# US Stocks - Short Trade Patterns



## CanOz (8 April 2009)

Looking for someplace to post some of the short and long oppotunities i find in the US at the moment.

Heres a short for tonight. I have a stop sell limit entry if the low of last night gets busted, a stop above the high.

I'll start a long trade thread once i see some worth taking.

Cheers,


CanOz


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## johenmo (8 April 2009)

good luck.  will follow with interest.
Cheers


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## CanOz (8 April 2009)

johenmo said:


> good luck.  will follow with interest.
> Cheers




Loaded up, DIS, YRCW are active, BRCD, TMX, RSG, ADS.

Cheers,


CanOz


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## MRC & Co (8 April 2009)

Hey Can,

That is a daily chart yeh?

Anyway of zooming in on the candles so we can see them more clearly?

Gather your trying to fade both the top of the trend channel and the horizontal resistance?


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## CanOz (8 April 2009)

MRC & Co said:


> Hey Can,
> 
> That is a daily chart yeh?
> 
> ...




Exactly. Its actually a variation of MS+Tradesims code that i have been using as a scan. It has even more success when its used with S&R and patterns too. I'm getting it coded with my entries and trailing stops, in the meantime its a great scan. 

CanOz


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## MS+Tradesim (8 April 2009)

CanOz said:


> Exactly. Its actually a variation of MS+Tradesims code that i have been using as a scan. It has even more success when its used with S&R and patterns too. I'm getting it coded with my entries and trailing stops, in the meantime its a great scan.




See...I said I hope you find it useful. 

I use it primarily in conjunction with broad market movement, so advance/decline adds value.


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## CanOz (8 April 2009)

MS+Tradesim said:


> See...I said I hope you find it useful.
> 
> I use it primarily in conjunction with broad market movement, so advance/decline adds value.




Thanks, good advice. Its almost like an indicator of broader market as well though, depending on what your scan results are. I have not seen a buy for a few days in any of the markets i scan.

Very clever but simple idea MS, well done and thanks again for the code.

I'll give you a copy of my system when Kavemen finishes it, AmiBroker and MS are quite similar in some of the basic code, anyway, my system will be very simple.

Cheers,


CanOz


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## MS+Tradesim (8 April 2009)

Yeh, I find simple works well. 

I check advance/decline as there can be a lot of false signals in strong trending moves.  I'm going to do some more work on the core idea in the near future. There are some factors I want to refine. I'd be interested in seeing what you come up with.


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## CanOz (8 April 2009)

MS+Tradesim said:


> Yeh, I find simple works well.
> 
> I check advance/decline as there can be a lot of false signals in strong trending moves.  I'm going to do some more work on the core idea in the near future. There are some factors I want to refine. I'd be interested in seeing what you come up with.




I plan to keep you informed, i owe you that much, it was a nice gesture to give out that code.

Cheers,


CanOz


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## MRC & Co (9 April 2009)

No interest in this thread, but no wonder your profitable MS!

Taking into account the broader market (which you have to if your trading individual stocks I think) and using support/resistance points, particularly fading the levels with tight stops, and that break through and then retest (particularly a break slightly through the resistance on the retest) is a classic pattern and I use it myself all day long.  I also heard you say you look at some form of volume.

Simple, but IMVHO, brilliant.  

GL.


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## Cartman (9 April 2009)

MRC & Co said:


> (particularly a break slightly through the resistance on the retest) is a classic pattern and I use it myself all day long.





one of my favorites as well Mirc ---- the fact that u r on these kinds of trades makes my "study" worthwhile  -----

Cana,   --- just as an example (and i didnt read the thread thoroughly so forgive me if im off track) --- i would set my short entry a few ticks/pips above the trend line (of a given cycle and at the first hint of a momentum drop) rather than just below a break of the downward trend (of a given cycle) ----

it may seem like a "punt" at face value,  but in actual fact,  if you are going to short --- the odds are better for a "get out of jail" trade (if yr wrong so to speak), by shorting at what may appear to be a "continuation" upwards --- because u r in at the top of the cycle  --- 

hope that makes some sense 

i treat trading as a gamble, so if i take a risky entry (ie a reversal of a short term counter trend) , i want it to be at the best possible position --- ie as close to a previous top (for a short) as possible 

dunno if i explained that too well -- but i think Mirc will understand what i'm babbling about --- lol ----


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## MRC & Co (9 April 2009)

Cartman said:


> i would set my short entry a few ticks/pips above the trend line (of a given cycle and at the first hint of a momentum drop) rather than just below a break of the downward trend (of a given cycle) ----
> 
> by shorting at what may appear to be a "continuation" upwards --- because u r in at the top of the cycle  ---
> 
> i want it to be at the best possible position --- ie as close to a previous top (for a short) as possible




Cartman, Can is setting his entry near the top of the range, at a break below the low of the previous candle, so not at a break of the lower trendline as would be the 'traditional' play.

