Improving Chart Analysis

[pacer]

Too right snakey.....play with 5-10% of your $$$$.....Maaaaaannnnn have I got nearly caned.....lucky I bailed when I did....but took some severe hits...ok..I admit I said to myself ...bail! on friday.ZFX/KZL.....DOH...still up a heap and must bail soon to keep capital and some profit.......wwwhhhhaaa....mummy!....lol.....

Then find the next play....don't get stuck...move on.....

 

[barney]

Barney, just to impart some wisdom that some have been disappointed about; trade small until proficient. Then the cash will outlast the enthusiasm. It will even be there for when you trade the BEAR - proficiently. I like the way you help yourself in your pursuit. It is admirable.

You are dead right Snake .... stepping outside the comfort zone re the amounts invested is/has been a big downfall for me ........ Down, but not out for the count yet ........ thanks for the encouragement ......... Barney. ............ (Now if you could organise ZFX to bounce back a bit tomorrow that would help !!)
PS Glad you got out in time Paceman.

 

[vert]

hi tech/a, ive been following your threads and have been picking up some great advice on short term trading. today i searched through all the stocks on my watchlist using tick charts and found gdn to be trading with good volume, gap on open and some news. i watched it for a while then decided it was time to trade, i had set my stop tight as i was late getting into the trade and my profit take wasnt much either but still a profit. as it turned out i was spot on and the only thing i could have improved was the timing of getting in earlier to maximize my profits and lower the risk as the price dropped of at the end of the day as i feared it would after a pretty good run up day.

i also watched wmt at the end and noticed some decent buy volumes go through on the close @ 0.048, what do you think is install for tuesday?

cheers

 

[tech/a]

Vert

Have a go yourself and see how you go.

 

[professor_frink]

Forget I said it Professor. I shall conform to the masses and speak appropriately.

It's all good snake- you gave a description in another thread, so I basically got my answer anyway
Don't conform too much though. Can't have everyone talking the same and agreeing on everything

 

[MichaelD]

frustrating when you're losing money when everyone else seems to be doing OK ......

Barney - people have a habit of boasting about their wins and conveniently forgetting about their losses. I'll guarantee you that the vast majority of traders are losing money but denying it to themselves by only focussing on and posting about their wins.

(and if it makes you feel any less frustrated, my systems have lost money in the last few trading days - it's all part of the ebb and flow of positive expectancy systems).

 

[nizar]

Barney, just to impart some wisdom that some have been disappointed about; trade small until proficient. Then the cash will outlast the enthusiasm. It will even be there for when you trade the BEAR - proficiently. I like the way you help yourself in your pursuit. It is admirable.

SNake
You seem to always say so little yet u say so much.
Thats class, its a pleasure to have u on this board

 

[It's Snake Pliskin]

Nizar, sorry I missed the comment. Thanks.

Barney what is happening with PSA?

 

[barney]

Nizar, sorry I missed the comment. Thanks.

Barney what is happening with PSA?

Howdy Snake, Been busy .. late reply .............. Re the PSA chart .......... here's some of my observations .............. Feel free to correct if neccessary

Run up from 10-20th Oct looked promising. particularly 19th where it gapped open and finished near its high

Writing was on the wall on the 20th SP gapped open tested $2.75 but closed near its low

23rd again tested around $2.74 ish and failed by finishing on low (Not looking good)

Final nail in the coffin ......... Gapped open lower on 24th Tested $2.72 but failed again; closed near low on HIGH Volume

SP drifted around over next 2-3 weeks Dropped on rising volume (bad) Recovered slightly on decreasing volume (also not good)

Just curious on how to interpret the 10th and 13th November Very long tail on 10th and decreasing range on 13th which I though may be indicating a change/slowing of downward momentum, yet the 14th was a real killer blow ...... any hints on that from yourself or anyone else would be appreciated. I am guessing that because the trend was down, that the tail had less significance ie if the trend had been up would that tail have been more of an indication of resistance to the low????? Cheers, Barney.

 

[It's Snake Pliskin]

Howdy Snake, Been busy .. late reply .............. Re the PSA chart .......... here's some of my observations .............. Feel free to correct if neccessary

Run up from 10-20th Oct looked promising. particularly 19th where it gapped open and finished near its high

Writing was on the wall on the 20th SP gapped open tested $2.75 but closed near its low

23rd again tested around $2.74 ish and failed by finishing on low (Not looking good)

Final nail in the coffin ......... Gapped open lower on 24th Tested $2.72 but failed again; closed near low on HIGH Volume

SP drifted around over next 2-3 weeks Dropped on rising volume (bad) Recovered slightly on decreasing volume (also not good)

Just curious on how to interpret the 10th and 13th November Very long tail on 10th and decreasing range on 13th which I though may be indicating a change/slowing of downward momentum, yet the 14th was a real killer blow ...... any hints on that from yourself or anyone else would be appreciated. I am guessing that because the trend was down, that the tail had less significance ie if the trend had been up would that tail have been more of an indication of resistance to the low????? Cheers, Barney.

