valid time frame for a stock like WDR?

Cheers mate


----------



## pavilion103 (14 April 2011)

I've found that a lot of people seem to trade bar charts rather than candlestick by the looks of it. Is it easier to identify a number of these tips and 'tricks' using bar charts (especially VSA)?


----------



## tech/a (15 April 2011)

Yes.
Both VSA and Candlesticks (while in some ways similar) are individual technical charting methods.
In fact true VSA charts dont show OPEN in their bars as its not considered important.


----------



## Frank D (22 April 2011)

*BTA*

Coming down from April's highs @ 1.49, and support failing to hold @ 1.31

Based on the current pattern, my view is that Price is moving back
 down into 1.18.

There are two patterns at play....

#A) finds support @ 1.18 and then continues higher in MAY (above 1.31)

#B) same pattern as the first Quarter, finds support @ 1.18, but then struggles
 to rise higher than 1.31 and moves back down towards the lows.


----------



## Frank D (29 April 2011)

*BTA:-*

Trend bias has continued down into 1.17/18

And as we can see below, there has been a lack of buying over the past
 2-days to help get it back above 1.28, by next week's open.

Just by looking at the price action... there's more reason for BTA to 
move lower (#B)...than move upwards, if it begins trading below 1.21

*Note*:- if it's below the weekly lows @ 1.12, then treat it as 
a *break and extend pattern* towards the following 
Weekly lows (unkown as yet)


----------



## Synergy (5 May 2011)

This caught my eye as being slightly interesting...

GGP, broke out of a pretty solid channel from around its all time lows and now has fallen back and bounced off both the top of the channel and the rising trend line. It's come down on low volume, and I'm watching closely to see if it's got a bit of a rebound in it from here.


----------



## tinytim1 (6 May 2011)

YRR looks promising from here, nice volume build.


----------



## patchau (8 May 2011)

For sometime I have followed Frank's methodology, applying the system to long trades using ASX stocks.

The difficult part was finding stocks, breaking out, as their closing price crossed and closed above the weekly or monthly 50% level.

Finally, using a MetaStock exploration I believe I have a  way around this problem. 

Attached is an Excel file containing today's selection. (week ending 6/5/2011)

Close= closing price

Wk Val=weekly 50% level

Mth Val=monthly 50% level

Weekly & Monthly columns containing  "1" = closing price crossed above the 50% level


----------



## pavilion103 (17 May 2011)

tech/a said:


> Will crank this up again in the coming days.
> But some initial food for thought.
> 
> *ALL* trends *START* with a breakout.
> ...




This is what I am most interested in. I don't think the breakouts I've been trading in my sim are all that fantastic and this insight would be sensationsl!


----------



## Frank D (20 May 2011)

*BTA*

BTA has moved into a 3-week consolidating pattern, without dropping lower than
 the Weekly lows @ 1.14

current price action *(Support 1.17), *suggests the next week will move back
 towards the monthly 50% level @ 1.27, matched with the Weekly highs

1.27 is seen as resistance during MAY, however, it will shift at the start of June


----------



## white_crane (11 July 2011)

Haven't been any posts in here for awhile, so here's one for everyone to view and comment on.

Note
(1) The very high volume when it bottoms (20/06) and the downtrend in volume that follows with no penetration below the low of that bar, and
(2) The wide ranging bar on very high volume (04/07), following by rapid downtrend in volume with a tight bar on very low volume 3 days later.


----------



## tech/a (11 July 2011)

While it's a good short term trade I feel it's almost over.
I read this as a pullback in a 5 wave down trend 
Most of these patterns become triangles before finishing off the wave 5 pattern
Currently forming wave 4 in my view.
You've identified an exhaustion in the wave 3 this is typical in a reversal of trend
Even for a temporary reversal.


----------



## white_crane (11 July 2011)

tech/a said:


> While it's a good short term trade I feel it's almost over.
> I read this as a pullback in a 5 wave down trend
> Most of these patterns become triangles before finishing off the wave 5 pattern
> Currently forming wave 4 in my view.
> ...




