Descending Triangle Breakouts - My World

[Dutchy3]

Hi

ENG and URA can't really see it ... both appear to be in a down trend .... I'm very fussy

Ran my nightly scan and can up with these ....

As an aside the best one's I see from todays close is IGC at 39 STOP 32, MLM at 95 STOP 85, watch MPS for a better close tomorrow, PKT same, RMG crazy what's that one all about?, WES for a higher close tomorrow.

Each has a better than average chance of being higher in the future ... beyond that it comes down to MM ...

 

[JeSSica WaBBit]

Love your work Dutchy,

Thanks for sharing this information, really enjoyed reading this thread and the information you have posted.

Nice one

 

[Chorlton]

Hi Nizar

By the time point 2 arrives, and the volume kicks in, the sellers are buggered. They literally no longer exist and hence the explosive move as NEW HOLDERS of the stock scramble with each other to get what little is left.

Hi Dutchy,

With ref to your quote above, would I be right in assuming that you would immediately buy the breakout rather than wait for a pullback?

PS. Do you only use Weekly charts, or do you drop down to Daily to time your entries???

Kind Regards,

Chorlton

 

[legs]

On a bigger stock, ASX.AX, could this possibly be in for a descending triangle breakout??? I cant seem to get my chart with the triangular lines to save on my PC, so couldn't post it.. although i do notice it hasnt really rallied twice, as the first peak was an original high... white candle happening today though...

 

[doctorj]

Not sure ASX qualifies yet. Refer to the attached chart.

 

[Dutchy3]

Hi Everyone

ASX - nup

Chorlton - I buy the close of the day of the breakout ... never wait for a pull back because the best stocks don't. I tipped WES a few days ago and is now a case in point on the close this week. I do trade the day chart if the weekly is showing signs ... typically I'm entering on the close of the breakout day ... perhaps with a 1/3 size position ... then on the close Friday, if the market is moving away I get very aggressive in the last 1/2 hour or so and load up ...

Another point that is usefull is to undersatnd that software packages average the look of the chart. I tipped CMO at Xmas time as it was moving.

Look at a weekly now and it's obvious ... so those studying these breakout using your own software don't load a current chart ... look at the chart as of the date of the breakout because they do not look nice and neat like they do 6 months down the track

 

[doctorj]

You make a good point - people are very good at reading historical charts and justifying why things happen like they did.

Things are never quite as clear at the right hand edge...

 

[chops_a_must]

Not sure if this has been answered or not, but just wondering what the parameters for exits are, based on your system?

 

[Dutchy3]

Hi Chops

No sorry missed it.

Here's CMO by way of explaination ...

See point (1), first reaction so ignore ...

Referred the CMO thread at this point, there where a few comments about exiting ... I find these predictable enough to hold for the first and let the panic sellers do their thing...

Point (2) far more interesting. Not really a reaction down, rather a few weeks of sideways before the BIG WHITE into NEW AIR this past week. Now a BLACK into this zone, especially on heavy volume (> 150% of the 50 period average) would have me selling too. ...

I suspect that CMO has more in it yet ... if it BLOWS OFF, I'd be tempted to unload a portion too ...

 

[zuluwarrior08]

very new to this, must thank you dutchy for a great thread... can i ask someone to direct me to some learning/reading about stage II stage 3 etc please?

thanks very much

 

[Dutchy3]

Hi Zulu

Try Bedford's 'Secrets of Candlestick Charting'. Very simple concept explained very simply.

 

[Dutchy3]

Snake asked me what the returns are like using this method ...

Here's an extract of the last 10 stocks I've picked and posted on this forum on the date of the signal day / week ...

