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Thanks. I did smile this morning. I love this business.
ASX Momentum Trade Book - Part 2
- Thread starter peter2
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Thanks. I did smile this morning. I love this business.
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I'll take it that by "this business" you mean the business of trading.
Me too :iagree:
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Trading update:
S2R: Sold on this mornings gap open (+1.8R).
Surprised me also as the TH prevented us from selling at a 0.5R loss due to the falling price.
This is a discretionary exit to cash in on the opening exuberance after the overnight news. I would have missed this completely if Vsntchr hadn't told us that the news was released last night. The news didn't excite me and I watched GC continue to drift lower overnight. I was pleasantly surprised by the buying frenzy at the open.
I'll be watching the close to see if demand holds up and if there is a cause to consider a re-entry.
S2R: Sold on this mornings gap open (+1.8R).
Surprised me also as the TH prevented us from selling at a 0.5R loss due to the falling price.
This is a discretionary exit to cash in on the opening exuberance after the overnight news. I would have missed this completely if Vsntchr hadn't told us that the news was released last night. The news didn't excite me and I watched GC continue to drift lower overnight. I was pleasantly surprised by the buying frenzy at the open.
I'll be watching the close to see if demand holds up and if there is a cause to consider a re-entry.
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Trading update: The market deals another lesson in humility.
While feeling good about the S2R trade we got an alarm that the AZY trade was in trouble and by the time I looked at it, price was below our exit trigger.
AZY: Sold at 0.054 which was the initial SL and well below the exit trigger at 0.058 (Loss -1R).
EOD traders will take a bigger hit in AZY selling next open, but you won't have to sell S2R as price closed back at the open price.
Sorry for the intraday action, but sometimes IT happens. Especially after news in this thin market.
Our lessons again: Humility and always check for news on our open trades.
While feeling good about the S2R trade we got an alarm that the AZY trade was in trouble and by the time I looked at it, price was below our exit trigger.
AZY: Sold at 0.054 which was the initial SL and well below the exit trigger at 0.058 (Loss -1R).
EOD traders will take a bigger hit in AZY selling next open, but you won't have to sell S2R as price closed back at the open price.
Sorry for the intraday action, but sometimes IT happens. Especially after news in this thin market.
Our lessons again: Humility and always check for news on our open trades.
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EOW 73 update: ASX Momentum Portfolio +31.5% ( 83% invested in 6 trades ) SPAX2F15 index 0.0% ( past 73wk)
Our portfolio continues higher along with most of the market.
This weeks sells: APX (+3.0R), S2R (+1.8R), AZY (-1R with slippage)
This weeks buys: S2R
S2R: Bought again on the open with a limit order at 0.425, iSL at 0.37.
The trade risk is less than 1%. That's due to the lower buy price. We have to position size for our limit price.
I mentioned that there was a possibility for a re-buy if I saw a reason. This was worth re-buying as yesterday's close was back at the open. The initial selling had been offset by additional buying late in the day. Overnight the POG rose significantly. Unfortunately I can't mention this before the open as the market depth is too thin. Sorry.
Trade Mgt: This is now a very short term momentum trade possibility. Our TS is moved to 0.42, offsetting most of our risk (except the risk of a gap down). Minimum price target is 0.485 (+1.5R). I'm aware that price traded above this price today but I won't post an intra-day trade in this blog after doing it. This trade remains open and we'll accept the risk if the POG drops overnight.
I was looking to buy another gold stock to add to our portfolio (pull-back setup) and finding it difficult. It may be much easier to just trade gold.
Outlook: We have to be bullish with the market near new highs, but I remain cautious as we're seeing many stocks getting hammered after reporting poor news (CIM, SIV, AHY) and dips in commodity prices (high volatility). Short term traders like us need to be very vigilant and aware of scheduled news dates. I seriously considered buying the BO(>2.10) in AHY recently. Our caution paid off on this occasion (avoided -3R loss). Just lucky.
Our portfolio continues higher along with most of the market.