I too thought it was coming to and end - based on the high volume bars over the last two days coming immediately after the short pullback.


----------



## tech/a (13 July 2011)

Some further notations and comments along the lines of "tips and tricks" with regard to *NDO.*

_CLICK TO EXPAND_


----------



## bailx (4 January 2012)

I read and hear a lot of people, talking about and trading breakouts as though they can predict when the breakout will happen. I think its more of a high probability, low risk scenario. To know when and how to trade a breakout you need a good strategy.
  I understand that best way to trade for breakouts is through a trending channel. The stock becomes more receptacle for a breakouts to happen. use your indicators, watch for the trending patterns.


----------



## Boggo (4 January 2012)

tech/a said:


> Some further notations and comments along the lines of "tips and tricks" with regard to *NDO.*
> 
> _CLICK TO EXPAND_
> 
> View attachment 43636




You were spot on there tech/a


----------



## boff (5 January 2012)

Potential short on Spot Silver.

Apologies in advance if this should be in the Commodities thread but it seemed more appropriate here.

This looks to me like a descending triangle. Using the 30 minute chart I have already traded in and out of this pattern once in the last 24 hours (with profit) and have just entered again, but this time hoping for a breakout down to $27.


----------



## explod (5 January 2012)

boff said:


> Potential short on Spot Silver.
> 
> Apologies in advance if this should be in the Commodities thread but it seemed more appropriate here.
> 
> ...




Untill it actually breaks out of the pennant I fail to see where there is any potential either way.

On my reading it could just as well go against you, and currently it is.


----------



## boff (6 January 2012)

explod said:


> Untill it actually breaks out of the pennant I fail to see where there is any potential either way.
> 
> On my reading it could just as well go against you, and currently it is.




Thank you for the feedback. I closed out the position this morning for a tiny profit. On my reading of the chart I had seen the price action oscillating between horizontal and descending trend lines for a few hours and it felt like a good punt to take when the price was up near the descending trend line.
When I went to bed last night it had broken the horizontal and I was hoping to wake up to a nice drop. C'est la vie.


----------



## freddysa (20 January 2012)

WEC - White Energy Company is waking up!


----------



## ProverbialPaul (1 March 2012)

Thanks to everyone for their input here.

To say I'm on a steep learnnig curve is an understatement! lol


----------



## garthstar (11 March 2012)

*Recognia Scan - SVL breakout*

hello,
just started using the recognia software that now is supplied with belldirect.
so finally i have a stock scanner, its scanning for breakouts sub $1 long, most days over the last week, ive been getting emailed 1-3 potential trades a day.

was hoping some of you guys on here more experienced could also give your opinion of the charts, im looking to add extra criteria, and cherry pick the really good signals from the many im getting emailed daily.

would like to know in particular, this one has a selloff day on the the high vol bar preceding the breakout, which is itself on lower volume.  does this matter or not?

thanks for your time all contributors, im learning a gret deal from this thread


----------



## tech/a (11 March 2012)

Cant see your attachment
Just give the code and date.

have a look at the characteristics of EGP
Thats a good breakout which you could place an aggressive low risk trade


----------



## white_crane (17 March 2012)

*Re: Recognia Scan - SVL breakout*



garthstar said:


> would like to know in particular, this one has a selloff day on the the high vol bar preceding the breakout, which is itself on lower volume.  does this matter or not?




I don't see a breakout.

There is an extreme volume, high range, down bar followed by an inside bar and then a bunch of bars still ranging within the high and low of the first.  The first bar is acting as resistance going forward.


----------



## Chasero (17 March 2012)

tech/a

Pls revisit NDO chart. Potential breakout?

Also, in regards to SVL.

I recall reading a huge option to exercise 20m shares or something in one of their financials.

That's why the price plummeted. The company can exercise the option?? Will try and have a look but it's a tad late now.


----------



## PinguPingu (23 March 2012)

Had ROC (ROC OIL COMPANY) on one of my too many watchlists at the start of Jan, just checked today..damn.  Still, nearing a one year top.