But I agree with you, I short at the EXACT same time as you do Cartman.  If I'm wrong, I am out of there within a few ticks and if I'm right, well my profits will be far larger.  Very simple, but not something you see around here.  Glad your study is = to mine.


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## MRC & Co (9 April 2009)

MRC & Co said:


> No interest in this thread.




Sorry Can, this is not meant to imply I have no interest in this thread, it is meant to imply I am surprised there is no interest in this thread, considering the contents are far superior IMO than what is in 99% of other threads.


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## CanOz (9 April 2009)

MRC & Co said:


> Cartman, Can is setting his entry near the top of the range, at a break below the low of the previous candle, so not at a break of the lower trendline as would be the 'traditional' play.
> 
> But I agree with you, I short at the EXACT same time as you do Cartman.  If I'm wrong, I am out of there within a few ticks and if I'm right, well my profits will be far larger.  Very simple, but not something you see around here.  Glad your study is = to mine.




Let me see if i understand this in these terms:

I'm selling a failure or buying a bounce based on oversold/bought plus some volume and S&R. You  guys are saying you are actually selling a failed break, right?

Cheers,

CanOz


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## CanOz (9 April 2009)

MRC & Co said:


> Sorry Can, this is not meant to imply I have no interest in this thread, it is meant to imply I am surprised there is no interest in this thread, considering the contents are far superior IMO than what is in 99% of other threads.




LOL! I wondered what you meant by that

CanOz


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## James Austin (9 April 2009)

any set-ups looking good on the US for this eve, CanOz??


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## MRC & Co (9 April 2009)

CanOz said:


> Let me see if i understand this in these terms:
> 
> I'm selling a failure or buying a bounce based on oversold/bought plus some volume and S&R. You  guys are saying you are actually selling a failed break, right?
> 
> ...




lol, yes, after re-reading, I can see how it could come accross wrong, sorry. 

I am simply saying, trend (including structure), support and resistance, and volume (either at support or resistance or to confirm trend strength), is basically all I use.

In this example, if the market is trending, and this is example, that trend is down, selling a break of the resistance as in your chart (whereby the trend structure is regarded 'weak', as the LH overlaped the previous LL in a downtrend), will allow me to get on the trend and in a way which results in the quickest opportunity to decide if the trend has infact ended or not, and as such, allows me the tightest stop placement.   

This brings into play both a false break of the previous LL and as such, involves both resistance and trend structure.  

I will use volume if I am looking to buy or sell outright bottoms of a trend (however short) and to help confirm the set-up before I will enter if there is no clear structure.

As far as incorporating the broader market, just as I will tighten stops or perhaps exit a trade such as this on the SPI (a short that is), if the Nikkei takes off upwards, it may be a good idea to exit or tighten stops on a short on this stock (more useful intraday), if the index takes off upwards, assuming of course there is some kind of decent positive correlation between the individual stock and the index.

Hope this helps, something to take into consideration in your mechanical design.  

GL.


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## CanOz (9 April 2009)

James Austin said:


> any set-ups looking good on the US for this eve, CanOz??




BRCD was a short setup, it broke out nicely from the micro triangle, so to me it was a failure. Although it might be something to look at if it retests...might post it for Mr.C

Heres one thats not been filled yet. 

Heres TMX.


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## James Austin (9 April 2009)

CanOz said:


> BRCD was a short setup, it broke out nicely from the micro triangle, so to me it was a failure. Although it might be something to look at if it retests...might post it for Mr.C
> 
> Heres one thats not been filled yet.
> 
> Heres TMX.





these are all intraday US equities, 
are u using MS's system (plus your tweaks)?


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## CanOz (9 April 2009)

Kind of wish i had of played the breakout now!

BRCD - my limit order was banking on a downside break.

Cheers,


CanOz


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## CanOz (9 April 2009)

James Austin said:


> these are all intraday US equities,
> are u using MS's system (plus your tweaks)?




EOD, i don't trade them through the session, i go to bed.

Looking for reversals with MS's scan, i trade patterns too but they're are setups from either Nick or Jason Leavitt.

Cheers,


CanOz


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## James Austin (9 April 2009)

CanOz said:


> Kind of wish i had of played the breakout now!
> 
> BRCD - my limit order was banking on a downside break.
> 
> ...





*a short* at next open, 
close to 4.56 
may be not such a bad idea!?


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## CanOz (9 April 2009)

James Austin said:


> *a short* at next open,
> close to 4.56
> may be not such a bad idea!?




