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Charting/Analysis, Phase 1

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boofis

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Hey,

Don't know if this is in the right forum section, but have read in the past of people posting up their charts with their analysis to get criticism/ideas etc.
So here's two that I've tried to start with:



 
Re: Charting/Analysis, Phase 1.

That’s the way I read it too.... resistance at 40 espec if combined with RSI 70%

Broken down trend ... the way I calculate mine anyway... highest high to recent lowest low, then adjust up retaining that angle to skim the intervening highs
Broken up through 21 EMA
Reasonably high vol
My Mood change ribbon (my own weighted mixture of EFI, RSI, Vol/price envelope, Guppy MMAs) has turned from a long run of Pink to Green(up)

I got a tentative buy on 23 Dec , confirmed on 28 Dec

But who knows? Follow the trend, but maintain your SLs to lock in any profit. You can always jump aboard again.

Good luck mate.
 

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Re: Charting/Analysis, Phase 1.

I can't find much wrong with either analysis:
Support 33c, primary resistance 40c, confirmed buy area 36-37;



however, in my experience,, a setup like this will often present an opportunity to stock up more for less than today's trade range. Moves like this tend to retrace by around half of the range; those retracements I usually trade off a 30-minute Intraday chart such as this:



Applying the same principle to Thursday's range, when primary resistance was 38.5c, would have suggested a buy order at 36.5c (Fibonacci 61.8%).

 
So, that was Phase 1: finding where an entry could have a reasonable chance of success.

Are we ready for Phase 2: Avoiding a larger-than-necessary loss and maximising profit?

I'll only touch briefly the question of position sizing; people's risk tolerance varies considerably. As a simple rule, consider the basic Maths that calculates the potential loss and then invert that formula:
Say, we bought SDL at 37c and set a stop at 35c. At 2c a share, every 10,000 shares will then put $200 at risk (leaving aside brokerage and slippage). So, if I'm comfortable to risk $1,000, I can start building a position of up to 50,000 shares.
Note that nobody forces me to buy them all at once. I often start small, and if the trade moves in the right direction, I'll average up - carefully stepping up my stop-loss level accordingly.

Where do I set the stop level?
That, too, doesn't have a single answer, but depends on personal preference and experience. However, all stop strategies must have two attributes in common:

  1. A Stop must always move upwards with the sharepreice; never "fudged" down.
  2. Once a stop condition is triggered, it must be obeyed.
If you find over time that you're often stopped out unnecessarily, it's time to modify the formula by which the stop is calculated. Likewise, it's no shame to correct a decision that turns out disadvantageous.

For my stops, I use the lower (green) envelope line shown in the charts below. If I entered by the 30-minute Intraday chart, the green line of that same chart delivers the stop. If I entered based on the Daily chart, it's the green line on that one. Regardless of the price I paid for my position, the stop is based on a number of days (usually 2 1/2 or 3) that I am happy to absorb a move against my interest. The exact formula that I apply is proprietory. But as mentioned before, it's not so much the way it's calculated, as it is the discipline with which it is obeyed when triggered.
 
Re: Charting/Analysis, Phase 1.


What would you have calculated as a possible low of the retracement? I'm not sure I have comprehended your suggestion completely: SDL on 28th, hi 0.38, lo 0.35 so one might expect a retracement of 0.3/2 ? e.g. a SP of 0.35 - 0.15? or have I misunderstood?

Position sizing is one thing I am trying to dedicate alot of thought too but have been struggling to find as much information as I was hoping. The reason for my interest being due to a less than ideal trading capital at this stage.

Haven't been able to write the code for the stop loss I would like to use (due to being too inexperienced) but here it is in words/logic: I'd like to have two 'parts' to it, set a minimum dollar value of profit necessary, and for me this would be say $200 after brokerage, and be fairly tight until (If) that amount is reached. Then have it so that after that value is reached, to 'loosen off' if the chart is still looking 'good'. Don't know if that's a silly idea but here's my reasoning: I have a fine appetite for risk, high risk hasn't bothered me when I've had real money on trades in the past, the hard part is if I take a loss with my current capital then my next however many trades would be up the creek because of an even smaller position size.

Thanks for the input Pixel!
 
SDL

Pulled along by commodities
Showing nothing ( in my opinion) technically that shows
A sustained move.


TLS

Safe haven investors following.
Channel indicates confidence.

Neither are stocks I would trade.
Both are tradeable as posters have shown.
I would not analyze SDL in the manner as presented.
( I don't use MACD or most conventional analysis indicators/oscillators)
But most do.
 
tech/a said:
Neither are stocks I would trade.
Both are tradeable as posters have shown.
I would not analyze SDL in the manner as presented....
Click to expand...

If you get a minute Tech/A would you mind chucking up just a few things on a chart pointing towards how you would analyze?
 
boofis said:
If you get a minute Tech/A would you mind chucking up just a few things on a chart pointing towards how you would analyze?
Click to expand...

I've written a bit in the Sticky in this section.

Been rather quiet as my wife ( health scare ) ( and myself -- mentally) have been at the top of the agenda of late.
Looks as though all clear though but confirmation in a few weeks
 
Re: Charting/Analysis, Phase 1.