Then it's all down to MM to make sure when I'm wrong those one are cut quickly so they don't drag on my capital

Stocks Picked and Published on Aussie Stock Forums

Date Picked Price Picked Date Now Price Now Gain / Loss % Annualised %

CSM 28-March-2007 $2.4900 16-June-2007 $2.630 $0.1400 6% 25%
ABY 04-April-2007 $2.4300 16-June-2007 $2.780 $0.3500 14% 71%
CUE 17-April-2007 $0.1550 16-June-2007 $0.210 $0.0550 35% 213%
BTA 28-April-2007 $1.7200 16-June-2007 $1.670 -$0.0500 -3%
DJS 28-April-2007 $4.8700 16-June-2007 $5.200 $0.3300 7% 50%
GTP 09-May-2007 $2.2000 16-June-2007 $2.810 $0.6100 28% 262%
ICP 13-May-2007 $0.0650 16-June-2007 $0.076 $0.0110 17% 178%
RIV 16-May-2007 $2.2300 16-June-2007 $2.800 $0.5700 26% 295%
MOS 28-May-2007 $0.1650 16-June-2007 $0.185 $0.0200 12% 225%
APA 03-June-2007 $4.4700 16-June-2007 $4.260 -$0.2100 -5%

Two are a concern ... the rest are OK

 

[alankew]

Dutchy that is a truly amazing performance.Have you done this in a bear market and if so how does the performance compare.Always look out for your posts as when you illustrate them they are incredibly easy for us beginners to understand-Love your work and heres hoping you keep helping the rest of the forum.Al

 

[Dutchy3]

Hi AK ... what's a bear market? LOL I've been at this since 1998. At Uni in 87 so that was just a bit of a giggle ...

Answer is no ... I've tried SHORTS over the years and not had the success I've enjoyed with LONGS ...

The coming months are shaping up to be shaky as momentum is running out of the XJO so really have to be very fussy ... the oliers have it for me at the mo

 

[Chorlton]

Hi Dutchy,

Thanks for your earlier reply ...

When looking for new potential chart set-ups, do you "eyeball" each chart or are you using some form of scanner to find these early set-ups??

... And out of interest, which markets do you target?

Thanks in advance,

Chorlton

 

[Dutchy3]

Hi Chorlton

Yes .. eyeball.

I use CFD's so top 400 - 500 stocks would see me out ... I use MS and so have an exploration that gives me stocks with period average of > $300,000 and this seems to suffice.

As long as I look at each chart once or twice a month (weekly chart) I see the set ups form.

Finding them is easy ... waiting for them to prove themselves can be a challenge for me as I'm one of these people that equate activity with work ... in the market nothing could be further from the truth ...

 

[nizar]

very new to this, must thank you dutchy for a great thread... can i ask someone to direct me to some learning/reading about stage II stage 3 etc please?

thanks very much

STan WEinstein - Secrets for profiting in bullmarkets and bearmarkets.

 

[jammin]

Hi Dutchy, Thanks for the thread and all the information you have shared.
Attached is a descending triangle forming in KIM. The breakout would appear to not meet your entry criteria as the day of breakout and subsequent days are not strong white candles though the volume kicked up a bit. Any comments?

 

[Dutchy3]

Hi jammin

Yes ... downtrend line far too steep ...

Also trading below the 30 week moving average so never going to be on my radar for a long entry ....

Interestingly KIM could actually be finding a bottom. Not a Decending Triangle though. Be very circumspect and let the chart tell its own story ...

 

[zuluwarrior08]

Hi Zulu

Try Bedford's 'Secrets of Candlestick Charting'. Very simple concept explained very simply.

STan WEinstein - Secrets for profiting in bullmarkets and bearmarkets.

Thanks very much guys. much appreciated. Ive been reading this forum for the past weekend and must say am so glad Ive found it. Its been really hard to find people who are interested in trading/shares etc. and I think this is how I might be able to surround myself with like minded people. Not to mention how much Ive learnt just reading these threads.

Dutchy I use a very similar method, except I also use shares that are trading in a horizontal resistance and support levels. I trade CFDs too and find it allows me to have extremely tight stops, if the defined support is broken then I know ive made a mistake. Im still learning plenty and only using very small amounts of capital.

Anyway, thanks again guys. Looking forward to more posting and learning.
Bryan