Entry Strategy

[R0n1n]

no worries

yep trend is key Ronin - as someone said the other day you don't get far trying to swim up a river

Edwood, whats the second indicator that you have used on your chart...?

 

[Edwood]

just a normal MACD setting + a 50 period MA - the general rule is to only buy when price is above both the 50 period MA & the 360MA, and to sell when pice is below both

however like any rule there are exceptions!

 

[motorway]

Wyckoff’s “Reverse Use of Trendlines”
By Hank Pruden, Ph.D., Golden Gate University
Jerry Schellenger’s excellent presentation to the TSAA in February 2001 (If You Can Draw a
Straight Line, You Can Make Money in the Market) can be extrapolated and magnified by
viewing it through the prism of Wyckoff’s Reverse Use of Trendlines.

http://www.tsaasf.org/images/stories/newsletters/tsaa newsletter spring 2001.pdf


Some basics on trend lines

motorway

 

[Sean K]

I'm probably out of my zone here because I discretionary trade, and am more an investor. Entries are a very important part of my trading and investing. I would rarely enter a long trade when a stock was in a downward trend, for example. Actually, I don't need to say anything else, it seems quite clear to me how important it is to pick a good entry. Having said that, entries can not be considered in isolation from an overall plan which seems to have been covered, with an exit probably the more important trading mechanism. I can't understand though, why entries can't be considered here, there are low and high risk entries IMO. For example, I look for a stock in a near perfect set up: General upward trend, stochastics moving up through 50, MACD moving up through zero line, stock not approaching significant resistance, RSI under 80 moving up, and the market not about to crash......Probably much better opportunity to buy long than the opposite Hope I'm not off track here.

As another example of an entry set up I look for is the current MTN chart. It is not perfect by any means, but there are a few indicators and chart picture which are indicating a good entry to me. I have indicated on the chart what is good, or not, and where I'll be entering. Obviously, as has been discussed, there's plenty of other more complex entry indicators out there, I just use these for the moment. Must say, this chart could be different by this afternoon, so it's something I would review in detail. Must also say, that while these basic indicators are useful, they are lagging, and I would normally just use them as confirmation of the price action. To me, the break through $5.50 short term makes this a good entry. The 'traders' can now smash me. LOL

PS, not saying this WILL happen, waiting for the entry. If it doesn't happen, I wait.....

 

[motorway]

http://www.tsaasf.org/images/stories/newsletters/tsaa newsletter spring 2001.pdf


Some basics on trend lines

motorway

Here is the CTX chart

You can see the normal use of trend line
and the reverse use..
( and accurate parallels )

Their interaction will reveal price patterns and
changes in volatility

Draw valid lines and see what is revealed
Don't look for patterns and then draw lines to then fit what You think you see

appearance Vs character

Keep lines sensitive
to what Is happening

They provide accurate context
for the price & Volume action to unfold

motorway

 

[R0n1n]

Here is the CTX chart

You can see the normal use of trend line
and the reverse use..
( and accurate parallels )

Their interaction will reveal price patterns and
changes in volatility

Draw valid lines and see what is revealed
Don't look for patterns and then draw lines to then fit what You think you see

appearance Vs character

Keep lines sensitive
to what Is happening

They provide accurate context
for the price & Volume action to unfold

motorway

Great work everyone.. maybe I will start posting some of my reading on various charts using trendlines, RSI and MACD. Then you guys can hammer me with ur expert opinion...

 

[nomore4s]

As another example of an entry set up I look for is the current MTN chart. It is not perfect by any means, but there are a few indicators and chart picture which are indicating a good entry to me. I have indicated on the chart what is good, or not, and where I'll be entering. Obviously, as has been discussed, there's plenty of other more complex entry indicators out there, I just use these for the moment. Must say, this chart could be different by this afternoon, so it's something I would review in detail. Must also say, that while these basic indicators are useful, they are lagging, and I would normally just use them as confirmation of the price action. To me, the break through $5.50 short term makes this a good entry. The 'traders' can now smash me. LOL

PS, not saying this WILL happen, waiting for the entry. If it doesn't happen, I wait.....

Kennas, do you wait for EOD confirmation on a set up like this especially with a stock like MTN which seems to have quite large swings

 

[Sean K]

Kennas, do you wait for EOD confirmation on a set up like this especially with a stock like MTN which seems to have quite large swings

Yep, I would with MTN, you are right. I'd especially never try to catch it early in the day. This is a yo yo!! For a longer term break up, I'd be looking for the resistance to turn support for confirmation, but you miss some gains waiting. Would also depend on the depth and volume at the time. Many a time the stock just jumps and you completely miss it. I suppose, once the buy is made it's then a matter of managing the position, which is another story of course.