Barney it's good to see you have eaten all of that spaghetti.

You seem to be understanding more now which is good for you. I'll PM you.

 

[MichaelD]

Just curious on how to interpret the 10th and 13th November Very long tail on 10th

My opinion of the long tail on the 10th is intraday stops being hit - if a significant number of traders had their stops set at $2.60 then they would have caused the long tail down as the sell orders all flooded the market. Once the stops were all sold off, then buyers returned and pushed the price back up.

This is a pattern which I am noticing quite often. I have no evidence to prove the cause of this, it's just a gut feeling, and I have no system to trade this pattern (yet), but it makes sense to me.

 

[Magdoran]

Howdy Snake, Been busy .. late reply .............. Re the PSA chart .......... here's some of my observations .............. Feel free to correct if neccessary

Run up from 10-20th Oct looked promising. particularly 19th where it gapped open and finished near its high

Writing was on the wall on the 20th SP gapped open tested $2.75 but closed near its low

23rd again tested around $2.74 ish and failed by finishing on low (Not looking good)

Final nail in the coffin ......... Gapped open lower on 24th Tested $2.72 but failed again; closed near low on HIGH Volume

SP drifted around over next 2-3 weeks Dropped on rising volume (bad) Recovered slightly on decreasing volume (also not good)

Just curious on how to interpret the 10th and 13th November Very long tail on 10th and decreasing range on 13th which I though may be indicating a change/slowing of downward momentum, yet the 14th was a real killer blow ...... any hints on that from yourself or anyone else would be appreciated. I am guessing that because the trend was down, that the tail had less significance ie if the trend had been up would that tail have been more of an indication of resistance to the low????? Cheers, Barney.

Good work barney,


This is exactly what I hoped you would do. Just looking at the bars and the patterns, and trying to interpret the price action. This is an excellent start. Keep doing this, and a lot of the botched trades from the past may start to make more sense.

I agree with snake's comment here too, glad the spaghetti has gone. This really makes it a lot easier to just take in the patterns that are there rather than obscure them.

Here’s another tip. Try looking in the weekly chart for this stock, and put the daily price action in context in the wider move. Try to work out what the main trend is in the weekly, and consequently what the daily trends are in relation with the weekly trend, or if they are counter trends to the weekly trend.

The mission is to work out what the pattern of trend is, then work out if it is the beginning of a trend, the middle (continuation), or the ending of a trend (termination). This should determine the way you position, and the expected duration of the trade. Sounds simple, doesn’t it?

This is an art, and doing what you’re doing is heading in the right direction from what I can see. You’re asking the right questions, which ironically is probably more important in a way than answering them (sorry this may seem cryptic, but I hope you see the wisdom in this at some point).

Keep up the good work.


Regards


Magdoran

 

[nizar]

My opinion of the long tail on the 10th is intraday stops being hit - if a significant number of traders had their stops set at $2.60 then they would have caused the long tail down as the sell orders all flooded the market. Once the stops were all sold off, then buyers returned and pushed the price back up.

This is a pattern which I am noticing quite often. I have no evidence to prove the cause of this, it's just a gut feeling, and I have no system to trade this pattern (yet), but it makes sense to me.

I agree with the above, makes perfect sense.

Does every1 (or anybody?) agree with the statement:

If a stock closes in the top the days trading range it has a 70-80% chance of gapping up on the next trading days open.

Conversely, if a stock closes in the bottom of the days trading range it has a 70-80% chance of gapping down on the next trading days open.

 

[Magdoran]

I agree with the above, makes perfect sense.

Does every1 (or anybody?) agree with the statement:

If a stock closes in the top the days trading range it has a 70-80% chance of gapping up on the next trading days open.

Conversely, if a stock closes in the bottom of the days trading range it has a 70-80% chance of gapping down on the next trading days open.

This question is actually more involved than it appears, and while I don’t have time to go into detail, a lot depends on the situation. Let me give a couple of brief examples:

You can get bars for one day that open high, and close low, sometimes way lower than the open, and yet open the next day above the previous days opening…. This is a classic exhaustion bar, and a reversal signal as an example.