Edit: SMX (SMS MANAGMENT) perhaps another potential one


----------



## Chasero (23 March 2012)

Happily trading KEY


----------



## bailx (24 April 2012)

Doing a little research into Chart Patterns and there Protential. Understanding that Fundermentals & TA's such as Volume Will always play an important part. _But Is This theory always correct?_ That Chart Patterns such as Multible Bottoms will always Ascend and Protentially Break-Out. Where as a Multible Tops will always Decend and more Protentially Break-Down. I'm saying this because those two Patterns appear to be always destent too that theory.


----------



## CanOz (24 April 2012)

Chart patterns have limited potantial, like everything in life there is no sure thing. Thomas Bulkowski has done a heap of reseach on chart patterns, I have his book "Encyclopedia of Chart Patterns". His studies list the success and failure rates of hundreds of familiar patterns. Its considered the foremost study into chart complex chart patterns i believe.

Double tops and bottoms are actually quite successful in all time frames, especially if they are 'tall', but it depends on how you define the patterns. Its not as simple as defining a double bottom as two lows with a high in between.

Do some more research....

CanOz


----------



## bailx (25 April 2012)

CanOz said:


> Chart patterns have limited potantial, like everything in life there is no sure thing. Thomas Bulkowski has done a heap of reseach on chart patterns, I have his book "Encyclopedia of Chart Patterns". His studies list the success and failure rates of hundreds of familiar patterns. Its considered the foremost study into chart complex chart patterns i believe
> 
> CanOz




I probably must agree with you there, about the limited protential. Triangles & Wedges are a good example of that. I must admit i don't know this Thomas Chap. If i may ask does he state on the most successful pattern for predicting ( forcasting ) a stock movement. If so, do you care to share? I have always been interested.

.


----------



## CanOz (25 April 2012)

bailx said:


> I probably must agree with you there, about the limited protential. Triangles & Wedges are a good example of that. I must admit i don't know this Thomas Chap. If i may ask does he state on the most successful pattern for predicting ( forcasting ) a stock movement. If so, do you care to share? I have always been interested.
> 
> .




CanOz


----------



## bailx (25 April 2012)

Thanks for the Heads Up! Diamond Bottoms, never heard of that one before sounds rare hard too find, does it look as good as it souds? Any E.g's


----------



## chops_a_must (23 March 2013)

This is an awesome thread. Well worth reading.

I've picked out some of the more important posts for me to comment on.




tech/a said:


> I've been asked by a few how I exit my discretionary trades.
> As I trade breakouts I thought I would include it in this thread as I use both exits and time stops which are based around technical price and volume action.
> Not only to exit but also a pre screening to select a stock for trading (as there are far too many breakouts to trade all of them.)
> 
> ...




This is good point for discussion, as it shows the multiple ways to profit from breakouts.

For mine, that would then go on to a watch list, to see if it forms a potential breakout pattern to enter.



tech/a said:


> Breakout trading is one of the most popular forms of trading. My favourite for stock trading.I Dont use it at all for Index futures!!.
> 
> *Breakout trading falls into **4 F'S* *once you take a trade*.
> The first 2 are similar and the sort of trades we want.
> ...




Very good.

And the philosophy behind breakout trading is exactly why it doesn't work for index/ futures trading.

We're looking for big, volatile moves in our favour. The statisticians would have a word for it.

But indices are different. No-one is going to offer a take-over of an index. Indices don't upgrade earnings by 150% etc.

I've paper traded intraday breakdowns based on bullish stock patterns, with success, but never put money on it. Different beasts that favour reversion.



tech/a said:


> Yeh somebody will read it here package it up in some glossy crap and it will be in India or China being totted as the next Big thing.
> 
> You know if anyone finds this helpful in their trading I would appreciate the feed back --- you can private mail me.
> Interested in practical application stories.




No. It's written below.



tech/a said:


> Will crank this up again in the coming days.
> But some initial food for thought.
> 
> *ALL* trends *START* with a breakout.
> ...




And this gets to my stock trading philosophy.

When I came to this site I was just an average punter, putting money in fairly randomly.

Thanks to you tech, and many others I gravitated towards breakout trading because of my interest in CSG stocks, before they went gang busters.

