Pavilion103's LIVE ASX Momentum Setup Trading Thread

[VSntchr]

grah33: It was a perfect pick for this thread. Just because price hasn't gone higher immediately after you/we bought it doesn't matter. Price is now testing the BO at 0.60. We must wait to see what happens next. I would only be concerned if price goes back below that little ledge (0.57).

I agree, I really liked this set-up when I had a look after seeing it here. Was too slow and missed it, but might be able to take a BO-PB trade if it churns through enough to hit me at 60.
The prolonged downstretch has been (was?) good for me in terms of trade management. I was able to clearly see what was weak in my portfolio, and also found a few good setups ready to go when we bounced.

One that I missed yesterday was RIC, it has been continually breaking out since September last year. A trade now looks good to me if it can pull back to 120. A stop at 113 and an initial target of 134 looks like a decent setup. However, not sure sure it will pull back.

 

[peter2]

Trading update: New Trade - SEN

Liked the small consolidation in SEN. Bought 26053 at 0.13 (iSL 0.11)



I also liked ELD and ISD.

 

[peter2]

The chart as I last saw it.

 

[PeterJ]

nice pick up Peter,
it has held very well over the last couple of weeks


Peter

 

[peter2]

EOW15 update: Pav Momentum Portfolio +6.4% ( 45% invested in 5 trades ) XAO -5.9% (15wks)

This weeks sells: SIQ
This weeks buys: AMA, SEN

CMP: TS raised to 0.25 (BE)

Another week has passed and there is not much for me to comment on. Our trade in CMP has picked up this week which is nice to see. The others are still hanging in there. If the market continues to rally, I'll start a few more trades and ditch VTG when we need the money for something else.

I'm considering my reasons for posting a trade book using leveraged products (cfds, fx, futures) as well as continuing this thread. To be decided.

 

[grah33]

The AMA chart shows the recent BO-HR (at 0.55), the trend is up and price has consolidated for a few days (TC pattern) just under 0.60. The price of AMA has been going up while the XAO has been falling. It's a perfect setup for our trading plan and that's why we bought. The iSL could have been closer (0.56,0.57) but I placed it under the large buy order in the MD. In the old days that order would probably stay there. These days it might be gone at any moment. Coincidentally the selected iSL matches the 3xATR(14) trailing stop on the chart.

View attachment 62955

peter: thanks for the advice, it makes sense. i initially had a similar stop loss as you specified above at about .57 ( a little under the break line). my thinking was that if the price doesn't break out at that time than i never wanted to be in the trade so i should get out. but why did you lower the stop so much? also, what's your take on volume at that breakout point? mine is that there was a surge in volume meaning that many sellers came in but were overpowered (since the price rose some), so many sellers aren't around anymore freeing up the price to move up (complicated stuff !!)




why aren't u people shorting now while the market is going down?


valuesnatcher : you mentioned coming in on RIC on a pullback to 1.20. just wondering what you are looking for specifically? my take is to see if the price can get close to 1.2 (not on high volume), or maybe even cross it but finish above it at the end of day, or maybe some narrow range bars around that area on low volume. or even a candlestick reversal pattern (dojis or whatever, gotta learn that stuff)

 

[peter2]

grah33: Too much analysis, I was caught doing that when I learned a little VSA. It's a waste of energy and doesn't help. The main reason is that we can make a case for buying and for selling in almost every situation. Naturally we agree with the case that we want to see.

I try to keep it simple. I like seeing break-outs of round numbers with good volume. We saw that with AMA (>0.60 high volume). Price can now do one of three things, fail, retest the BO level or go up. If price drops to 0.57 on above average volume then I'll consider the BO as a failure and close the trade. (The BO was a failure NOT the trade.) If price hangs around the BO level, I've got to be patient. There is no use trying to analyse what's happening on every bar. If price goes up, smile.

 

[VSntchr]

why aren't u people shorting now while the market is going down?

This is a breakout momentum thread, Peter is journalling these trades. Doesn't mean he isn't shorting elsewhere.

valuesnatcher : you mentioned coming in on RIC on a pullback to 1.20. just wondering what you are looking for specifically? my take is to see if the price can get close to 1.2 (not on high volume), or maybe even cross it but finish above it at the end of day, or maybe some narrow range bars around that area on low volume. or even a candlestick reversal pattern (dojis or whatever, gotta learn that stuff)

I am just looking for an entry point that gives me a good R:R based on the identified stop level.

 

[debtfree]

also, what's your take on volume at that breakout point? mine is that there was a surge in volume meaning that many sellers came in but were overpowered (since the price rose some), so many sellers aren't around anymore freeing up the price to move up (complicated stuff !!)

Hi grah33,

I looked on the day at the market sales and from memory I seen two big orders go through each with 2 million shares and once again from memory I think it was marked on the order XD or something like that. I just gathered it was a couple special orders from a broker going through. So above all that, there was only 400,000 shares traded on the day but anyway, it triggered our buy and now we deal with it.

Cheers ... Debtfree

 

[peter2]

Trading update:

CMP: Price spike. Would have liked to sell at 0.35 for a +2.5R result but we didn't have any sell orders in the market. You may have noticed that I occasionally place a few limit sell orders in case of spikes but didn't in the case of CMP. Now we watch what happens after today's news and low close. It looks like a few large holders took the opportunity to sell into today's good news release. No point placing a sell order at 0.35 now. If price goes back up to 0.35 quickly, it might go higher.