This weeks sells: APX (+3.0R), S2R (+1.8R), AZY (-1R with slippage)
This weeks buys: S2R
S2R: Bought again on the open with a limit order at 0.425, iSL at 0.37.
The trade risk is less than 1%. That's due to the lower buy price. We have to position size for our limit price.
I mentioned that there was a possibility for a re-buy if I saw a reason. This was worth re-buying as yesterday's close was back at the open. The initial selling had been offset by additional buying late in the day. Overnight the POG rose significantly. Unfortunately I can't mention this before the open as the market depth is too thin. Sorry.
Trade Mgt: This is now a very short term momentum trade possibility. Our TS is moved to 0.42, offsetting most of our risk (except the risk of a gap down). Minimum price target is 0.485 (+1.5R). I'm aware that price traded above this price today but I won't post an intra-day trade in this blog after doing it. This trade remains open and we'll accept the risk if the POG drops overnight.
I was looking to buy another gold stock to add to our portfolio (pull-back setup) and finding it difficult. It may be much easier to just trade gold.
Outlook: We have to be bullish with the market near new highs, but I remain cautious as we're seeing many stocks getting hammered after reporting poor news (CIM, SIV, AHY) and dips in commodity prices (high volatility). Short term traders like us need to be very vigilant and aware of scheduled news dates. I seriously considered buying the BO(>2.10) in AHY recently. Our caution paid off on this occasion (avoided -3R loss). Just lucky.
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I'm very disappointed seeing the first part of that question in this thread.
I would like to rephrase it.
Hi, Vsntchr your suggested break-out in SHL has started well, were you at all concerned by the weekly overhead resistance that is shown in this chart? Would it have prevented you from starting a trade in SHL even though the chart looks like a perfect BO-HR setup?
I would like to rephrase it.
Hi, Vsntchr your suggested break-out in SHL has started well, were you at all concerned by the weekly overhead resistance that is shown in this chart? Would it have prevented you from starting a trade in SHL even though the chart looks like a perfect BO-HR setup?
Sorry for that, I'll try to have better etiquette. I may have been trying to be brief as some people prefer short questions. The market hasn't been good too, and its future uncertain, which puts lots of pressure on beginning traders. You chart though looks better than mine. Perhaps overhead resistance wasn't as close as I thought it was (there may be enough R:R distance)
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Thanks grah33 for your understanding. No-one knows if any trading opportunity is a good idea or not and it's a beginners question that doesn't belong in this thread. I concentrated on the second part of your post.
The SHL chart shows us one of our setups and if we assess the RR as acceptable then it's a valid setup to use. Your question about the weekly overhead R is a good one and should be considered when assessing the RR. I personally wouldn't be concerned by it as it's an all time high. It's pretty bullish when price gets close to all time highs.
Yes, you're right the market has been tricky. The bouts of high volatility, especially after news has made it more difficult to earn any profit. Beginners will always find trading difficult as they haven't yet learned the basic trading skills. Beginners must apply very good risk management rules just to survive. They should forget about making money. Their goal should be to trade small and survive. They'll gain experience if they can last long enough to learn the lessons that the market provides.
Beginners also have the false expectation that they'll win every month or every seceond trade and when they don't they'll look for something to blame other than their own false and ignorant expectations. They'll forget about patience. They'll ignore appropriate risk management. They'll ditch their current trading strategy and look for another.
Right at the beginning of this thread I mentioned that this threads trading style (short term momentum trading) is difficult. That's why our TP is so important. It tells us what to do. Beginning traders should not have to make any discretionary decisions at all. They should buy and sell exactly according to their TP.
I sorry this thread hasn't helped you grah33. I hope this thread has helped others.
The SHL chart shows us one of our setups and if we assess the RR as acceptable then it's a valid setup to use. Your question about the weekly overhead R is a good one and should be considered when assessing the RR. I personally wouldn't be concerned by it as it's an all time high. It's pretty bullish when price gets close to all time highs.