From this, and upon reflection I guess I have developed my own methodology for breakout trading. It is discretionary, but has served me very well.

1) I visually select small and midcap stocks that have made or are near all time highs in an established uptrend.
2) I prefer stocks that are making money or have definite potential fundamentally.
3) I either buy the breakout or buy on confirmation of a likely breakout pattern.
4) I'm not worried about time so much, as my criteria naturally keep my trade rate down.
5) I'm looking at using breakouts to capture stocks in significant growth phases and trends.
6) I will scale in again repeatedly if patterns and breakouts continue.
7) My stop is initially based on established support, breakdown of pattern, moving to entry price or a lower low once into a trend.

So these gains are potentially open ended.

I also trade breakouts on below criteria.

1) Big caps that are giving bullish breakout patterns in an uptrend.
2) preferably aren't making all time highs. See below.
3) looking for targets at resistance upon breakout.stops on support, failure of breakout or entry price.

So these have a defined possible gain as well as risk.

I've also noticed that blue sky buys for big caps, are often unprofitable. And I know others here have developed systems that are actually profitable taking the other side of the trade.

So there are multiple ways to use breakouts to trade. Either as entries for longer term trend trading, or for your shorter term moves. Even on the short side.

Cheers.


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## Boggo (23 March 2013)

chops_a_must said:


> So there are multiple ways to use breakouts to trade. Either as entries for longer term trend trading, or for your shorter term moves. Even on the short side.




An example using my Turtle style breakout entry and exit system on a weekly chart of PMV.
Personally I wouldn't have taken trades 3 and 4 as my system needs a break above the high of the buy signal bar for entry.

Aside from a freeing up of funds it is an interesting comparison of buy and hold vs bailing out and being prepared to re-enter when (if ?) it turns back up.

(click to expand)


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## rbgmauq (3 April 2013)

Chart analysis helps to identify the support levels. and the rebound target level.s This sets up both a short-side tade, and later, lays the foundations for a trade from the long side to capture the rebound rally, and potentially the beginning of a new longer term uptrend.


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## History Repeats (8 June 2015)

Good thread tech/a and everyone else learned a lot and saw certain things that can incorporate to my trading and skills.


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## Sfnssie (27 July 2015)

I am a newcomer, would like to learn more from here.


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## RobertoHood (12 August 2015)

Hi everyone , here are some tips.....

1.	Find a stock with high liquidity from the NZX50/ASX200 (1million ADV) 
2.	Ensure the stock in in a decent uptrend (Determine time frame)
3.	Compare stock to NZX 50/ASX200 – Ensure there is an Upward trend correlation
Important to focus on just ONE stock for now.

Once pre requisites are confirmed, proceed to the next step.

1.	Calculate the volatility on a daily basis for the stock in “$” terms
=Maximum (H-L, H-PDC, PDC-L)
2.	Convert the “$” terms into a “%” value in relation to the stock
3.	Find time frame to average the volatility (5,10,15,20 days etc)
4.	Check chart for basic S/R level (Consider using different time frames together e.g MTF - Multiple time frames.
(#4 will be the key for our “Entry”)

From this information we can gather a few things;

1.	We have found a high probability Market (Uptrend)
2.	We have a found a high probability stock (3/4 Stocks follow the market)
3.	Correlation between the two further confirms this
4.	We know how much “$” the stock moves on a daily/weekly/monthly basis
5.	We know what this means to the bottom line in % terms

Now we have all the information we need to pursue Proper Risk Management.

1.	Consider what our findings of the stocks “volatility” are. Its telling us roughly how much cents/dollars our stock moves on a daily basis.

2.	What if we were to multiply this number by 1.5? What would the results tell us?  It would give us an anomaly figure. Which means, if the stock were to on any given day move this number or beyond, we would be outside the average, which put simply would imply the stock is currently behaving “outside” its normal behaviour.

Looking at the chart. Once we determine current support and resistance levels, we can then start to focus on our entry.
Look for an area where a breakout or further move can be confirmed based on previous movements.


