How I trade

beamstas · 4 May 2009

A few people have asked me to put up some charts to show how i trade
So i'll stick a few in here so people can come and tell me how bad i am

I'll simply post a chart if it's a buy, and update it with a little commentary every day, as well as including where i have moved the stop and things like that.

It won't be comprehensive and i won't show all my trades (don't have the time or desire to upload them all). I'll just randomly select a few charts to upload and we will go from there

Ok lets get started.

What indicators i use

Price
Volume
Stochastics

I don't really look at much else. Price and volume are the main two, sometimes the stochastic will catch my eye and i'll have to take a bit of notice

I also like to look at Elliott Wave occasionally.

I firmly believe nobody can predict the market with any degree of certainty. Therefore im not really phased by how i actually enter the market, for all i care i could enter on what the taxi driver says. All i do is try and minimise my losses and let my winners run. I operate with a very low win rate so most charts i post will probably not be winners.

Ok so lets go with the charts

IDL
4th May: Volume dropping in a nice triangle. Will buy on a breakout from the top at $0.20 and place a stop loss at $0.18

FMG
4th May: Trade was initiated on this one today. Took an agressive entry due to the nature of the volume and price at the time. I'll continue to walk through this trade. Stop moved to $2.39.

I'll be adding more charts as i feel like it
And will update my commentary daily

Cheers
Brad

db96 · 4 May 2009

G Day Brad

For FMG, do you have a target exit like the upper trend line or will u exit on a trailing stop loss? How much $ will u be risking on this trade? Cheers

skyQuake · 4 May 2009

Hey Brad, imo do some backtesting on the stochastics. Many people have thrown away lots of money following it, so you should at least see if it works for FMG.

It was on Very oversold all the way down from $13. Just be aware that stochs aren't that great when stuff trends.

beamstas · 4 May 2009

db96 said:
G Day Brad

For FMG, do you have a target exit like the upper trend line or will u exit on a trailing stop loss? How much $ will u be risking on this trade? Cheers

The $ risk for the trade is 10 cents ($2.39-$2.29). My stop loss is at break even now the trade is risk free. The dollar amount risked is 2% of my account

I will let the market take me out of the position with my stop loss and i don't have a profit target.

If we smash through that gray line on high volume i will most likely give the market a little bit more room to move and try and get on a larger trend.

Cheers
Brad

beamstas · 4 May 2009

skyQuake said:
Hey Brad, imo do some backtesting on the stochastics. Many people have thrown away lots of money following it, so you should at least see if it works for FMG.

It was on Very oversold all the way down from $13. Just be aware that stochs aren't that great when stuff trends.

I don't use Stochastics as a rule for finding oversold & overbought stocks as you are quite correct they will remain oversold/overbought in a strong trend for a prolonged period of time and don't really help at all

I'll probably show a couple of trades where i use stochastics, but basically im looking for divergence

Cheers
Brad

Nero64 · 4 May 2009

Hi Brad,

What was your buy price on FMG - (Sorry just saw above reply)

Also

who is your broker?

and I assume since you use tight stop losses you don't look at financial reports or think of holding long term?

Since you trade short term and on price do you have an expectancy figure?

beamstas · 4 May 2009

Nero64 said:
Hi Brad,

What was your buy price on FMG - (Sorry just saw above reply)

Also

who is your broker?

and I assume since you use tight stop losses you don't look at financial reports or think of holding long term?

Since you trade short term and on price do you have an expectancy figure?

Hi Nero

If you take a look at the FMG chart the green line represents my buy price (which was $2.39)

I don't look at Financial Reports or anything like that. For example IDL, i don't actually know the company name, what they do, where they are based and what type of assets they have. All i know is the 3 letter code.

Currently im using GO Markets but change around quite a bit. In the process of moving over the MF Global.

Cheers
Brad

beerwm · 4 May 2009

good stuff Brad,

Do you have any pre-set conditions,

like - only trade ASX200 trades, only energy stocks, or something similiar.

also - are they dependant on the XAO/XJO uptrending lately, or would u have taken these positions throughout last year.

beamstas · 4 May 2009

beerwm said:
good stuff Brad,

Do you have any pre-set conditions,

like - only trade ASX200 trades, only energy stocks, or something similiar.

also - are they dependant on the XAO/XJO uptrending lately, or would u have taken these positions throughout last year.

Mainly asx300 but do look outside the square if something comes up
I do take notice of the broader market, but generally ignore it. Alot of the time im trading shares that are under $2 so the broader market doesn't have such a large affect, as it would on something like RIO or BHP
Would have taken all my trades over the last year no matter the timing.

Cheers Mate
Brad

nunthewiser · 4 May 2009

beamstas said:
In the process of moving over the MF Global.

Cheers
Brad

uses MF via etrade platform ....... DMA

... limited number of stocks to trade BUT at least the goal posts dont move

beamstas · 4 May 2009

nunthewiser said:
uses MF via etrade platform ....... DMA ... limited number of stocks to trade BUT at least the goal posts dont move

Exactly right mate
I am on DMA with Go Markets and so far no real complaints though

Here's another one i'll put up

FLX
4th May: Using quite an agressive entry on this one due to the strength of the broader market today. Buying on a breach of todays highs $11.66, and a stop loss below the recent low at $10.84. It's a nice little triangle sitting above support

What i am trying to do is weigh up the chance of being stopped out during noise to having a stop too wide that doesn't allow a big enough position. I want to get the stop as close as i can without risking being stopped out on a false probe down. By getting the stop closer i can buy more shares for the same amount of $ risk, therefore when the position does actually go my way i'll be riding it with alot more shares.