Hi boofis;

sorry if I confused you. Let me expand:
Once my indicators (specifically the pink triangle; a green one would be even better) suggest a Low may be in place and a turn of trend is likely, I start drawing a Fibonacci tool from that Low to the first apparent resistance. This is an invariant, regardless of the time period I'm trading. (Proviso: Once I pick a time scale, I'll have to stick to it at least until my position is in profit.)
Then I wait for support; if it happens at 50% or above, I start buying. I can be wrong and it drops back further. Then I'm out. Take the third chart, where the pullback on Thursday stopped at the 61.8% Fib level, so I was allowed to buy at 36.5 or 37c, but would be forced to stop out if the price had dropped below the highest point of the green line.
The chart above that uses the next High as the top of the Fibonacci range; again, I'll wait where the retracement stops, before I buy. And that is regardless whether I'm already holding (Thursday's entry) or not.
As the green stop line keeps moving up (see the green horizontal next to the price axis), so does my trailing stop, ensuring that I'm quickly in profit.

Once the position is in profit on the next-higher time scale, I'm allowed to move it up. Consider it a move from speculative swing trade to longer-term investment. On the daily chart, the green line shows its top at 35c, which means my position is not yet safe, so I must continue to trade it by the 30-minute, which has the stop at 37c.

Please note that I do not anticipate what might happen, but simply observe what does happen, and then I react accordingly. If I had the means to make the market move according to my wishes or expectations, things might be different. Very different: I'd probably not even visit this Forum
 
Frankly if your analysis doesn't place you in a position to anticipate a move- the end of a move or the continuation of a move--- what on earth are you analyzing?
 
tech/a said:
Frankly if your analysis doesn't place you in a position to anticipate a move- the end of a move or the continuation of a move--- what on earth are you analyzing?
Click to expand...
good point, tech/a
my bad expression.
The sequence of indicators occurs at a stage in an intrument's life cycle, where there is a high to very high probability of the trend turning up. To that extent, you may well call it an expectation. However, I don't expect it as a 100% certainty; if the lesser probability prevails, I won't fall into the "It's got to be..." trap. Best to get out in time and look for the next opportunity.

so, let's change that to
Please note that I do not anticipate that the indicated move MUST happen, but, once I've started or thought about starting a particular trade, I keep observing what DOES happen, and then I react accordingly.
Click to expand...
 
The question then is how long
Is a signal valid.

Possibly before that the question is
How long before a signal is too late.
In other words the action is all over.

Buy sell or continuation.
 
joea said:
Pixel
I think he means what charts or stock. i.e. post 3.
I maybe wrong.
joea
Click to expand...
Hi Joe,
the beauty of the Market Analyser lies in its ability to scan the entire ASX in minutes and list only those stocks that match the criteria I'm looking for (i.o.w. that my scanning script has been written to pop up on the day the condition triggers.)
As no software can show something that isn't there, in recent days there have only been slim pickings; but every so often, a promising stock does show up, worth taking a closer look at. SDL has been one of them - although, as I mentioned earlier, the pink triangle urges caution as there is an increased chance of an early (low) resistance and, worse still, a possible drop below the stop level.
However, treating it with caution as discussed, still results in a few 10%-ers or better, while stops keep any losses negligible.
 
So a few things for clarification:
1. I have not been using a scan to narrow down the stocks which I am 'analysing'. I am merely scrolling through the asx300 trying to implement, or apply, what I have been reading about.
2. I am, at present, not taking any positions, rather, only taking 'theoretical' positions due to insufficient funds/confidence in analysis.
3. Please keep the varied opinions/discussion coming, it is invaluable for learning to hear differing opinions and why!
4. The 'scan' I've been trying to code for the ASX in Amibroker has been returning zero results for the past little while so either what I'm trying to buy into isn't present or I'm coding something wrong.
5. Tech/A: in regards to how long is a signal valuable; at this stage (This may be foolish and I know you will inform me if so which is much appreciated) I am not trying to enter at the exact turning point and exit at the optimum profit, rather, I am just trying to take SOME profit. Moving averages may miss the action but they seem to get in on SOME action. Some being enough to learn aswell as make a go of the shares at the same time This means that in 10 years time, I may a. have the knowledge to succeed as well as b. have enough trading capital to make the special lady happy
6. How do you know you've got trading in your blood; when you'd rather be analysing shares at 3:00 in the morning on new years eve than out drinking with mates haha.
7. I hope that we all have a basic understanding of probability based maths in regards to variables. Nothing can be exact with an undefined (too big to quantify) amount of variables, but there can be an amount of 'certainty' based on probabilities, no?
Thanks for the input all, keep it coming!
p.s. all the best with the personal stresses at present, never good to hear of others struggles.
 
Position sizing:
Say we have a series of 5 trades each different shares at different prices:
Scenario 1. Taking a fixed position of $5,000 in each trade.
Buy, Units, Sell, Profit/Loss
1. 1.45, 3448, 1.55 +304.4 (brokerage of $20 in and out.)
2. 0.62, 8064, 0.66 +282.2
3. 0.15, 33333,0.15 -40.1
4. 0.20, 25000,0.24 +960
5. 2.34, 2136, 2.34 -41.76
Ending capital (If nearly 100% position taken every time ha): $11,464.74

Scenario 2. Position of 20% of trading capital (20k starting capital).
Buy, Units, Sell, Profit/Loss
1. 1.45, 2758, 1.55, +234.9
2. 0.62, 6527, 0.66, +260.8
3. 0.15, 27327, 0.24,+2499.63
4. 0.20
5. 2.34

Question: What parameters can be changed, besides the obvious % of capital, to determine a passive/aggressive position size: Any resources/thoughts/inputs appreciated!
I am unsure as to the outcome as it's a bit late and maths becomes interesting at this hour, but will finish this post off at a later date!
 
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