I would be happy to answer any questions, and even give examples.

"One thing about the markets that can be said with 100% certainty is that markets trend beyond random"


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## Wysiwyg (12 August 2015)

RobertoHood said:


> I would be happy to answer any questions, and even *give examples.*



Okay, present a chart *showing **an entry for tomorrow* and a defined exit!


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## RobertoHood (13 August 2015)

Wysiwyg said:


> Okay, present a chart *showing **an entry for tomorrow* and a defined exit!






Hey Wysiwyg,

I put this information up to help a new trader, and point them into maybe a different way of chart analysis.

This is the system i used when i started trading, which has since evolved into a new beast.

Just showing a different pathway and when i said i would help and give examples, i was suggesting the to Excel side of things and any question which arose from my post 

And as for giving entries... well thats in my other post


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## caxer566 (8 May 2016)

RobertoHood said:


> I would be happy to answer any questions, and even give examples.
> 
> "One thing about the markets that can be said with 100% certainty is that markets trend beyond random"




Hi there! New day trader here learning the ropes

Could you outline these terms to confirm my understanding

H-L
H-PDC
PDC-L

And any recommendation on stock timeline viewer programs for hourly and day data with candle-wick graphs?

Jezza


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## ctur0001 (8 August 2018)

tech/a said:


> Yeh somebody will read it here package it up in some glossy crap and it will be in India or China being totted as the next Big thing.
> 
> You know if anyone finds this helpful in their trading I would appreciate the feed back --- you can private mail me.
> Interested in practical application stories.




Thank you for your wonderful advice. Made the world of difference to me, didn't know how to differentiate and manage position sizing's for the different breakout patterns. This advice works with many different strategies be it trends, mean reversion and breakouts. Cheers mate.


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## $20shoes (31 December 2018)

Here's an interesting one. Tech/A often shows the influence of control bars. Although not a perfect example, you can see that on the weekly, MGX had a wide ranging high volume bar in Feb 2017. Although price capitulates shortly after, that one weekly bar continues to exert a supply and demand zone at its extremities. 

You could interpret the failed breakout in Nov as supply from Feb 2017 bulls. If this is the main reason for background supply, we shouldnt really see prices fall below 48c. Woudl be looking for some bullish interest crossing past 54c to get me interested.


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## tech/a (31 December 2018)




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## Boggo (31 December 2018)

Along similiar lines tech/a 
(click to expand)


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## $20shoes (9 January 2019)

$20shoes said:


> Here's an interesting one. Tech/A often shows the influence of control bars. Although not a perfect example, you can see that on the weekly, MGX had a wide ranging high volume bar in Feb 2017. Although price capitulates shortly after, that one weekly bar continues to exert a supply and demand zone at its extremities.
> 
> You could interpret the failed breakout in Nov as supply from Feb 2017 bulls. If this is the main reason for background supply, we shouldnt really see prices fall below 48c. Woudl be looking for some bullish interest crossing past 54c to get me interested.
> 
> View attachment 91030




Stopped in on MGX yesterday on a nice day of trading.


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## $20shoes (30 January 2019)

MGX has had a nice run since these posts.


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## willoneau (10 May 2019)

hi just thought i would try and kick start this thread a little as i have been interested in getting to learn about VSA and breakouts and using both to jump on board . Enjoyed your charts and comments tech/a.


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## tech/a (10 May 2019)

Post up some charts and have a go at analysis


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## Garpal Gumnut (10 May 2019)

tech/a said:


> Post up some charts and have a go at analysis






Support resistance at $95 $90

RSI trending down 

Reasonable volume over last few days


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## tech/a (10 May 2019)

GG 

Any VSA ?

What is your analysis 
What are you anticipating?

What does the chart tell you?

You have noted a few things but how do you 
Use it?


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## willoneau (10 May 2019)

Hi tech/a i started a thread doing that as a record for me , to help me learn.
now i just need to learn how to get chart out of amibroker


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## Garpal Gumnut (10 May 2019)

tech/a said:


> GG
> 
> Any VSA ?
> 
> ...




