ASX Momentum Trade Book - Part 2

[tech/a]

Great when they work out.

I'm glad you mentioned the reset with a better R/R if
It works out. I take it for granted people see why I closed
Out the trades and wait on the side lines .
UPD is a good trade.

Incidentally my MORE bars are found on lower time frames.
Not that different.

 

[peter2]

Incidentally my MORE bars are found on lower time frames.

Excellent point I'd overlooked that.

Please keep posting your weekly charts of interest. I think I'll trade a few of your charts in this thread.

 

[tech/a]

The kiss of death!

 

[peter2]

Trading update: New trades.

ALQ: The market is playing me. We've re-bought this at 8.01, iSL a little wider this time at 7.60.

SSM: Bought this BO-HR a little late at 1.49, iSL 1.35 conservative.
There seems to be plenty of supply at 1.50, but if this goes price will go higher quickly.
Note: I already own some of these (and added more) and have included them in the weekly portfolio.



I've had limit orders in to buy JIN, EHL but haven't wanted to pay higher.
This portfolio is almost fully invested with only $1436 left. This may be enough for a cfd trade if there's another promising setup.

 

[debtfree]

This portfolio is almost fully invested with only $1436 left. This may be enough for a cfd trade if there's another promising setup.

The market has been WD-DD for the last 7 weeks, is it rare to have a full book in these conditions? Are you drawing confidence that the market has not fallen below this sideways consolidation to do this? (even the 200d MA is supporting it nicely)

Cheers ... Debtfree

 

[peter2]

Yes it's rare to be fully invested long when the market filter (MF) is bearish. The MF is not an on/off switch. I use it as a dimmer switch to reduce portfolio heat when conditions are bearish. You've seen that I 've not traded too much and kept the portfolio heat low. After the recent ordinary batch of results I'm now intentionally trading stocks that are not so correlated to the index (less large caps, more small/mid caps). I'm also trying to avoid getting mugged during this reporting season.

A few of our trades have started to move higher. This means we can raise their sell stops, reducing heat. As the heat is reduced we can start another trade and it's a nice surprise when we realise that we're almost fully invested. I haven't ignored the bearish MF. Our almost fully invested portfolio is due to our careful approach (using the MF) and a bit of good fortune to be holding stocks that are going up.

Depending on what happens today our portfolio heat will be 3 - 4% at a time when our portfolio is near an equity high.

I hope you can understand the subtle way I use the MF in these tricky conditions.

 

[peter2]

EOW 130 update: ASX Momentum Portfolio +69.7% (98% invested in 6 trades)
Benchmark index: SPAX2F15 (Incl. divs and f credits) +10.2% (past 130 wks)

This weeks sells: ALQ (-0.9R)
This weeks buys: EPD, ALQ-2, SSM

Another chronological moment has passed. This thread has been going for 130 wks (2.5 years). Coincidentally the portfolio hits another equity high. The recent six month period ended with average stats.



The index remains in its sideways range in spite of new highs in BHP and RIO. The banks, especially CBA, are struggling and the index can't go up without them. There are charts with rising prices and it's our job to find them.

ALQ: The market played with our sell stop during the week and we took the disciplined exit on the open only to see later that price rallied all day. We've started another BO-NH trade in ALQ this week with the iSL slightly lower.

Outlook: WD DD. Our market filter remains bearish and the comments about my application of the filter (prev post) are worth reading if you haven't already. The filter is bearish due to the higher volatility and won't change until the index breaks through the top of it's range.

 

[Boggo]

EOW 130 update: ASX Momentum Portfolio +69.7% (98% invested in 6 trades)
Benchmark index: SPAX2F15 (Incl. divs and f credits) +10.2% (past 130 wks)

Nice work Peter, well done

 

[peter2]

Trading update: One trade closed as another opens.

FBU: Our daily trade closed as price tumbled through our sell stop. Our sell stop was raised to the low of the day after the chairman sent a letter to shareholders apologising for their poor management. Surprising to me that didn't drop the price until today's missile sent our market falling. Sold at 7.50 after the 7.55 trigger alert. This is also a defensive sell as our market filter is bearish. Our weekly trade in FBU is not affected.


JIN: Bought at 2.90, iSL placed very conservatively at 2.60 to allow us to hold through pending XD.

Note: Too late and missed out on EHL.
Decided to buy JIN in preference to UPD today.

 

[peter2]

Trading update: Trade closed

CLQ: Sold at 0.90 as price failed to hit our T2 target and returned to our exit trigger that was raised as price neared T2. This was our second attempt in CLQ for results of -0.4R and now +1.2R.
Our weekly trade remains open and the TS will be raised to BE at EOW.

 

[peter2]

Trading update: New trade and lots of promising opportunities in the market right now.

MAH: Bought BO-NH at 0.185, iSL at 0.165.
Thought this was still fighting takeover from CIM. Not so.


Other setups available now:
CSL: Pull-back in a strong weekly trend. BO-HR (ledge)
NUF: Reversal BO-HR another ledge that provides a low size risk
BGA: Looking likely to BO > 7.00 soon.
ALQ: Looking likely to BO > 8.00 again
SEN: A real specky that looks interesting.

I could go on and that's why I have and apply capital risk limits. Reign it in P2.

