Pavilion103's LIVE ASX Momentum Setup Trading Thread

[padman]

TAH paid a 30c special dividend (Ex-div 5 March) so the "raw" share price fell accordingly, but Comsec chart uses "adjusted" prices to reflect these kind of one-off changes. In IB you might be able to change the setting whether you wish to show "adjusted" price.

As to which one you should use if you are trading from a chart... I'd stick to "adjusted" (i.e. Comsec version).

Thanks skc. Can't find the right setting at the moment, but will have a fiddle around to get it correct.

 

[bonkerrs]

Been following this thread, trying to keep up with it all.

iSL = 0.38

What is "iSL"?

T2 sell order in market.

What is "T2"?

edit: Sell stops raised: EWC (0.415, 0.460). What do the prices 0.415 & 0.460 represent?

 

[peter2]

I do use a few acronyms as it saves typing.

BO is break-out
BO-NH is break-out to a new high
BO-HR is break-out of horizontal resistance

iSL is the initial stop loss and there is always one when I start a trade.
TS is the trailing sell exit trigger. This is used to reduce the trade risk initially, then when it's above break-even (BE) it protects some profit.
PT is a profit target and is usually an old high. When there isn't an old high to reference then the targets are based on multiples of the starting risk. T1 is the price level of the +1R result, T2 is the price level of the +2R result, T3 = +3R etc. . .

TR is trade risk and in this thread we are risking 1% of our account on each trade using the fixed fractional method to calculate the number of shares to buy. This 1% gets bigger as we bank profits.

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

EWC: This stock (I'm trying to be diplomatic) experiences many sharp price spikes, both up and down. I'm happy to go with it as it rises and I'm looking to sell as soon as it starts down. The first price is the TS exit which is now above our entry. The second price is a limit sell order to sell if it trades at 0.46 (which is the +2R price level). I note this price in the blog in case price does spike up, hits 0.465 and closes lower. I can then say that I've sold at 0.46 as I have placed the order in the market. I want to be as realistic as possible. You might be familiar with the term "bracket" orders and when one is executed the other is deleted.

I hope you are enjoying the thread. I could modify the trade management to slow it down, but it might get a bit boring and I want to complete as many trades as possible before the EOFY.

 

[peter2]

EOD trading update: Patience

JHC: Bought BO today after price traded above BO level yesterday. Bid before open 2.73 (iSL 2.56).

No other modifications.

We have now hit our capital risk limit (6%) and have 8 open trades. It's tempting to reduce some risk by raising the sell stops, but at the moment they are safely away from current prices. It seems wise to give them some room while the market goes sideways.

 

[ukulele]

Hi Peter, great thread. I have been trying to follow your thought process; still wrapping my head around it.

Wondering what you think of DTL? It is approaching 12month high and could be worth a trade if it goes above 90cents on volume.

I bought some before the dividend, and recently sold for 86cents as I thought it had run out of puff. Made a little bit on the trade and some extra for the dividend as well.

 

[peter2]

Thanks for dropping in. I am doing so many things that I can get a little confused. Which thought process can I try to make clearer?

DTL: I'd prefer to not comment on any specific chart because the market doesn't care what I think and neither should you. I can comment on a chart if we discuss something that helps you understand what I'm doing in this thread.

I love charts near yearly highs. However I need a low risk setup for a buy signal. The setups we look for in this thread are small sideways consolidations after price moves up. The DTL chart has two nice ones, at 0.80, then again at 0.84. I would now wait to see what happens at the yearly high (0.90). If price forms a small rectangle (box) pattern, then that would provide a low size risk setup. ( Has this helped? )

 

[Triathlete]

Thanks for dropping in. I am doing so many things that I can get a little confused. Which thought process can I try to make clearer?

DTL: I'd prefer to not comment on any specific chart because the market doesn't care what I think and neither should you. I can comment on a chart if we discuss something that helps you understand what I'm doing in this thread.

I love charts near yearly highs. However I need a low risk setup for a buy signal. The setups we look for in this thread are small sideways consolidations after price moves up. The DTL chart has two nice ones, at 0.80, then again at 0.84. I would now wait to see what happens at the yearly high (0.90). If price forms a small rectangle (box) pattern, then that would provide a low size risk setup. ( Has this helped? )

View attachment 62414

Hi Peter2,
I have been enjoying your work on this thread...I just have a question regarding your thought process in regards to your trades.