Careful, Wells Fargo just smashed earning expectations, Futs up 1.4%

CanOz


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## James Austin (9 April 2009)

CanOz said:


> Careful, Wells Fargo just smashed earning expectations, Futs up 1.4%
> 
> CanOz




yes, it must open below yesterdays close, to be valid, from my view.

but an upbeat dow, changes everything


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## James Austin (10 April 2009)

BRCD, didnt lose the plot in this last session.

still a short candidate if closing at/below $4.55, entry same, 
then down, down, down

we'll see, 
not a share trader and know nothing about this stock, 
just testing a new system


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## CanOz (10 April 2009)

Longs did well last night and shorts got covered. Got stopped into another long too, one of Jason's setups.

Everything still overbought, makes it tough to find new setups with good potential.

Have a nice Easter!

CanOz


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## MS+Tradesim (10 April 2009)

MRC, 

I do use volume but again, in a simple way. Mainly looking for high volume on reversal bars after steady volume in the trend. Or high volume for momentum entries. In both cases I just want to go with the flow, not fight it....so order flow in the DOM actually provides the main basis on whether or not to take entry signals. I want lots of liquidity and turnover so my intended trade is always a comfortable fit, never a mover. I take my entries at the end of the day as the volume/order flow in this period provides very reliable info on short-term sentiment for the intended share. (_I just broke a 23 win streak on Tuesday. Went out with a bang too. Ended the streak with the biggest loss I've had all year, -6.5R  But that didn't hurt the big picture so nevermind.)_ Plus by taking the close one regularly earns a gap the next day, rather than losing it by waiting for the open. 

Actually, what you and Cart said you do has given me an idea - the bit about fading potential tops/bottoms rather than waiting for the reversal. I might play around a bit with that to see if I can mechanise something. Only problem with shares is they are biased upwards so fading tops seems counter-intuitive. But I'll have a look at that, I think. Cheers.

** Signing off for the weekend. Have a good Easter guys.


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## MRC & Co (11 April 2009)

MS+Tradesim said:


> MRC,
> 
> I do use volume but again, in a simple way. Mainly looking for high volume on reversal bars after steady volume in the trend. Or high volume for momentum entries.
> 
> ...




First paragraph, think I stated it in this thread, it's the exact times I use volume also, very simple, but works well.  Appears our methods are very similar, just one mechanical and one discretionary.

Second paragraph, may be worth a look, but unsure on stocks.  Infact, I wouldn't even work on certain indicies I would think, all depends what instrument you trade IMO, I know the SPI is very choppy and has numerous false breaks, so for that reason, it works well.

Cheers


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## James Austin (14 April 2009)

James Austin said:


> *a short* at next open,
> close to 4.56
> may be not such a bad idea!?





am i on my own with this short??


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## CanOz (14 April 2009)

I'm certainly not with you mate, i stood aside on the shorts for now. All my scans could pull up were longs.

I actually changed TMX from a short to a long just before the open favoring the micro triangle to the overbought signal.

Cheers,


CanOz


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## CanOz (14 April 2009)

Here is a nice wedge pattern for tonight.

Cheers,


CanOz


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## CanOz (15 April 2009)

Heres a little micro pattern on a stock i shorted last week. I'll give it another go tonight.

Cheers,


CanOz


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## MRC & Co (15 April 2009)

Can, perhaps zoom out again on those charts, hard to judge a pattern when there is no context (which is really the most important part I think).

Also, on that second last chart, not sure how others do it, but I personally don't like tails or other things passing through my trendlines (as per the wedge).  I like them drawn from the extremes as to capture the true trend structure, but each to their own.


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## CanOz (15 April 2009)

James Austin said:


> BRCD, didnt lose the plot in this last session.
> 
> still a short candidate if closing at/below $4.55, entry same,
> then down, down, down
> ...




BRCD got hammered in the last two sessions. Has done a retest of that breakout, well done J.A.

Cheers,


CanOz


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## CanOz (15 April 2009)

MRC & Co said:


> Can, perhaps zoom out again on those charts, hard to judge a pattern when there is no context (which is really the most important part I think).
> 
> Also, on that second last chart, not sure how others do it, but I personally don't like tails or other things passing through my trendlines (as per the wedge).  I like them drawn from the extremes as to capture the true trend structure, but each to their own.




Sure, i zoom in to show the entries and stops that one could use. Perhaps i could show the big picture only.

As far as the tails go, i've drawn it differently, more of a channel. 

Not a big thing for me, its cool because I'm not trying to be right, only trying to find a place where i can risk little for larger potential.

Cheers,


CanOz


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## MRC & Co (16 April 2009)

CanOz said:


> Sure, i zoom in to show the entries and stops that one could use. Perhaps i could show the big picture only.
> 
> As far as the tails go, i've drawn it differently, more of a channel.
> 
> ...




Yeh, sorry, I asked you to zoom in and then back out.  But can see what you mean by the entries now.  