 

[peter2]

EOW 131 update: ASX Momentum Portfolio +69.1% (85% invested in 6 trades)
Benchmark index: SPAX2F15 (Incl. divs and f credits) +10.1% (past 131 wks)

This weeks sells: FBU (-0.5R), CLQ (+1.2R)
This weeks buys: JIN, MAH

This week the market and our portfolio ended about the same as they started. We've got six open trades in small/med cap stocks that shouldn't react with the daily gyrations of the market. All of them are poised and look likely to go higher. We've got more cash available but we've risked as much as we're comfortable with in the present market conditions. I'm becoming more bullish and with plenty of opportunities available it would be easy to over extend and risk more than we should. We will risk more when we're able to raise a few exit triggers and reduce the current portfolio heat.

Outlook: WD DD. Remains bearish as the index stays within this range.

 

[peter2]

Observation: Going through this afternoon's scan results I've noticed a plethora of promising trading opportunities. I've really had to restrain myself from starting a few more trades. Many of these trades were on higher priced stocks that we would have used cfds. There were a few at low prices as well. There are a lot of stocks sneaking higher while the index flounders along in it's range. Do we start more because we've got the cash?

Is this feeling "the fear of missing out", greed or urgency due to a self imposed target. It could be all of them.

Our portfolio contains a few trades that have gone nowhere (ALQ, SSM, JIN) and a few going up very slowly (CAJ, EPD, MAH). The new setups appear more promising. New setups always appear more promising than the ones you're holding.

The real issue is risk. How much are we comfortable risking in these market conditions? Even though all these current setups make me feel bullish, the market generally is stuck in a range and has been for months. I been monitoring my portfolio heat for years and I know what my comfort levels are in all market conditions. It would be easy for me to start a few more and push my risk tolerance a little, but if the market goes down violently for any reason I'd be rushing for the exits like everybody and there'd be no buyers!

There are plenty of trading opportunities now. There will be plenty of opportunities next week and in the future. Don't let your emotions make you ignore your risk management or modify your trade management.

 

[peter2]

The observation that preceded the last one: I was having a conversation about price gaps and what I thought about trading them. I like them and think they have great potential for a disciplined trader. It got me thinking and today I've been going through charts looking for gaps and thinking about a set of rules to trade them.

Then it was time for my pm scans which I try to do everyday even if I'm fully invested. That's when I noticed how many BO opportunities were out there and how many have triggered recently. With so many BO opportunities, why am I looking at gaps?

Once an analyst always an analyst. Gaps that remain unfilled, can preceed great BO-NH setups. Maybe I can include that in my BO checklist to improve the probability of a winning trade?

 

[rb250660]

Something I'm experiencing recently is far fewer signals and trades out of my mean reversion systems. Also my momentum trades are ticking further into profit. Small Ordinaries popped its head above this recent sideways range too and at a 230 day high yesterday.

 

[Roller_1]

Something I'm experiencing recently is far fewer signals and trades out of my mean reversion systems. Also my momentum trades are ticking further into profit. Small Ordinaries popped its head above this recent sideways range too and at a 230 day high yesterday.

My MR systems have been flat all year and fewer trades compared to other years

 

[rb250660]

My MR systems have been flat all year and fewer trades compared to other years

I've heard the same from another trader I know too.
However mine made a fair bit of money this year up until EOFY. After that flat. The momentum trades have stepped in and are make the money now.
Another trader I know who trades trend/breakout was flat all year up until a month ago, now he's making profit.
There's clearly a theme here.

 

[peter2]

Thanks for the feedback. I'm always interested in how other methods are going in tricky market conditions.

I mentioned yesterday that I had a few setups suitable for cfds. I'll present them for educational purposes only. They will not be included in this thread's portfolio. They will be included in mine.

CSL: Classic BO-HR of ledge pattern. Target provides >2R potential.
CCP: Great symmetry between SRL, abc correction to fib buy zone. Target thin but may provide more if the price swing is impulsive.
ORI: Another chart with corrective swing ending and next move higher resuming.

Trade management will allow price to move up but not down by very much.

 

[Cam019]

Nice setup with that volume range control bar on ORI, Peter. I'm assuming here that your CFD iSL's are in the market. How come the iSL looks to be right on that nice round number of 20? Wouldn't it be prudent to have it at 19.95?

EDIT: I just saw that 19.79. Is that the iSL?

 

[peter2]

EOW 132 update: ASX Momentum Portfolio +71% (85% invested in 6 trades)
Benchmark index: SPAX2F15 (Incl. divs and f credits) +9.5% (past 132 wks)

This weeks sells: nil
This weeks buys: nil

The index finished the week a little lower, but our porfolio finished higher and a new equity high. This time it was our trade in ALQ that pushed the value up. The TS's on EPD and ALQ have been raised and this reduction in downside exposure allows us to start another trade next week.

We'll be looking for another small/mid cap as the XSO and XEC are going up.

Outlook: WD DD. Remains bearish as the index stays within this range (copied this from last weeks post).
I hope you can see the benefits of a portfolio (or trade book). Last week it was CLQ that gave us a gain. This week it was ALQ. Next week, who knows, but we've got six trades open and it'll only take one of them to move higher to boost our performance.