I see that you are taking trades on the break out after the continuation pattern.

What I would like to know is that when you take these trades have you worked out a price target as to where you believe the price should go to prior to taking the trades?

In other words is there 5%,10% or greater price movement required to take the trade?

 

[peter2]

No, but I look for any prior highs that might provide some resistance (supply). There must be at least +1.5R possible or I will not take the trade. The spreadsheet calculates the +1R and +2R price levels after the entry is known and I'll wait and see what we can get from the market at that time. I've been grabbing a few +2R wins as they appear because the market has been going sideways for quite a while. Once the market breaks out we'll get fully invested and let them go.

I should mention that I am restricted by the conditions of this thread. I have modified my normal management style, slightly, in order to complete a reasonable number of trades and ensure a reasonable overall profit in the 17 weeks I've allocated for this thread.

Once this is over I could start another thread or blog and trade anything, anyway I like. Then you'll see me fly. That's unlikely to happen unless I see more passion/commitment from the contributors to this thread. There's only 8.5 weeks left.

 

[Triathlete]

No, but I look for any prior highs that might provide some resistance (supply). There must be at least +1.5R possible or I will not take the trade. The spreadsheet calculates the +1R and +2R price levels after the entry is known and I'll wait and see what we can get from the market at that time. I've been grabbing a few +2R wins as they appear because the market has been going sideways for quite a while. Once the market breaks out we'll get fully invested and let them go.

I should mention that I am restricted by the conditions of this thread. I have modified my normal management style, slightly, in order to complete a reasonable number of trades and ensure a reasonable overall profit in the 17 weeks I've allocated for this thread.

Once this is over I could start another thread or blog and trade anything, anyway I like. Then you'll see me fly. That's unlikely to happen unless I see more passion/commitment from the contributors to this thread. There's only 8.5 weeks left.

Thanks Peter2,
Thanks for your reply.

I am sure that if you start your own thread with your own style and trading whatever you like there would be an interest also for that even if it is for a couple of months to show others how it is done.
Cheers.

 

[ukulele]

Thanks for the Reply Pete. I do have DTL on my watch list. You are quite clear in your reasoning, but I am still very much a trading noob.

Another one that might be of interest to people is Sundance Energy. Broke out on Friday with nice volume and the past few days may be the rectangle box (or consolidation) pattern you were talking about.

SEA is obviously in the oil game and in addition to SEA chart the West Texas Cash seems to also be in a consolidation phase after some moves up past some resistance. The Brent chart also seems to be exhibiting this behavior.

 

[VSntchr]

Another one that might be of interest to people is Sundance Energy. Broke out on Friday with nice volume and the past few days may be the rectangle box (or consolidation) pattern you were talking about.

SEA is obviously in the oil game and in addition to SEA chart the West Texas Cash seems to also be in a consolidation phase after some moves up past some resistance. The Brent chart also seems to be exhibiting this behavior.

Perhaps a buy stop at 68, with an iSL at 61.5c?
Gap to be filled at 80c could be the first logical target, which gives >1.5R.

 

[peter2]

EOD Trading update: This portfolio held up better than my own portfolios which all lost 2% today.

CVO: Price spiked down and touched our sell exit. So sad, sold. I hate those spikes.
SAR: TS raised to 0.42.

No other mods. I hope our remaining sell exits are far enough away.
If the XAO closes below 5800 tomorrow, I'll close the weakest of our trades to reduce risk and protect the profits that we've earned over the past eight weeks. This is a discretionary exit strategy based on a market filter.

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

Thanks for your ideas. Even though I'm a chartist I do try to apply some commonsense. [Note: I don't know if this adds to my edge or not, but it makes me feel better). Commodities are getting cheaper and cheaper. This is making it very tough for producers (including miners, oilers). There will be occasional rallies in all commodities and I'll be happy to trade them from support but not break-outs.

Yes I'll buy a BO in a commodity stock occasionally (we've traded LNG, IMD, SAR, EWC recently) but only when the market(XAO) is rallying.

