My open book trading plan - Two month test

Porper · 7 July 2007

Good charts motorway, and interesting to me as I bought into BPT late Friday.

I didn't go into deep analysis like you (don't use point and figure), but when you get abnormally high volume like Fridays and a close off the lows with good buying late on you can almost smell a reversal.

The buyers certainly stepped up,Mondays open will be interesting.

A guaranteed stop is essential with these type of trades i.m.o.
__________________

motorway · 8 July 2007

Porper said:
Good charts motorway, and interesting to me as I bought into BPT late Friday.

I didn't go into deep analysis like you (don't use point and figure), but when you get abnormally high volume like Fridays and a close off the lows with good buying late on you can almost smell a reversal.

The buyers certainly stepped up,Mondays open will be interesting.

A guaranteed stop is essential with these type of trades i.m.o.
__________________

To buy on Friday You would have to be operating on an intraday basis
prepared to take the commensurate magnitude that such trading offers
And be quick and close with the stop..

From the action
The wide spread and heavy volume
Suggests a selling climax
Which if confirmed
signifies the end of the down move..

BUT does not necessarily signal the start of an up move..
There could still be more selling or
BPT could simply range

The action examined as a series of tests and responses
will in time reveal...

Certainly Friday was a day to cover shorts
and was an example of an active exit.
exiting from indications ..

So Signs of an end to the stride down
At this stage not enough to suggest
a move up..

Of course anything can happen..

Should be on the watch list..
And I can see it could be on
someones buy setup..

motorway

Porper · 8 July 2007

motorway said:
To buy on Friday You would have to be operating on an intraday basis
prepared to take the commensurate magnitude that such trading offers
And be quick and close with the stop..

Absolutely right.I don't intraday trade but just happened to be watching BPT and was seeing the momentum change.

What clinched it for me was that almost all prior swings finished on Fib retracements and the larger swing from the low on the chart to the high had bounced strongly off the 0.618% line.

Maybe my logic is filled with faults but seemed like a very good R/Reward to me at the time, as my stop is just below the 0.618 retracement line.

Maybe some intraday swing traders can comment on their set up criteria.

CanOz · 8 July 2007

Well folks, this is the only opportunity i found thats looking worth the R/R. At 2.8:1 with a tight stop it might be worth a go. A few sellers around a few days back, but generally the price action looks more favorable than unfavorable to me.

CanOz · 8 July 2007

Resolute Mining:
Anyone like to comment on this volume? Someone likes to buy at these levels.

Cheers,

nomore4s · 8 July 2007

CanOz said:
Well folks, this is the only opportunity i found thats looking worth the R/R. At 2.8:1 with a tight stop it might be worth a go. A few sellers around a few days back, but generally the price action looks more favorable than unfavorable to me.

Can, worth watching, be interesting to see if it bounces off the trend line or if it ranges for a while between 60c @ 66.5c.
Probably not a trade I would take at this stage though. Might have run too hard already, time for some consolidation?
A strong break through 67c with good vol might change that though, would need to re-look at it if & when that happens.

Porper · 9 July 2007

CanOz said:
Resolute Mining:
Anyone like to comment on this volume? Someone likes to buy at these levels.

Cheers,

I think the daily data is choppy, apart from the last couple of weeks so had a look at the weekly.

I don't know much about volume analysis but to me it looks like there is distribution going on here.Closes well off the highs with very high volume must mean there are a lot of sellers around.

I wouldn't buy, so jump in Can, it is bound to go up

R0n1n · 9 July 2007

Guys, quick question.. When do you pyramid your position ?

I had taken a small position on MRE and it starting to rise, so just wondering when is a good time to pyramid in ? Do you look at a % rise or give the stock a day or two to settle in on the run or just look at the resistance line ?

thanx.

CanOz · 9 July 2007

R0n1n said:
Guys, quick question.. When do you pyramid your position ?

I had taken a small position on MRE and it starting to rise, so just wondering when is a good time to pyramid in ? Do you look at a % rise or give the stock a day or two to settle in on the run or just look at the resistance line ?

thanx.

Good question Ron1n, and in my opinion you would treat it as a separate opportunity to buy the stock on another breakout etc...but others will have some good advice i would imagine.

Good to see it moving again.

Cheers,

CFD · 9 July 2007

The first thing I would wait for is the stop loss to make the first trade risk free, so that you do not increase the risk on the one stock. Is it accepted that you should pyramid your position ?

CanOz · 9 July 2007

CFD said:
The first thing I would wait for is the stop loss to make the first trade risk free, so that you do not increase the risk on the one stock. Is it accepted that you should pyramid your position ?

Yes, this is an excellent point, the first step is too move your stop to breakeven once its met your criteria for breakeven. My criteria is that is must get to 2x the value from the entry price to my stop.

