Pavilion103's LIVE ASX Momentum Setup Trading Thread

[VSntchr]

CMP. The close at 25.5 looks like a BO-NH. Risk is a bit wide with a stop at 20c.

Interesting one that would almost be better in tech/'s micro thread given it's size.
Liquidity is poor but has improved somewhat with the recent run up.

Disclosure: my tip in the COMP

 

[peter2]

EOD trading update: API: Bought on the close (story below).

CMP: Hmm, yes I like it. Maybe a buy next time it trades at 0.25.


Once upon a time API was in a strong up trend and everyone wanted a piece of the action. A country squire from Adelaide, named Prince Pav identified the 1st consolidation after the big break-out and decided to buy it for his momentum thread. History records the event as a great success and the people rejoiced.

A month or two has passed and in a weak marketplace the price of API has traveled sideways indicating some underlying demand, possibly accumulation. Price has since popped up and filled the gap left in April. Seeing that the price has not dropped after the gap fill, the ruling Baron has bought on today's market close.

 

[get better]

Important point: Debtfree was able to review and evaluate my trading decisions because there was a written record. How valuable is that? Would your trading decisions be better and more consistent if you had written guidelines to follow that covered every situation?

Funny that, I've been following this thread for a while with interest and was actually thinking exactly this the other day!

In fact, I was kind of hoping you'd release a book on all of this identifying examples etc - perhaps something like a trading handbook. I would buy it in an instant .

Keep up the good work though Pete, trying to absorb as much as I can from a distance.

 

[peter2]

I just wanted to note this pattern in this thread for future reference. I love these little ascending triangles.

 

[peter2]

Another good chart example to keep. Even bad things can happen to ascending triangle patterns.

IF: The market closes below our iSL any day after buying.
THEN: Sell next open



Imagine if we had a trade management guideline (if.. then ...) statement for every situation the market can throw at us.

I'll post a few examples in this thread so that if I happen to assemble a list of them, these examples will remind me.

 

[VSntchr]

EOD trading update: API: Bought on the close (story below).
View attachment 62661

They also got an upgrade from Bell Potter yesterday.
I actually had it short in a pairs trade. But all signs pointed to close this one early...and now that our resident breakout trader has pinned it - I am glad I did
API's sector peer does not have a chart that resembles the accumulation of API, which is surprising to me given they are probably very similarly affected by the recent budget.

 

[tech/a]

They also got an upgrade from Bell Potter yesterday.
I actually had it short in a pairs trade. But all signs pointed to close this one early...and now that our resident breakout trader has pinned it - I am glad I did
API's sector peer does not have a chart that resembles the accumulation of API, which is surprising to me given they are probably very similarly affected by the recent budget.

This is a critical pattern.
Its at resistance and bunching up below it.
Volume is low which is a good sign.
The best result is volume punching through.

 

[debtfree]

Peter: Did you keep OZL on your watchlist?

 

[peter2]

tech/a: Your mention of the nearby resistance (API chart) is spot on. I didn't give it due consideration. I bought this for a medium term portfolio rather than a short term opportunity. A consequence of doing too many things sometimes.

[It's also due to not having a checklist for the setups in this educational thread. Consistency is so important.]

It was a choice between this and SUL. SUL doesn't have the nearby resistance and is the better trading opportunity.

In order to manage API in accordance with this thread I'll use a tight stop. Price either goes up or we're out at 1.70. We can always re-buy.

OZL: Yes, we bought this today at 4.88 (iSL 4.60). I really like the bear trap (fake-out) pattern that is in the OZL chart. This consolidation is the 1st since the BO > 4.20 and is a new yearly high.

CMP: Bought on open (0.25 limit 0.255) after yesterday's BO close above 0.25 (iSL 0.215).

I think we have maxed out our number of trades and we need some price movement. I'll post all the details this evening after the close.

 

[peter2]

Ok I made a trading mistake. The API setup wasn't perfect. We should be trading only perfect setups. As this is an educational thread I have to do something to fix this source of inconsistency.

I printed a small card with a checklist for the setups in Pav's Momentum thread. This is now on my desk and I'll have it when I go through the charts from the scans.



ps: If you think this is corny and it won't help. You're right it won't help you.

 

[peter2]

EOW12 Update: Pav Portfolio +6.9% ( 94% invested in 7 trades ) XAO -3.9% (12wk)

This weeks sells: SEA, SAR
This week buys:VTG, API, CPM, OZL

The portfolio held its value again this week as the index fell. We have started a few more trades to try and catch some price movement. I'm reluctant to be fully invested (max # of trades) when the index is down, but it seems the stocks we're in are holding up OK. If this changes (large down bar or two average down bars) then we'll exit them quickly and minimise the losses.

 

[tech/a]

A little API analysis.

 

[debtfree]

Thanks Tech, love your charts and analysis. A story in a chart of what is happening, very good and I'll be watching.

Cheers ... Debtfree

 

[tech/a]

API

BOOM

Testing latest high but doing it as expected.

 

[peter2]

Trading update:

API: Nice to get the timing correct (buying before the BO).
CMP: Sell exit raised to 0.23.

I won't be raising other TSs due to thin market depth in many of them and the current market volatility. We can always exit after a large down bar or two down days. Portfolio rising slowly with the index. Even though the XAO has closed >5750, I'm waiting for another day (and overnight US) before changing my daily XAO trend to up.

 

[debtfree]

Tech/a: Nice work and nice call.

Peter: Thanks for your updates and your explanation regarding the TSs.

I seen the XAO took out the previous high (15th May) and thought yes it's back to Trend UP and also 6% Capital at Risk. I hope I have that right and fair enough waiting another day to be sure.

I remember the earlier comments regarding the use of GMMA's to help in identifying the Trend or a bullish situation, it might not have triggered a bullish move as of yet, is this right? (the crossing of fast MAs through or above the slow MAs). If this has not gone above or through yet, has this been another reason you are waiting for another day?

Cheers ... Debtfree

 

[peter2]

I'd like to see some bullish confirmation in the US markets after their Memorial Day holiday. The capital risk is currently 5% so even if we change to the bullish limit we can only start one more trade. We reduced risk when the daily trend changed to down, but quite correctly, it was pointed out that other sectors less influenced by the banks remained strong. With this understanding we started additional trades when prices broke-out rather than wait for the trend to change to up. We've had no reason to regret that decision and there has been no need to tighten those TSs.

If all sectors were selling off like the banks, then I'd not hesitate to tighten every TS and reduce the open risk significantly. This might have closed every trade. We''ll never know.

I mentioned that leaving the TSs where they were (and letting the portfolio heat increase) is a trend trading management style not a momentum management style. We have this option as discretionary traders to modify our trade management style when the market conditions change.

That freedom of expression is why I'll always be a rule based discretionary trader. Of course this can make things seem more complex, but not if the guidelines are written down and the main aim is to do what is best for the portfolio.

 

[debtfree]

Thanks for the detailed reply Peter.

I've grabbed a couple of good points out of your comments to add to my notes/playbook so many thanks again, appreciate it.

 

[peter2]

One trade left and I see these two charts. Arrgh.

 

[VSntchr]

Another one for the mix

I bought this under another portfolio prior to the break, but trading the break I would say buy limit at 414 with a stopt at 404. Tight stop and might be a bit aggressive - but given the trading update released today I think it's worth a shot.