To VSntchr: That's exactly how I'd frame the SEA trade, but only if I'm bullish oil.
Iran is about to add another 10% to the worlds daily output. (Oh no, is this a fundamental filter?)

 

[VSntchr]

EOD Trading update:

To VSntchr: That's exactly how I'd frame the SEA trade, but only if I'm bullish oil.
Iran is about to add another 10% to the worlds daily output. (Oh no, is this a fundamental filter?)

I'm certainly happy to avoid it also, I am very conservative with my breakout trading (it's non-core for me and I am still learning the ropes). I tend to stick to the stocks which I have a fundamental understanding of so I can give it a double thumbs up, i.e. tech and fund align. Oil, or any commodity stock for that matter, is certainly not within my realm. On the other hand, the BO-NH for HFA a few weeks back was a good example of something that I was happy to take based on this double criteria.

BTW, nice work on the trading. It's amazing to see how quickly this educational portfolio has taken shape. It's evident to me that there is a methodical process going on here involving an edge/expectancy rather than just a bunch of trades benefiting from a rising market. One thing that has stuck with me is something you said "we are in the business of collecting winning trades". This is key for me as it is a concept that is a bit different to a few other strategies I trade and helps to differentiate this strategy when managing the portfolio.
I for one have benefited greatly from this thread and it has given me another tool to add to the belt, and like all my other tools - its a process of constant refinement.

 

[peter2]

I got the term, "collecting winning trades" from Nick Radge. The term described exactly what I was doing in my SF portfolio. I love the feeling of being fully invested and all trades are green. This portfolio isn't managed in quite the same way but it could be.

btw: The ASX200 short idea we mentioned last week was restarted and although not managed in this thread is going along very nicely. It is offsetting some of the rapidly disappearing ASX stock profits. If the SPI doesn't turn up later tonight, then I might close a few open trades first thing tomorrow.

 

[peter2]

EOD trading update: Nothing to post, other than "phew".

I thought this portfolio might get thumped today, but it was mainly the banks.
Open trades: EWC EPW SAR ALU AGF QBE JHC Portfolio Heat = 6.7%

 

[peter2]

EOW9 Portfolio update: Pav's Portfolio +8.5% (113% invested in 7 trades) XAO -1.7% (9 weeks)

Our portfolio held its value this week as the market (XAO) dropped 1.8%. Pleasing, but not significant in the longer term. It's been nine weeks now, half way through the term of my administration.

The graph shows that we are beating the index comfortably, but looks can be deceptive. We must not become complacent and assume that it will continue as smoothly as it has. On paper we are +8.5% with total open risk of 6.9%, so actually one may say we are only +1.6% after these nine weeks. As Kenny Rogers sings," You never count your money, when you're sitting at the table. There'll be time enough for counting when the dealin's done."

This weeks sells: CVO: Price touched our sell stop.

This weeks buys: Break-outs in QBE, JHC

No mods to the exit stops. Yes, I could lower the open risk a little and save a few hundred, but with the volatility in the market I wish to avoid our exit stops being hit with another spike down (like CVO). If there is a significant reversal bar on a chart then we can exit at the next open.

Well it's that time again to show you the money: Cash $11,702.

 

[peter2]

EOD trading update: No buying or selling for three days. I feel like a longer term investor.

EWC: Modified higher sell order (price target) as price looks like going higher (0.415, 0.475)
ALU: Raised sell exit to 4.80.

The only reason for doing this is to reduce risk to be able to start another trade if we see a great setup.
Currently 6/7 open trades are in profit. That's what I like to see.

 

[VSntchr]

ALU: Raised sell exit to 4.80.

Would this level be chosen based on a 1.5ATR level from the bottom of the 5.00 consolidation level?

 

[peter2]

VSntchr: You think there might be some real science going on backstage?



I moved the stop up because it felt right for this trade and I wanted to reduce the cap risk enough to be able to start another trade.

 

[Nortorious]

A couple of prospects for consideration, AHD hitting all time highs and had some volume come in today (albeit mild) to push it above its trading range.

SEN, I thought this was still live on this thread but must have been exited whilst I've been away. Hit 0.12 today and had some decent volume on the breakout as well. Good for another 58% me thinks...