Then once its moved on you can pyramid if the opportunity presents itself and its meets your criteria. An alternative to pyramiding is to use the extra realised profits from your trading to increase the capital you trade with, ie. 20,000 @ 2% = 400 / trade but 25,000 @ 2% = 500 risk / trade.

Cheers,

chrisdedavid · 9 July 2007

CanOz said:
Well folks, this is the only opportunity i found thats looking worth the R/R. At 2.8:1 with a tight stop it might be worth a go. A few sellers around a few days back, but generally the price action looks more favorable than unfavorable to me.

Wait for red line to cross the blue line in your PNA (that is if it ever does : )

motorway · 9 July 2007

R0n1n said:
Guys, quick question.. When do you pyramid your position ?

I had taken a small position on MRE and it starting to rise, so just wondering when is a good time to pyramid in ? Do you look at a % rise or give the stock a day or two to settle in on the run or just look at the resistance line ?

thanx.

Have a look here
at The Wyckoff Methods "rule of 3"

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

just look at the resistance line

I would look to buy of clear support
Where ever price and volume
reveals that to be

At junctures that reveal
NO supply

cheers
motorway

nomore4s · 9 July 2007

CanOz said:
Well folks, this is the only opportunity i found thats looking worth the R/R. At 2.8:1 with a tight stop it might be worth a go. A few sellers around a few days back, but generally the price action looks more favorable than unfavorable to me.

Can, did you buy this one? Had a pretty strong day today. Volume could've been higher but still not bad.

CanOz · 9 July 2007

nomore4s said:
Can, did you buy this one? Had a pretty strong day today. Volume could've been higher but still not bad.

Bugger no, i didn't. In between actual work i was experimenting with pivot points in different times frames on the ASX200 cash index on IG Markets....fascinating!

It really didn't meet my new rules, 3:1 OR NONE i say!...this helps me be more patient.

Its on the watch list though....just cooking dinner and doing the nitely routine, see what it turns up for tomorrow hey.

Going to Shanghai soon, gonna get on that train Nomore4s!

Cheers,

nomore4s · 9 July 2007

CanOz said:
Bugger no, i didn't. In between actual work i was experimenting with pivot points in different times frames on the ASX200 cash index on IG Markets....fascinating!

It really didn't meet my new rules, 3:1 OR NONE i say!...this helps me be more patient.

Its on the watch list though....just cooking dinner and doing the nitely routine, see what it turns up for tomorrow hey.

Going to Shanghai soon, gonna get on that train Nomore4s!

Cheers,

Good work with the rules on the R/R ratio, good idea imo.

Enjoy the ride can, the whole 8mins or so

nomore4s · 9 July 2007

nomore4s said:
In regards to SEK.

IMO needs to break above $7.91 to really confirm the break out of the trading channel. There also looks to be a double top @ $7.91. This is where the conviction of the buyers could be tested?

SEK was looking good in the morning session to break through that $7.90ish resistance but was sold back down in the arvo to close near its low on lowish vol again, not a good sign imo. Hopefully it can hold above $7.60 or it will signal an exit for me and I will look to re-enter later.

CanOz said:
MRE and SEK are both encountering resistance in the form of supply

I'm not sure about it being supply, with the low vol and prices not being sold down too far (yet) looks more like a lack of demand?

Thoughts?

nomore4s · 9 July 2007

motorway said:
Have a look here
at The Wyckoff Methods "rule of 3"

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

I would look to buy of clear support
Where ever price and volume
reveals that to be

At junctures that reveal
NO supply

cheers
motorway

Thanks Motorway, trying to get as much info on Wyckoff as I can atm.

I actually use a very similar method (by pure chance). The reason is I have a very small capital base and I needed a way to pyramid into positions without raising my risk but if I split my max risk and initial position into 3rds it would be too small to make it worth it.

nomore4s · 9 July 2007

Porper said:
Can,

Have a look at the CFE thread.I think it has good potential.
It is very early to pick the start of the hopefully long wave 5, (finishing the larger degree wave 3) but the early bird catches the worm !!

Could wait for more confirmation, ie. Wave B being exceeded but then the risk reward wouldn't be good enough.

Another way to trade it is to wait for wave B to be exceeded.We would then be in a minor degree wave 1.We could then trade from hopefully the low of wave 2 for a better risk/reward.

On my watchlist anyway and I may bite the bullet on Monday as per CFE thread.

Porper did you get an entry on this today?

I missed the opportunity for my final pyramid position with a type of swing trade set up that I've been looking at, but I've only just started looking at this type of set up and didn't have enough faith in it, showing my inexperience, will post up the info sometime tomorrow.

Be good to get some feed back on it from some more experienced people as well.

CanOz · 9 July 2007

Heres another for the watchlist...massive vol....what the?

Cheers,

My open book trading plan - Two month test

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Ralph Nelson Elliott

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Home runs feel good, but base hits pay bills!

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Commonsense isn't that common

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Commonsense isn't that common

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Commonsense isn't that common

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Home runs feel good, but base hits pay bills!

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