Discretionary Trading Method-----Outliers Discussion Thread

[nizar]

tech/a, thanks for sharing that strategy.

Now for the latest chart u have posted on MBP - im still struggling to work out why u didnt enter on the October 10th? U could have bought in the mid-50s with a stop "a few ticks" below as u have said previously? WHat do u mean ur stop would be too far away?

How is this different to, say, CVN or AUZ ?

 

[Boggo]

Giday Tech
I have just encountered this thread.
I find it very interesting because I have been using a system that I trade short term intraday on stocks from 5c to $1.50 while I watch ZFX etc climb steadily.
If I get days off during the week I look for a few likely candidates, as you say, great % profits to be made in a short time.

No days off this week but a few that I would have been looking at on Monday are BLR, DNL, LOU, PHK, RRL and SBS.

Are these along the same as you are detecting ?

Cheers All
Boggo

 

[tech/a]

tech/a, thanks for sharing that strategy.

Now for the latest chart u have posted on MBP - im still struggling to work out why u didnt enter on the October 10th? U could have bought in the mid-50s with a stop "a few ticks" below as u have said previously? WHat do u mean ur stop would be too far away?

How is this different to, say, CVN or AUZ ?

Nizar

Simply these are the results of todays scan.
If I could enter on the 10th tommorow I certainly would!!

Boggo

Had a look at all charts you have suggested.
I wouldnt trade any of them I'm afraid.

They dont fit my criteria.

 

[Boggo]

Thanks Tech
Will follow this thread with interest.

Boggo

 

[ezyTrader]

Hi tech/a,

I've got commSec ProTrader with realtime data and also provides %gain and %loss in MarketWatch. And I'm interested in your intra-day price action assessments.

I had successfully day-traded CVN (28/9) with around 15-17% profit using the 30%/70% retracement method.
PS: Wish I had held onto it for a bit longer tho...everything in hindsight.

To be honest, I'm still testing the waters and learning the trade, and some trades just don't go the way I want (retracement go all the way back to high of yesterday, or more, eg. BON re: the SHARK-OOP Bar)...hence...

I would be interested to hear any advice or suggestions about:-
a) if there's any folly following this retracement method,
b) any addition steps to improve R/R ratios,
c) nature of the Shark / oops bar formation, which caught me out on the BON trade. Question I'm asking I guess is, is there any way to detect the formation, especially if the price retracement may happen a few times during the day for some stocks...
in other words, if you find any indicators or signals effective for intra-day /EOD trading to ascertain your next actions...

Another PS: In hindsight, I probably shouldn't have traded BON, fell for the BUY ON RUMOUR, SELL ON FACT trap...

 

[tech/a]

EZY.

I dont buy retracements in this form of trading. But thats me. I want momentum to be in my direction NOW.
With a retracement it has to pull up before we can take a buy.
OLD retracements work better than newly formed price action.Look for Elliot A,B,C or 1,2,3,4,5 price action to help confirm a possible retracement trade.

Importantly when there are prices higher than those now being traded at----the psychology of traders becomes a greater issue.

If you get on a strong momentum buying frenzy there is one dominant psychology and thats greed. It then becomes the challenge of how long or how much you can get out of the trade than whether the trade is going to outperform past performance---take a look at PHM which has been struggling to make old highs---difficult to trade.

I'll posts live info as I get it.
I have meetings all day today so could be hard to do today but you never know.

You'll find I make lots of little losses.
Lots of little wins.
And the odd---lets go celebrate.

The interest I find is as we hold overnight or when we ride a 30-50% winner in a day---what to do.
OR we find a momentum trade which is slow and consistent.
Lots to discuss.

 

[lesm]

Re: Discretionary Trading ---Outliers,discussion thread.

tech/a,
If you could cover both (live) intraday and EOD that would be good.
.... but expect to have intraday in the next couple of weeks. Just need to get my finger out and finally organise it.
Cheers.

Well, all organised and fully operational.

Will be interested to see how the thread moves forward.

Cheers.

 

[ezyTrader]

NLX best from scans this morning in at .071 on the 2nd retracement test of the early morning flush out.

Just curious tech/a, was that at market open?
How do you decide the time of entry?

 

[tech/a]

Open was .068c.
Came up on scan I look for movers particularly those that dont gap.
From the chart i posted you'l not that it traded as high as .073 and retraced to .071 initially.
I placed an order at .071 which in itself is a risk with a runner,i would go at market abouve .073.
But got on and now off which may or may not be wise---just a call looking at selling pressure.I like to hold these over night as the EOD traders usually give it a gap kick in the morning where I will be selling.

If .081 is sold off then .078 is where I have placed a buy,if Im taken Im taken if not I may have egg on my face and a few $$s in my pocket.

 

[stink]

HI Tech,

I hope this isnt a red herring in the context of this discussion and my apologies if it is.

Since you started this thread i have been doing my own EOD scans within the 1$ to 3$ universe and there is plenty of potential there. However with this potential comes volatility of price action.

For the new trader to approach this area, my opinion is that if my money management principles are sound then there is no reason why not to take these opportunities.

