Pavilion103's LIVE ASX Momentum Setup Trading Thread

[tech/a]

It's all portfolio management with the goal
To giving us a better Reward to Risk.
A few ticks here and there isn't going to
Skew figures massively. Sometimes it could
Keep you in a longer term successful trade
Others it could take you out with no loss.

With an abundance of prospects and a solid
Re entry strategy aggressive management should
Give high R/R provided we let good trades run.

 

[tech/a]

Thought HFA OK for volume Boggo.

Here is another I found

View attachment 62111

Nice +6% today.

2 years bank interest in 1 day!

 

[peter2]

Yep, very nice. I love those little asc triangle patterns.

ALU: Hit 5.15 today. Raising sell stop to 5.00, locking in +2.2R (+$1083).

 

[tech/a]

Yep, very nice. I love those little asc triangle patterns.

ALU: Hit 5.15 today. Raising sell stop to 5.00, locking in +2.2R (+$1083).

Why so tight?

Its got to have some wriggle.
There has been no testing of the breakout which I would expect.
Id also expect the $5 to be taken before a higher low is made.

Do as you wish but you'll never make a big profit taking small ones!
I cant see a technical reason to do this.

 

[peter2]

Sell exits should be either tight to grab most of quick profits (as with ALU) or loose to allow price to test previous levels. The exit strategy should match the trading style. As this is primarily a momentum trading thread once price passes +2R IMO it's important to protect major part of profits.

A loose stop that would allow a small consolidation or pullback (test of prior level) would be suitable for a trend following style as the tight stop may exit prematurely.

As you know, momentum traders can re-buy quickly after one or two down bars if demand is strong (and supply disappears of course).

If the test of a prior level starts quickly then I'll let it unfold as the profits aren't big enough to grab. If price moves up quickly (past +2R) then I'm inclined to grab most of it and place a re-buy order in case the exit is early.

Most definitely my choice to manage this way as we can't manage these trades by consensus. As this is an educational experience I hope people are keeping their own records and tracking different trailing stop strategies. Making all decisions live and keeping records is the only way to learn.

 

[tech/a]

Ok out at $5 and looking for a re entry opportunity then.
How will you handle this now?
Back on the watch list?
What will you be looking for?

 

[peter2]

The ALU exit was an intra-day decision, which my records tell me is generally not good as they're too emotional. Sorry my bad but I'll not retract any trading order that is actioned by the market.

I'll wait until the EOD and see what the close and daily volume looks like. Right now I'm scanning the charts for other opportunities. LNG looks interesting.

 

[peter2]

This diagram may help people write their trade management plans (if... then .... statements).

The diagram is a bit corny, I know. I didn't take the time to copy/cut real charts showing the common types of corrections. If you're serious then perhaps you should. Having a chart of every contingency next to you as you look at the EOD charts might help you to apply your trade management consistently.

I look at price patterns more than indicators. Indicators like an MA or an ATR trailing stop can look great until they don't. The market is too dynamic for a formula.


ps: If you can apply your trade management rules consistently >90% of the time. You will be better than 90% of the traders out there.

 

[tech/a]

Like these

Even Spotless that has broken out can still
be traded profitably.

I really like tight micro patterns

 

[peter2]

Trading update: Modifications to sell stops. Slowly reducing risk and locking in profit.


Must find a few more setups as we have plenty of cash now. I need to feed the beast. edit: Thanks tech/a.

Stocks on the watch list:
ALU: Re-buy >5.15
IWG: BO >0.40
AMA: BO >0.55
HSN: BO > 2.45
IMD: Buy at 0.38 Not in weekly UP trend, so might keep this one for myself.
SAR: BO > 0.45
SIQ: See stock chat.
LNG: WEB: SPO: I'm tempted to buy soon.

EHE: Interesting bar today, but price has fallen from the small range. Very similar to BAL.
PRY: SEN: Interesting 3-wave (abc) corrective patterns, but not for this thread until price gets back to highs.
WBA: Volume improving everyday after I couldn't even buy 10K shares at my price.

 

[skc]

Must find a few more setups as we have plenty of cash now. I need to feed the beast.

Plenty charts threatening to breakout.

AAC, IRI, PME, AHE, LOV, SPO, DTL, RHP, AJX, DLX

 

[peter2]

Trading update: I know it's morning, but I've got to post these entries.