Cheers
Brad

ivant · 4 May 2009

Good work Brad!! I will visit this every now and then, see how you are going

Good luck. Hope you get some awesome winners early on in the post!!

tech/a · 4 May 2009

Many people have thrown away lots of money following it, so you should at least see if it works for FMG.

Like most analysis the reason why most fail using it is they simply have no idea how to apply it.
Stochastic is no exception!

I don't use Stochastics as a rule for finding oversold & overbought stocks as you are quite correct they will remain oversold/overbought in a strong trend for a prolonged period of time and don't really help at all

To the point in question.

OFCOURSE THEY WILL remain in oversold!!!Its a downtrend and you take signals ONLY WITH the trend so your looking for OVERBOUGHT.

Well done Brad on posting up some trades.

-Bevo- · 4 May 2009

Great post Brad and good job I like IDL also very nice see what plays out, are you trading US markets yet?

Bevo

beamstas · 5 May 2009

-Bevo- said:
Great post Brad and good job I like IDL also very nice see what plays out, are you trading US markets yet?

Bevo

Thanks Bevo
Im not trading the US Markets right now but will be moving some money into USD to trade US in the next few months..

Here is one more for the 4th of may

BEC
4th May: Nice little pattern with excellent volume traits. I really like yesterdays bar so i will approach this one with an agressive entry. A buy will be triggered if the price moves through $0.17 and i will place a stop loss at $0.145. Not a great deal of liquidity on this one so caution will need to be taken.

I will update my charts at the end of trading so you guys can see how things have panned out.

Cheers
Brad

beamstas · 5 May 2009

5th May

Not a great day in the market for equities with the gap up in the SPI and then gradually fading out. Current positions in this thread

IDL
5th May: Breakout confirmed with higher volume. Low close suggests there are still plenty of sellers. Trade entered at $0.20.
4th May: Volume dropping in a nice triangle. Will buy on a breakout from the top at $0.20 and place a stop loss at $0.18

FMG
5th May: Still hoping for a break of the triangle on increased volume.
4th May: Trade was initiated on this one today. Took an agressive entry due to the nature of the volume and price at the time. I'll continue to walk through this trade. Stop moved to $2.39.

FLX
5th May: Very high gap up for FLX, with the price just fading lower all day. Trade entered at $11.89, insted of $11.66 which was planned. This takes the risk from 2% of portfolio to 2.56%. As we don't want to risk that much we can either sell 22% of our position which will bring our risk back to 2%, or move the stop up and cut out 50% of the risk. I'd be inclined to move the stop up to $11.25, which will save on brokerage and still give it a chance to move in our favour with a full position. No-one knows what the market will do tomorrow so i'll just give this one every chance to get on with it.
4th May: Using quite an agressive entry on this one due to the strength of the broader market today. Buying on a breach of todays highs $11.66, and a stop loss below the recent low at $10.84. It's a nice little triangle sitting above support

BEC
5th May: No changes for this one yet
4th May: Nice little pattern with excellent volume traits. I really like yesterdays bar so i will approach this one with an agressive entry. A buy will be triggered if the price moves through $0.17 and i will place a stop loss at $0.145. Not a great deal of liquidity on this one so caution will need to be taken.

Cheers
Brad

beamstas · 5 May 2009

Ok guys
Here is one i'll refer to as "bread and butter"

ASB
5th May: I am expecting the broader market to roll over in the next few days, so i am quite bearish on equities. This one is really asking to be shorted. The price will normally fall out the bottom of a rising wedge in an uptrending market, so we can expect with reasonable probability that the prices should probe lower in the near future. Another thing we really have to stand up and take notice of is the Type-A bearish divergeance, the stock has made a higher high but the divergeance hasn't. This is a prime example of using Stochastics as a trading indicator. We can expect with reasonable probability that the recent high will not be crossed. Another thing i'd like to bring to attention is the Strong Resistance shown at around the $2.70 mark, (if you don't believe me take a look at the weekly chart). I really like this setup, and with a risk of just 14 cents per share it is looking excellent.

I won't post any more charts right now as it may get out of control

Cheers
Brad

tech/a · 5 May 2009

ASB
Nice
Click to expand

SGB · 5 May 2009

I'll take a long at the $2.00 200 DMA mark

db96 · 5 May 2009

beamstas said:
Ok guys
Here is one i'll refer to as "bread and butter"

ASB
5th May: I am expecting the broader market to roll over in the next few days, so i am quite bearish on equities. This one is really asking to be shorted. The price will normally fall out the bottom of a rising wedge in an uptrending market, so we can expect with reasonable probability that the prices should probe lower in the near future. Another thing we really have to stand up and take notice of is the Type-A bearish divergeance, the stock has made a higher high but the divergeance hasn't. This is a prime example of using Stochastics as a trading indicator. We can expect with reasonable probability that the recent high will not be crossed. Another thing i'd like to bring to attention is the Strong Resistance shown at around the $2.70 mark, (if you don't believe me take a look at the weekly chart). I really like this setup, and with a risk of just 14 cents per share it is looking excellent.

I won't post any more charts right now as it may get out of control

Cheers
Brad

Hi Brad

Which Cfd provider will let u short ASB(austal)? Thanks

How I trade

beamstas

db96

skyQuake

beamstas

beamstas

Nero64

beamstas

beerwm

beamstas

nunthewiser

beamstas

ivant

tech/a

No Ordinary Duck

-Bevo-

beamstas

beamstas

beamstas

tech/a

No Ordinary Duck

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