 

[Edwood]

Ronin - if you'd bought on a cross of the 1day from below, and sold on a cross from above - take a look at potential points for ASX200 / SPI / XJO for the last 3 days

Ed

 

[R0n1n]

Ronin - if you'd bought on a cross of the 1day from below, and sold on a cross from above - take a look at potential points for ASX200 / SPI / XJO for the last 3 days

Ed

Edwood, expain a bit more.. remember I am fairly new to the game. Maybe a chart would help a lot ...

My previous experience with stocks has been for long term holding and that too on my full time trader friends recomendation. I remember when he told me to buy RIO at 70, I made him swear on his mother that it was undervalued lol . I am still holding it.

 

[disarray]

thanks motorway and kennas for the chart analysis. its educational to see the methods and processes of more experienced players and it gives noobs like me confirmation or new ways to look at things. much appreciated (and to other chart posters as well).

 

[tech/a]

This is MTN.
The analysis is VSA Volume spread Analysis similar to that which Motorway has spend copious hrs explaining (In a Charting package.).

If trading in a discretionary manner and looking for an entry its my belief that you need a number of confirming indicators before you take a trade.
For short term trading VSA is very powerful.

In this chart we have a number of confirming indicators.
The identification by the software of climatic selling action.The GREEN rectangle.Followed by a 2 bar pattern,Selling and climatic action (The commentary of which isnt shown here.). The Diamonds have turned Green indicating a change to bullish.(You'll also see Red and White Diamonds).

The Buy signal is a break out of the Trend Channel.(Top blue line).
My stop is $5.04 My Price target is around $6.74 Approx 4:1 R/R.
However I will use the VSA analysis to exit.
Thought as MTN is being discussed and from my view looked like a reasonable trade.

Software is TradeGuider.

 

[Dutchy3]

This is a great thread and I don't want to be left out.

Here's what I look for:

Volume accumulation on the whites (ringed in blue)
Attempts that fail with black candles on lighter volume
At least two of those
Big white on increase in volume breaking the down-trending tops
The bottoms need to be flat - or very close to flat

Oh - My first concern is that I need to know when I'm wrong. For this one it will be a close below 14 so I set my position size accordingly ....

and .... over 10 years of doing the same thing over and over ... so if its not boring then I'm at risk of running down my capital ... for excitement look elsewhere ....

 

[tech/a]

Dutchy?
You in this trade?

I see this as a great Watchlist entry as there is sound accumulation---one day it WILL blast off OR fail.Would give great R/R.

 

[Dutchy3]

Hi tech

Yep

taken a few positions ... STOP 14

also have NDO .... and had a run from WPL ... the oliers have potential yet ... look the goods to me

 

[Sean K]

Hi tech

Yep

taken a few positions ... STOP 14

Looks good Dutchy, and I like what you said.

It's an entry set up I look for, but not yet a buy to me. I'd be waiting for a clear break through .165 and then a larger position on a break through .17. 165 looks like short term resistance and it could still fail, IMO. Must say, the white candle looks good. This is just a view of the price action however, I haven't looked at any of my indicators.

I'll be watching this one closely.

(Perhaps this should be linked to the potential breakout thread? )

 

[R0n1n]

great posts guys, I have started using trendlines as well and will start posting the charts for analysis tonight... Dont have Amibroker/Quotetracker here at work .. lol...

 

[R0n1n]

ok.. here is a the chart of CSM with trend lines that I got a friend to do and mail it in. Is it right ?

aso have attached a clean line chart if anyone wants to draw the right one.. Can also post a candlestick one.

 

[Sean K]

As another example of an entry set up I look for is the current MTN chart. It is not perfect by any means, but there are a few indicators and chart picture which are indicating a good entry to me. I have indicated on the chart what is good, or not, and where I'll be entering. Obviously, as has been discussed, there's plenty of other more complex entry indicators out there, I just use these for the moment. Must say, this chart could be different by this afternoon, so it's something I would review in detail. Must also say, that while these basic indicators are useful, they are lagging, and I would normally just use them as confirmation of the price action. To me, the break through $5.50 short term makes this a good entry. The 'traders' can now smash me. LOL

PS, not saying this WILL happen, waiting for the entry. If it doesn't happen, I wait.....

Well, maybe lucky. Entry solved, now what do I do?

 

[tech/a]

Kennas

I was going to follow it here using the VSA analysis above if interested.
I can explain things as we go.