I will be following this thread closely as the more i look into this area the more potential i see for fast higher percentage gains then with stocks that are say above 3$.

I am staying out of the speculative under 1$ area, as from the small amount of homework i have done they really jump around alot, to much for the EOD trader IMO. However over 1$ seems to be still volatile but not as gappy as the spec stocks.

Is my logic here sound?

Regards Stink

 

[nizar]

Open was .068c.
Came up on scan I look for movers particularly those that dont gap.
From the chart i posted you'l not that it traded as high as .073 and retraced to .071 initially.
I placed an order at .071 which in itself is a risk with a runner,i would go at market abouve .073.
But got on and now off which may or may not be wise---just a call looking at selling pressure.I like to hold these over night as the EOD traders usually give it a gap kick in the morning where I will be selling.

If .081 is sold off then .078 is where I have placed a buy,if Im taken Im taken if not I may have egg on my face and a few $$s in my pocket.

I reckon EOD traders will eat this up 2mrw.

A good chance of it to gap up 2mrw dont u think? What does your experience say?

tech/a - u reckon its a good idea to do a scan right before the market closes to see if there are big movers? If they close on the high then its a buy (?) but if its slightly off the high or in any case a break up on volume should see it gap up the next morning due to EOD traders buying and then u can off load it?

obviously this wouldve helped in cases like PMH. Up >100% on the initial spike to close at 41.5 and then it opens the next day at 54c.

but i guess such cases its no longer EOD trading is it LOL

but i guess thats the obvious advantage of real time.

 

[nizar]

Open was .068c.
Came up on scan I look for movers particularly those that dont gap.

It closed at 6.5c yesterday a 5% gap i guess thats not significant?

Do u mainly look for movers that dont gap up because if theyve gapped up then that means ull have missed the bulk of the move that wouldve happened the previous selling day and the AM gap up is due to EOD traders?

 

[tech/a]

logic---yes pretty sound.

I certainly wouldnt do the very short term stuff I do without live data.
The scan I mentioned this morning is a live data scan not EOD.

However I strongly advise that you are very careful to find in EOD scans EARLY momentum and not over extended momentum which could lead to an inside day.
No amount of money management will help you if your win rate is down and your reward to risk is also low. OK in some cases to have one working for you preferably both but not both against you.
Selective entry!

Dont fall into the trap of seeing every breakout as a must buy.Develope an attitute that if you miss it or it hits your stop you conduct your business---IE let it go (There are ways to get on and I can add to the topic with this as well) or take your stop FAST!

Perhaps I should present some work in these areas.

Nizar gotta do some real work but will spend time answering tonight.

 

[ezyTrader]

At time of post, JAK is having a berserk moment - up 52% with 288 trades.
tech, would you mind posting your opinion about it, when you have a moment?

 

[tech/a]

Went back in at .088

 

[dubiousinfo]

At time of post, JAK is having a berserk moment - up 52% with 288 trades.
tech, would you mind posting your opinion about it, when you have a moment?

JAK has had turnover of 20mil today, that is 25% of the total shares on issue.

 

[MichaelD]

Dont fall into the trap of seeing every breakout as a must buy.Develope an attitute that if you miss it or it hits your stop you conduct your business---IE let it go (There are ways to get on and I can add to the topic with this as well) or take your stop FAST!

Perhaps I should present some work in these areas.

Tech,

I'm interested in your expected drawdown and runs of losses numbers with this style of trading. I know you've mentioned you've had 8 losses in a row in the past with it, but in more "typical" operation?

Also - is your stop in the market or on your chart (or both)?

 

[tech/a]

Michael.

I dont have specific figures unfortunately.
I could sit down and go through all the contracts and work it out.But while its profitable I'm not going to do that.

Normally I see 1-3 losses sprinkled with wins.NORMAL R/R is 5:1 with approx 1:10-15 hitting an R/R of 20:1 or much more.
Last biggie was HDR 40:1 in a day. (More luck that good trading---hey but it was a buy).
Yesterdays NLX was 4:1
However it would be interesting to find the average drawdown and R/R.
At guess max 10% D/D average R/R 4-6:1
Win rate is much higher on live trade choices.
However if I was trading EOD I would be longer timeframe.Looking at days or weeks rather than intraday--days.

While I make good money very short term frankly its draining and I really dont want to be glued to the screen.Running this exercise has had me doing more of it ---it reminds me how much I hate it!

My return on capital since I have returned from the UK (23/8) is 46%
$48k to $70k.

 

[MichaelD]

While I make good money very short term frankly its draining and I really dont want to be glued to the screen.Running this exercise has had me doing more of it ---it reminds me how much I hate it!

A very interesting and important point (and why I'm personally trying very hard to produce a robust system trading the same way on EOD data - although I often feel the horse has already bolted ).

One other query - how long between outlier wins? The mechanics of the system are that there are lots of small losses and lots of small wins, but how often do the R-multiple winners come along?

 

[tech/a]

One other query - how long between outlier wins?

I would firstly quantify an outlier win as 10:1 R/R in a day or up
to 3 days.
How often varies.
Lately Ive had a couple.
On average 1 or 2 a month.