Hi Chorlton - reply follows PM
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Hi Dutchy,
I hope you don't mind me emailing you but after reading your above thread, I wanted to ask you a few questions about your approach.
Firstly, I'd just like to say that I definately like your set-ups as it encompasses the elements of trading that I think are vital for making consistant profits such as the abilility to read the Price / Volume relationship and using this relationship to find low-risk entries.
From what you have kindly posted on the thread, your "rules" seem to be:
1) Look for set-ups forming within Stage 1.
Would you consider looking for "reversed" patterns within a Stage 3, with the intention of shorting? The reason I ask is that you mentioned that you would like to trade more frequently if possible.
The LESS frequently I enter and exit positions the better - I'd rather the market do the work that jump in and out - still $$$ has a time value as well and not prepared to have my capital just sitting
2) Enter above the weekly 30MA
Is there any reason, why you have chosen 30 or is it simply to indicate the direction of the underlying trend?
No real reason - Bedford used it and makes sense to me re share stages
3) Average Daily of > 300,000
Are you referring to Volume here? The reason I ask is that some of the charts posted seem to have lower volume.
Share volume is irrelevant ... this meant value $$$ - I'm looking for the big money flows so always calculate VOLUME * CLOSE
4) Staged Entry --- Buy 1/3 before the breakout, 1/3 next open and 1/3 within a few days.
Based on this approach, am I right in assuming that you are trading during the day? Or are you placing buy orders in advance with your broker?
Right at EOD only - don't use a broker - straight through software, although I need to take a few bites sometimes to get the position I want
5) You mentioned in a previous post that you use Stochastics, and MACD for confirmation.
Are these indicators always considered, as I noticed that a lot of the charts posted do not include all these indicators.
No - prefer a chart with as little info on it as possible. I do use the MACD to stay in a position (time value of money again) but never to enter, or exit if the price and volume action dictates
6) Being a discretionary approach, have you been able to carry out any form of Back-Testing to confirm the "hit / win" rate with this break-out approach, or are your stats based on actual trades?
Have a look at this post. The last 10 positions I published on this forum are doing OK. 8 out of 10 now in profit and still running - losses must be cut to stay in the game and MM turns 8 of of 10 into 200%+ pa or results in blood on the floor
Finally, you mentioned that the only MS exploration you use is to find Great White's with increased volume. With this scan, wouldn't you be missing the initial break-out??
Yes ... no great shakes, I don't need to hit every stock that moves ... just the ones that will return me 100% + pa. Missing the actual day / week is OK just buy on the open the next day / week. Please remember its MM and position sizing that run up the capital not the win/loss ratios
Out of interest, have you considered scanning for price ranges? I am running a couple in my software program that looks for tight ranges (2% & 3% Price range).
Yes ... at the EOTD all I need to is actually LOOK at the charts/markets I'm interested in once or twice a month and that's all the scanning I really need. Don't discount the posters on this forum either ... SLA is a classic I remember pacer loved it ... I looked at it and also ticked the TA boxes for me ... stated it was a buy and its now up a couple of 100%. There are plenty of posters here that really do know what they are doing ...
Apologies once again for the long email and thanks in advance for any insight you can offer.......
Pleasure there is enough $$$ in the ASX to give those that do the work all the cash they will ever need
All the best,
Chorlton
PS. Keep up the great posts !!!
__________________
***********************************************
Hi Dutchy,
I hope you don't mind me emailing you but after reading your above thread, I wanted to ask you a few questions about your approach.
Firstly, I'd just like to say that I definately like your set-ups as it encompasses the elements of trading that I think are vital for making consistant profits such as the abilility to read the Price / Volume relationship and using this relationship to find low-risk entries.
From what you have kindly posted on the thread, your "rules" seem to be:
1) Look for set-ups forming within Stage 1.
Would you consider looking for "reversed" patterns within a Stage 3, with the intention of shorting? The reason I ask is that you mentioned that you would like to trade more frequently if possible.
The LESS frequently I enter and exit positions the better - I'd rather the market do the work that jump in and out - still $$$ has a time value as well and not prepared to have my capital just sitting
2) Enter above the weekly 30MA
Is there any reason, why you have chosen 30 or is it simply to indicate the direction of the underlying trend?
No real reason - Bedford used it and makes sense to me re share stages
3) Average Daily of > 300,000
Are you referring to Volume here? The reason I ask is that some of the charts posted seem to have lower volume.
Share volume is irrelevant ... this meant value $$$ - I'm looking for the big money flows so always calculate VOLUME * CLOSE
4) Staged Entry --- Buy 1/3 before the breakout, 1/3 next open and 1/3 within a few days.
Based on this approach, am I right in assuming that you are trading during the day? Or are you placing buy orders in advance with your broker?
Right at EOD only - don't use a broker - straight through software, although I need to take a few bites sometimes to get the position I want
5) You mentioned in a previous post that you use Stochastics, and MACD for confirmation.
Are these indicators always considered, as I noticed that a lot of the charts posted do not include all these indicators.
No - prefer a chart with as little info on it as possible. I do use the MACD to stay in a position (time value of money again) but never to enter, or exit if the price and volume action dictates
6) Being a discretionary approach, have you been able to carry out any form of Back-Testing to confirm the "hit / win" rate with this break-out approach, or are your stats based on actual trades?
Have a look at this post. The last 10 positions I published on this forum are doing OK. 8 out of 10 now in profit and still running - losses must be cut to stay in the game and MM turns 8 of of 10 into 200%+ pa or results in blood on the floor
Finally, you mentioned that the only MS exploration you use is to find Great White's with increased volume. With this scan, wouldn't you be missing the initial break-out??
Yes ... no great shakes, I don't need to hit every stock that moves ... just the ones that will return me 100% + pa. Missing the actual day / week is OK just buy on the open the next day / week. Please remember its MM and position sizing that run up the capital not the win/loss ratios
Out of interest, have you considered scanning for price ranges? I am running a couple in my software program that looks for tight ranges (2% & 3% Price range).
Yes ... at the EOTD all I need to is actually LOOK at the charts/markets I'm interested in once or twice a month and that's all the scanning I really need. Don't discount the posters on this forum either ... SLA is a classic I remember pacer loved it ... I looked at it and also ticked the TA boxes for me ... stated it was a buy and its now up a couple of 100%. There are plenty of posters here that really do know what they are doing ...
Apologies once again for the long email and thanks in advance for any insight you can offer.......
Pleasure there is enough $$$ in the ASX to give those that do the work all the cash they will ever need
All the best,
Chorlton
PS. Keep up the great posts !!!
__________________