Yes, you're right the market has been tricky. The bouts of high volatility, especially after news has made it more difficult to earn any profit. Beginners will always find trading difficult as they haven't yet learned the basic trading skills. Beginners must apply very good risk management rules just to survive. They should forget about making money. Their goal should be to trade small and survive. They'll gain experience if they can last long enough to learn the lessons that the market provides.
Beginners also have the false expectation that they'll win every month or every seceond trade and when they don't they'll look for something to blame other than their own false and ignorant expectations. They'll forget about patience. They'll ignore appropriate risk management. They'll ditch their current trading strategy and look for another.
Right at the beginning of this thread I mentioned that this threads trading style (short term momentum trading) is difficult. That's why our TP is so important. It tells us what to do. Beginning traders should not have to make any discretionary decisions at all. They should buy and sell exactly according to their TP.
I sorry this thread hasn't helped you grah33. I hope this thread has helped others.
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It's a great thread to follow Peter2. As you have said (in other words), you need to survive the market before you can expect to thrive in the market. My recommendation to grah33 is to focus on what he/her is doing as a trader and forget about the commentary that is everywhere in the media and online. It's within that the answers are rather than something you will find from another source.
(Nort's post got in just before mine...slightly edited)
it's definitely helped me. if not i wouldn't be checking up on it. i got some really good tips like 3 atr stop loss and leaving stops out of market, and several other things too that i could mention. the former was very helpful since the stops in the main trading books are more tighter and don't seem to work well. perhaps 2 atr was something used in the past, but isn't the case anymore due to a deficient stock market. it may be that the weekly timeframe is more profitable as you say.
with all this talk of helicopter money and stock market short circuiting , and the asx rallying alongside a bonds rally the future doesn't look good . i guess i'm a bear. i wonder how the new investors will go .seems even worse for them. looks like the government and wall street wrecked it for everyone. I wonder what will happen this year.
i wasn't too concerned about trading before during the recent bull market (as the weekly trend was down) but i've come on the scene again now that the weekly trend is up. when both weekly and daily is up then it's share trading time (but yeah, would have been good to be in that little bull spurt not long ago). currently doing good. on about 7R (trading small test positions). might have been about 10R if not for brexit and a stock split which i was just too busy to manage properly (small positions so not that important). thanks again for all the help.
it's definitely helped me. if not i wouldn't be checking up on it. i got some really good tips like 3 atr stop loss and leaving stops out of market, and several other things too that i could mention. the former was very helpful since the stops in the main trading books are more tighter and don't seem to work well. perhaps 2 atr was something used in the past, but isn't the case anymore due to a deficient stock market. it may be that the weekly timeframe is more profitable as you say.
with all this talk of helicopter money and stock market short circuiting , and the asx rallying alongside a bonds rally the future doesn't look good . i guess i'm a bear. i wonder how the new investors will go .seems even worse for them. looks like the government and wall street wrecked it for everyone. I wonder what will happen this year.
i wasn't too concerned about trading before during the recent bull market (as the weekly trend was down) but i've come on the scene again now that the weekly trend is up. when both weekly and daily is up then it's share trading time (but yeah, would have been good to be in that little bull spurt not long ago). currently doing good. on about 7R (trading small test positions). might have been about 10R if not for brexit and a stock split which i was just too busy to manage properly (small positions so not that important). thanks again for all the help.
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Reviewing the chart of one of our open trades (IMF) prompts me to try to explain another subtlety when using price targets.
+1R target: Don't use it unless your W% > 55%. This thread's W% is 41%, so routinely selling at this level is a losing strategy.
However, we can sell at this level when this level is a trailing stop level and we've let our profit get bigger and now we're protecting +1R. We may sell at +1R when using leverage or extra margin ( >100% invested) and the initial aim of the trade was a quick profit in a few days.
+2R target: You've seen me sell at this level because it's higher than our Ave Win and when market conditions are volatile (like now).
The current price of IMF is near it's +2R target (see chart) and market conditions are tricky.
Are we going to sell at 2R? No.