I'd be anticipating a rise in volume as there could be a Wave 3 EW commencing which would be confirmed by RIO holding around $95 and an increase in volume.

gg


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## Garpal Gumnut (10 May 2019)

VSA on my limited reading says stay put.

gg


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## willoneau (13 May 2019)

tech/a said:


> View attachment 91045



From this chart tech/a were would you have entered or look to enter?
close out of box?
close above the high high?
or after the pullback?
I would have entry stop above high of close outside box with a stop at the bottom of box. Not sure if i would use a close below bottom of box or just put in a conditional order on it. A push down to it cries weakness to me.


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## tech/a (13 May 2019)

There is a number of entries but I have marked a chart of MGX 
if Id have traded it---I didnt. Right up until now.


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## Boggo (13 May 2019)

Believe this at your peril, but, always a possibility ??
Just my  input.

(Click to expand)


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## willoneau (13 May 2019)

tech/a said:


> There is a number of entries but I have marked a chart of MGX
> if Id have traded it---I didnt. Right up until now.
> 
> View attachment 94616



I agree with your entry at green line , my stop low of box and only move up to BE the same as you on the close of that bar.
my stop would now be at bottom of the latest box


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## tech/a (13 May 2019)

W
The last 4 weeks closes have been above 
$1.10
I think the bottom of the control bar is giving back too much 
Personally when volatility appears 
I prefer to get out near the top of it and look for re entry 
But that’s me


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## willoneau (13 May 2019)

my thought would be to wait for it to close above the box then move my stop up to the higher low in the box or wait for another high volume bar to move my stop below that.


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## willoneau (13 May 2019)

So you would place an exit stop just below $1.10 or get out on a close below it?


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## willoneau (23 May 2019)

tech/a said:


> There is a number of entries but I have marked a chart of MGX
> if Id have traded it---I didnt. Right up until now.
> 
> View attachment 94616



I bought this on the weekly at the break at 0.65 and closed it out on the daily up at 1.20 but never got back in after i closed the position.
Was part of my weekly trend system but the close was discretionary.


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## Telamelo (22 April 2021)

*URF* strong close yesterday @ 0.29c +7.41% 
	

	
	
		
		

		
			





2 year daily price chart shows URF shaping up nicely after a rounding bottom / parabolic move up commencing with recent big volume/momentum kicking in.

Super bullish chart that looks a treat imo

https://www.marketindex.com.au/asx/urf

https://asx.swingtradebot.com/equities/URF:ASX

DYOR .. Cheers tela


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## Joules MM1 (4 August 2021)

tea anyone?
it's an oldie but is it a _goldie_ ...who can _handle_ the puns ?


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## Tropico (4 August 2021)

Looks promising, but we will see what happens when NY starts the day.


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## Joules MM1 (5 August 2021)

Tropico said:


> Looks promising, but we will see what happens when NY starts the day.



stick this one in the fail category


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## tech/a (5 August 2021)

You can play it long or short 
short it’s clearly a breakout and clearly a huge winner.

what’s it doing in a breakout thread as a long play?


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## Sean K (5 August 2021)

tech/a said:


> You can play it long or short
> short it’s clearly a breakout and clearly a huge winner.
> 
> what’s it doing in a breakout thread as a long play?




Looked long to me due to the rise from June and it was going to follow the trend. It was generally heading up ish wasn't it? 

Did it look like a short play to you tech? 

Or, neutral, no real signals.


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## tech/a (5 August 2021)

Haven’t time to pull up and mark a chart Kenna’s but try this 

turn the chart upside down 
I bet you can spot a breakout from
a nice base 

the top is distribution
Upside down it looks like accumulation.

I’ll post tonight a chart if no one else does.


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## TechnoCap (10 March 2022)

what are you watching for breakouts techies?


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## tech/a (10 March 2022)

Potential breakouts ?
It takes me a while to construct my 
Watch list so you’ll understand my 
Reluctance in sharing it plus I know what I want from those on it to trigger a trade 
Not that straightforward 
I’ll throw a couple out tonight once I check today


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## tech/a (10 March 2022)

Only Like one and I'm already trading it.


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