Definately, entry with a very tight stop helps a lot (and as I can see, there is a horizontal resistance up there too), only thing in that pattern, is it would be more likely IMO to form a HL and then march on up again, than a wedge or rolling top (as per SPI or S&P daily) would be.  Whereby, the targets would be vastly different.  But all tradable.  

Cheers


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## CanOz (20 April 2009)

Heres a little bearish wedge at resistance...


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## CanOz (20 April 2009)

MRC & Co said:


> Yeh, sorry, I asked you to zoom in and then back out.  But can see what you mean by the entries now.
> 
> only thing in that pattern, is it would be more likely IMO to form a HL and then march on up again, than a wedge or rolling top
> 
> Cheers




Did as you said Mr.C, I got in and out pretty quick...at a loss!

Cheers,


CanOz


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## MRC & Co (21 April 2009)

That wedge on the second last chart there, would prob have been a better shorting position to do it after the doji candle hitting the resistance.  Assuming that stock is in a downtrend (a classic Bedford set-up from what I am aware).

Last chart, what did I say on that chart?  Think I stated I didn't like the pattern, would prefer a rolling top of a legit wedge, not a trend channel?  Stop also has to be a comfortable level above a false break area, otherwise a false break will get you out.  That, or wait for the false break and then go short!


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## James Austin (21 April 2009)

CanOz said:


> BRCD got hammered in the last two sessions. Has done a retest of that breakout,
> 
> Cheers,
> 
> ...





just catching up on BRCD now.
looks like it wants to go down again.

is SOLR down to 5.40ish tonight?? = support . . . maybe pull back first, then proceed, i'll keep eye on it!


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## CanOz (21 April 2009)

Heres the chart, it closed at 6.01, the low.

Cheers,



CanOz


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## MRC & Co (21 April 2009)

MRC & Co said:


> That wedge on the second last chart there, would prob have been a better shorting position to do it after the doji candle hitting the resistance.  Assuming that stock is in a downtrend (a classic Bedford set-up from what I am aware).
> 
> Last chart, what did I say on that chart?  Think I stated I didn't like the pattern, would prefer a rolling top or a legit wedge, not a trend channel?  Stop also has to be a comfortable level above a false break area, otherwise a false break will get you out.  That, or wait for the false break and then go short!




Looks like L Bedford would have had a good entry then on that stock!  

As for second paragraph, how did you do what I said?  I didn't like the pattern for a short, the trendlines should have shown a trend channel, not a wedge IMO, as I pointed out earlier.  I said shorting a previous resistance (as per the last chart) or shorting a false break through the the resistance, would be more useful, only if the trend is down however.


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## -Bevo- (21 April 2009)

Harry Boxer had this stock (SOLR) as chart of the day end of last week
http://www.thetechtrader.com/info/charts/index.php?id=340


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## CanOz (21 April 2009)

MRC & Co said:


> Looks like L Bedford would have had a good entry then on that stock!
> 
> As for second paragraph, how did you do what I said?  I didn't like the pattern for a short, the trendlines should have shown a trend channel, not a wedge IMO, as I pointed out earlier.  I said shorting a previous resistance (as per the last chart) or shorting a false break through the the resistance, would be more useful, only if the trend is down however.




Sorry Mr.C, i'm not sure i follow you "how did you do what i said"

I had already entered the orders for the trade. I see your point now, but i trade with my eyes, however poor they may be at times. 

Cheers,


CanOz


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## CanOz (21 April 2009)

-Bevo- said:


> Harry Boxer had this stock (SOLR) as chart of the day end of last week
> http://www.thetechtrader.com/info/charts/index.php?id=340




The stock broke out from that pattern he sited, it just failed thats all. I happened to try and sell it after the failure, it gapped over my order.

CanOz


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## CanOz (21 April 2009)

Looking for a channel break here....maybe some looking for a bounce too.

Take a view on CLC.

CanOz


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## CanOz (21 April 2009)

Going to sell this failure on HERO, probably gap down over it tonight.

CanOz


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## MRC & Co (22 April 2009)

Like the HERO short.


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## CanOz (22 April 2009)

MRC & Co said:


> Like the HERO short.




Struth, did you see what it did? A quick $280 loss mate!

Thats the gap down and power up on the S&P.

CanOz


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## MRC & Co (22 April 2009)

CanOz said:


> Struth, did you see what it did? A quick $280 loss mate!
> 
> Thats the gap down and power up on the S&P.
> 
> CanOz




Nope, didn't see what it did, just from the chart, hitting the resistance overhead and on high volume followed by the down candle, looks like a good short to me.  

Of course, nothing is guaranteed.


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## -Bevo- (24 April 2009)

Hero might be forming a triangle, volume is falling could be a nice long play in the future


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