The reason we won't sell at 2R is because price has recently broken out to a new high. This is a bullish break-out and is a valid buy signal according to our TP. If we had bought this BO-NH, would we have sold so quickly? No, of course not. We'll wait to see what happens to the price after the BO and see if it gets to our 3R level. This is the next logical target.
The subtlety I'm trying to explain is to move your price targets higher when price needs a break-out to hit them.
+1R target: Don't use it unless your W% > 55%. This thread's W% is 41%, so routinely selling at this level is a losing strategy.
However, we can sell at this level when this level is a trailing stop level and we've let our profit get bigger and now we're protecting +1R. We may sell at +1R when using leverage or extra margin ( >100% invested) and the initial aim of the trade was a quick profit in a few days.
+2R target: You've seen me sell at this level because it's higher than our Ave Win and when market conditions are volatile (like now).
The current price of IMF is near it's +2R target (see chart) and market conditions are tricky.
Are we going to sell at 2R? No.
The reason we won't sell at 2R is because price has recently broken out to a new high. This is a bullish break-out and is a valid buy signal according to our TP. If we had bought this BO-NH, would we have sold so quickly? No, of course not. We'll wait to see what happens to the price after the BO and see if it gets to our 3R level. This is the next logical target.
The subtlety I'm trying to explain is to move your price targets higher when price needs a break-out to hit them.
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Trading update: New trade
BOL: Bought today's BO at 0.094, iSL is 0.088.
There is not much apparent support below 0.090 in the mkt depth so we'll have to be vigilant.
BOL: Bought today's BO at 0.094, iSL is 0.088.
There is not much apparent support below 0.090 in the mkt depth so we'll have to be vigilant.
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Recent guidance from APE has been digested by the market. My interpretation was that there was a seller in there that used the liquidity to get out. A couple of bigger trades yesterday looks to have cleared the line.
Consolidation looks to be broken to the upside now:
View attachment 67541
Like SHL, there is some overhead resistance, however in this case I feel the recent price action is more relevant to focus on given the recent news and consolidation.
Well done on BOL
Ripper trade right from the get go!
Some other charts of interest: API, RXP, MNF.
Consolidation looks to be broken to the upside now:
View attachment 67541
Like SHL, there is some overhead resistance, however in this case I feel the recent price action is more relevant to focus on given the recent news and consolidation.
Well done on BOL
Ripper trade right from the get go!Some other charts of interest: API, RXP, MNF.
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Trading update:
S2R: Favourable SPP for the retail traders and we've earned the right to participate, but these details are not part of this thread. We've sold near the close at 0.53 and I'm pleased to get it, considering many other gold stocks have dropped today with the gold price. Our two trades in S2R have provided +1.8R and +2.4R or +$2308 (+4.6%). I've sold my remaining half as well. If you'd like to stick with the company that's OK. The recent price rise in S2R is all due to company specifics rather than the gold price.
Our initial purchase of S2R was at 0.315 and finally sold at 0.53, while enduring two trading halts, good drill results and a capital rasing. Yes, we've earned our momentum profits.
BOL: Started well, but there wasn't enough volume traded for us to sell at our T2 target (0.11). We'll hold on and see if we can get better. On the way down there was a lot traded at 0.12. That might provide some resistance and a rewarding initial target.
We've completed 120 trades and I'd like to show you the performance of each batch of 20 trades.
I've mentioned the importance of consistency and that table shows it nicely.
I don't need to do 100 trades to know if a strategy is going to be profitable or not. Twenty trades is enough. Mark Douglas in his book "Trading in the Zone" suggested the idea of considering your trading in batches of twenty for two reasons. Firstly, the current trade or the next one is not overly important as they are only two trades within a batch of trades. Secondly, he challenged readers to stay committed to the same method for twenty trades before considering any changes.
S2R: Favourable SPP for the retail traders and we've earned the right to participate, but these details are not part of this thread. We've sold near the close at 0.53 and I'm pleased to get it, considering many other gold stocks have dropped today with the gold price. Our two trades in S2R have provided +1.8R and +2.4R or +$2308 (+4.6%). I've sold my remaining half as well. If you'd like to stick with the company that's OK. The recent price rise in S2R is all due to company specifics rather than the gold price.