In other situations you may have a bar that opens low, and closes way up. The next day the opening is smack in the middle of the bar. On the following day, the price action can move up or down, or make a doji, or test up and move down, or the reverse. There are numerous patterns that can occur.

Trying to make a sweeping assumption about the close with just 1 day is problematic in my view. Really, a lot depends on the wider context, and this is the art of good charting analysis. There are numerous books that examine trend analysis and bar chart interpretation.

Regards


Magdoran

 

[MichaelD]

Does every1 (or anybody?) agree with the statement:

If a stock closes in the top the days trading range it has a 70-80% chance of gapping up on the next trading days open.

I don't agree with this (at the moment), based on my short term trading dataset of about 80 trades. The commoner behaviour that I have seen in this dataset is for the stock to open at the previous close or a few ticks below.

One thing I have noticed is that there were many more opening gaps than I had seen previously 1-2 weeks ago when the market was very peaky - lots of exhaustion gaps and irrational exuberance on the opens. That seems to have settled down again this week, so perhaps this is why you are making this observation.

 

[barney]

Hi Lads, Thought this might be a better place for this than on the ZFX thread ......... Zinifex is looking like a good chart to learn off atm, so hoping for some of you experienced lads to give your input from a learning perspective.

Has formed a base at around $15.30. Price action seems to be very choppy ........ breaks above the $16.50-60 area with short sharp rallies, but quickly retreats .......... Been forming lower highs since early January. Don't know much about EW, but would this triangle that is forming after the sustained rally up (end of trend Jan.2nd) be indicating a drop at the end of the triangle (ie if it breaks through the $15.30 support it might keep dropping to at least $14.50 ??), or alternatively, is it possible that this might be the start of the next rally (wave one up??)

My interpretation is that the last couple of days price action have been very indecisive .............. Wed 7th gapped open after the previous days solid rise(maybe just a kneejerk reaction after the big drop? Punters looking for bargains etc.), but failed to improve, then yesterday weakened to finish near its lows ... Although it did finish the day off much stronger than it was looking around lunchtime .........

Looks precariously positioned atm ........... Next few days should be a good "learning experience" ............... Look forward to some more "experienced" analysis ............Cheers.

 

[MichaelD]

Barney,

Looks pretty much spot on to me.

Overall trend is now down - progressively lower highs.
Price having difficulty getting below 15.00 - support.

Overall pattern is of a descending triangle, so a break either way would be significant.

Good to see you've gotten rid of all the unnecessary stuff from the chart and are concentrating on price.

 

[barney]

Barney,

Looks pretty much spot on to me.

Overall trend is now down - progressively lower highs.
Price having difficulty getting below 15.00 - support.

Overall pattern is of a descending triangle, so a break either way would be significant.

Good to see you've gotten rid of all the unnecessary stuff from the chart and are concentrating on price.

Howdy Michael,

Pleased to get some confirmation of my chart analysis ........ will follow this over the next few days or so to see how it pans out ......... Todays action was almost a carbon copy of yesterday, so none the wiser, price action still looks to be searching for direction, Volume was average so overall the sellers won the day ........... general feel is down, but that can change quickly with ZFX .......... also I find you can't give too much creedence to Fiday arvo's price action at times ............ Anyone like to do some EW on the chart, or offer some added analysis? I know Mag has done some on another thread, but might be interesting to follow here from a learning perspective .......... Cheers.

 

[coyotte]

ZFX :

Just as I see it, probably wrong.

Rising Trend Line: 17/11 -- 9/2 -- 6/3 are the main points (price bounced off this line)

Declining Trend Line: 2/1 -- 24/1 -- 1/3 (2.5 months of resistance on this line).

Testing: The Move above this upper line was the result of Traders testing the market --- U can tell this by the low volume and the uncommited moves.

I would be waiting for a confirmed CLOSE above the CB Line @ 17.09 with a STOP @ the lower rising trend line.

If ZFX does breakout it's still got the 2/1 high to overcome and @ $17 is going to be harder to move % wise than say a $4 stock.

The Closing of that Gap could also lead to a rapid DOWN move.

Although ZFX still appears to be in a UP trend -- I would be taking that as a declining triangle --- A NO, NO with Guppy Traders.


Cheers

 

[tech/a]

Well I'm pretty sure this is the top of Wave "B". The highest we will see it for sometime.
Just over 61.8% retracement of the fast corrective move.

Noticed last week that my longterm portfolios came off even more than in the week of the larger drop. To me this shows a lot of un loading of positions.
Pretty well all of those held in my long term portfolio are in the ASX 200.