LNG: Bid 3.83 (iSL = 3.55)
SPO: Bid 2.42 (iSL = 2.25)
SAR: Buy if trades at 0.455 (limit 0.46), iSL = 0.415

 

[peter2]

Trading update: Trades started in LNG, SPO and SAR.

No mods to existing sell exits. AGF may be the next to exit if it trades at 1.42.

Open trades look promising and it's just like watching the grass grow.
Although it's NOT my main focus, I'm pleased to see the W% improving.

 

[tech/a]

Pity QAN isn't in the mix

 

[padman]

May I suggest QBE?

Buy above $13.90, iSL $13

Target $15.44 (low before the gap down), giving R/R of 1.7

Daily



Weekly

 

[peter2]

Padman: Nicely thought out setup. I would reduce the trade risk to 0.50 - 0.60. Anticipating that the BO will either work straight away (with the market BO) or fail quickly. The RR would be better with a lower risk amount.

-------------------------------------

Trading update: As expected on a down day like today a few trade sells will be triggered. One down day may be the start of many down days or prices may go up tomorrow, who knows. Taking small losses and break-even results help us create the overall profits.

AGF, DMP, TNE - Trades closed as price hit the sell exits. AGF (+2R), DMP(-0.6R), TNE(BE)

LNG: Sell exit raised to 4.40 (+2R) after todays above average spike.
SPO: Sell exit raised to 2.35.

Compounding continues as the profits are banked. The portfolio has realised +5% (1% = $525, Max pos size 20% = $10503)

 

[tech/a]

Taking small losses and break-even results help us create the overall profits

.

To further increase R/R you need to get some really high R multiples.
If your taking at targets how will you do this?

I'm a little confused a I agree with cutting losses but cant see where the momentum strategy allows for
profits to run?

 

[peter2]

I understand your question and I hope your confusion is not due to any inconsistency in my management of these trades. I admit that I have made a few mistakes that might cause some confusion. Thinking about this reply is constructive (thank-you).

For this thread, my trade management includes techniques from both momentum and trend trading styles. I consider these styles as very different. Raising sell stops and reducing risk after entry is a momentum technique designed to lower AL. We agree that this is important. I won't be as aggressive as you to get to BE.

My first target is the +2R price level, along with prior S/R levels. Once price gets past this level I'll use a tight exit stop (momentum technique) and try to lock in +1.5R to +2R. This may allow a shallow consolidation to unfold but not a deeper pullback. A trend trader would allow the HL to form which would be after either a shallow consolidation or a deeper pullback giving back open profit.

Until price gets past the +2R level I'll manage the trades as a trend trader might. That will keep the turnover at a manageable level instead of grabbing lots of quick +1R results. In order for me to get a larger (>+3R) result, the price movement must not have a deep (>25%) correction.

The choice of the trade management style creates slightly different result distributions.

A purely momentum style: W%~60%, AW +1R, AL -0.7R Expectancy = 0.32
Highest # of trades, but too much work for me unless I trade them myself.

Current management style: W%~50%, AW +1.5R, AL -0.7R Expectancy = 0.40
Reasonable # of trades and the cumulative results should engage followers.

A trend trading style with raising stops quickly initally : W%~40%, AW +2.1R, AL -0.7R Expectancy = 0.42
Lowest # of trades and could get boring when the market goes sideways (like now). :frown:

 

[tech/a]

Thanks for your reply Pete.

I agree that its not a one size fits all.
Much is similar to what I do and did with PAV.

The point I'm making is that if momentum is still evident then allow
for a pullback---its going to happen.

One method is for every 4 up bars allow one back 8 --2 etc.
OR
Place a Parabolic SAR on the chart
OR
Bollinger bands and allow a pull back to the median.
OR
Divergence in Stochastic
OR
What your doing.

Profit is profit and skewing your way is sound trading.
Massive skewing removes all doubt!

 

[Newt]

Kudos to Tech and Peter for discussing pros and cons of momentum/hold in public for the attention of all. Second guessing your TP and SL goals by flicking back and forth between "swing/momentum" style vs "longer trend holds" has got to be one of the hardest things to decide for learning trend traders, particular in tough markets. Backtesting on my preferred strategies shows the last 18 months have been particularly challenging if looking to buy breakouts and then hold more than a few weeks through multiple higher lows/highs (e.g. Bollinger breakout entry).


Could I suggest VTG as a future candidate? Long term weekly trend promising (as below)
Would be nice to see daily volume above the 20 day average on one or two nice bull bars before I would buy in current environment.