Our initial purchase of S2R was at 0.315 and finally sold at 0.53, while enduring two trading halts, good drill results and a capital rasing. Yes, we've earned our momentum profits.
BOL: Started well, but there wasn't enough volume traded for us to sell at our T2 target (0.11). We'll hold on and see if we can get better. On the way down there was a lot traded at 0.12. That might provide some resistance and a rewarding initial target.
We've completed 120 trades and I'd like to show you the performance of each batch of 20 trades.
I've mentioned the importance of consistency and that table shows it nicely.
I don't need to do 100 trades to know if a strategy is going to be profitable or not. Twenty trades is enough. Mark Douglas in his book "Trading in the Zone" suggested the idea of considering your trading in batches of twenty for two reasons. Firstly, the current trade or the next one is not overly important as they are only two trades within a batch of trades. Secondly, he challenged readers to stay committed to the same method for twenty trades before considering any changes.
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Trading update: Closing a few trades due to falling prices.
A2M: The close <1.80 nullifies the break-out. Sell next open.
AYS: Another break-out nullified. Sell next open.
IMF: Unfavourable news causes some selling. Sell next open.
NVT: Sell next open, limit 5.85 (T1)
It's unusual to close so many trades at the same time without the general market falling, but we'll follow our TP and protect our portfolio value.
A2M: The close <1.80 nullifies the break-out. Sell next open.
AYS: Another break-out nullified. Sell next open.
IMF: Unfavourable news causes some selling. Sell next open.
NVT: Sell next open, limit 5.85 (T1)
It's unusual to close so many trades at the same time without the general market falling, but we'll follow our TP and protect our portfolio value.
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Trading update: Trades closed and a new one.
APE: Bought at BO-HR level (12.20), iSL 11.50.
Note: I'll be keeping an eye on the AYS, A2M and NVT charts for re-entry setups. The volatility (and thin MD) may have caused us to sell before price hit our exit triggers, but taking small losses and being prepared to re-buy is part of our edge.
APE: Bought at BO-HR level (12.20), iSL 11.50.
Note: I'll be keeping an eye on the AYS, A2M and NVT charts for re-entry setups. The volatility (and thin MD) may have caused us to sell before price hit our exit triggers, but taking small losses and being prepared to re-buy is part of our edge.
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Trading update: New trades
TPP: Bought today's break-out at 0.255, iSL is 0.21.
MYX: Bought today's BO at 2.03, iSL is 1.90
TPP: Bought today's break-out at 0.255, iSL is 0.21.
MYX: Bought today's BO at 2.03, iSL is 1.90
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EOW 74 update: ASX Momentum Portfolio +31.1% ( 76% invested in 5 stocks ) SPAX2F15 index +1.1% (past 74wk)
The portfolio maintain its value after a bit of schuffling. Our benchmark index finally gets back above zero thanks to the divs and franking credits (~6%).
This weeks sells: IMF, NVT (+1R), A2M, AYS (small losses)
This weeks buys: BOL, APE, TPP, MYX
BOL: May not last long as supply seems to have overcome the fleeting demand.
Outlook: Still cautiously bullish as we're at new highs and still in reporting season.
I may have closed A2M a bit quick, we'll see and we can re-buy it if it makes a new high (1.90).
The portfolio maintain its value after a bit of schuffling. Our benchmark index finally gets back above zero thanks to the divs and franking credits (~6%).
This weeks sells: IMF, NVT (+1R), A2M, AYS (small losses)
This weeks buys: BOL, APE, TPP, MYX
BOL: May not last long as supply seems to have overcome the fleeting demand.
Outlook: Still cautiously bullish as we're at new highs and still in reporting season.
I may have closed A2M a bit quick, we'll see and we can re-buy it if it makes a new high (1.90).
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Nice work Peter 
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