 

[grah33]

thx for advice everyone. it helps.


peter: you said you will close the trade if price on AMA goes below .57 but your initial stop loss is significantly lower. why didn't you put it up there or thereabouts? also, i notice you all take breakouts b4 the end of the day. isn't it better to wait for the final closing price at end of day, as price could breakout but then go down by the end of the day (false breakout). that's what i got from the books and how i do it.

debtfree: xd as in x dividend ?. the x div date is far away...confused. i assume you looked at the MD (market depth) and saw 2 big buy orders go through. still, they went through and bumped up the price and took out many would-be sellers in the process. perhaps that is "smart money " (the 2 orders).


i was spending alot of time changing my mind but i thought i would try RIC out. i went in on the candlestick doji (the current pullback) - looks similar to one of the reversal candlestick doji patterns. but my main reason was that there was heavy volume in the recent breakout and low volume in the current pullback. also, i put my stop just under the bottom trendline , so that if the BO fails i can still win as the trade might bounce off the lower trendline. turns out that the stop loss is still a small percentage loss (about 7%) so may as well keep it a little under the trendline. see what happens.

 

[debtfree]

debtfree: xd as in x dividend ?. the x div date is far away...confused. i assume you looked at the MD (market depth) and saw 2 big buy orders go through. still, they went through and bumped up the price and took out many would-be sellers in the process. perhaps that is "smart money " (the 2 orders).

grah33: Sorry to confuse you in saying "XD or something like that." No it was nothing to do with dividends. I had a look at the Course of Sales near the end of day and seen what I seen and it was more than likely XT but don't hold me to that either.

 

[peter2]

grah33: You're asking the right questions which indicates that your thinking about it. I'm pleased to help people that are prepared to help themselves.

My iSLs are placed below support or a recent higher low (HL). If price went back there then my analysis is invalidated. Once the anticipated support does not hold I have no reason to hold the trade. It's a compelling sell. If I use a wishy-washy SL then my mind goes to mush when I should be selling.

My iSs are also what I describe as disaster SLs. I don't want to see them hit but they need to be there just in case. In most trades that don't go my way I can exit the trade earlier than the iSL. There is no need to take a full loss, especially when trading break-outs. Remember, that reducing my average loss is a part of my edge.

AMA: Placing the iSL at 0.57 would be too close to the entry as the daily price movement is 1.8c. I don't want to be taken out of the trade due to random price movement. I prefer to close the trade when my trade idea is proven incorrect.

RIC: Just to be clear, you're buying the retest of the BO level. The BO opportunity has gone and this is not a second chance at the BO. Price does move around a bit (ATR(14) = 3.2c) and there are a few HLs that you may use as a iSL. The sloping TL is also OK.

BREAK-OUTS: The best time to buy them is when they BO and you'll need pending stop orders or conditional orders to buy them. I prefer to set an alarm and then look at the MD and volume just after the price breaks-out. It gives me the illusion of control but really the market just yanks my chain. I buy before the close one or more ticks above the BO level. I have this belief that the close is more important than the open and I don't like to chase price the next day if it gaps up. The best trades gap up and take off.

Trading BOs is a bit trickier (frustrating) when it's not a bull market (like now). There are many more false BOs (bull traps, fake-outs) and it's imperative that you can sell immediately and reduce those losses. One good trade should make up for 2 - 3 small losses. Edit: Very few new traders can do this and that's one reason why BO trading gets a bad rap.

You mentioned a 7% loss number. I recommend that you use fixed fractional position sizing that is used in this and tech/a's smallcap thread.

 

[debtfree]

Peter2: Once the trade has triggered and Price has moved above the Buy Level I've look at lifting my iSL towards or to the Breakeven (BE) level. I used your demo chart with the iSL, Entry, +1R and +2R levels for a few ideas of what to do with the iSL when Price hits these levels.

I was going not too bad until it hit me that if a trade had a iSL that was say 5% away, it only had to go up 5% from the buy level to hit the +1R level and a chance of moving my iSl to BE. But, if my iSL was say 15% naturally it would have to go up 15% to get to the +1R level.

I suppose a stock that has a iSL of 15% would have to be a lot more volatile and has the ability to move that 15% just as easy as the other stock that only has an iSL of 5% that has lower volatility.

Some thoughts I had was maybe, if my thoughts were that it would be harder for the 15% iSL to get to the +1R level than the 5% iSL in the same time frame would I be better to say if the 15% iSL gets to +.7R move iSL to BE and at the same time if the 5% iSL had to get to +1.5R before moving it to BE. Would that balance things better and give both trades a level playing field of getting to BE or towards it and is this the right way of thinking about it?

So many things going through my head to iron out iSL and Trailing Stops, I didn't think there would be so many combinations form start to finish. Hope this makes sense and you understand where I'm coming from.

Cheers ... Debtfree

 

[debtfree]

Peter2: I haven't forgotten your advice on entries about "A safer option is >2ATR(10) away from current price." If this fits into a low risk entry, we're away and running and maybe not getting out as far as a15% iSL.

 

[debtfree]

Peter2: Well there you go, I think I have this sorted out a little now. Amazing, putting this out for all to see my silly thinking has made me think even faster for an answer. I have gone over so many notes, books and web pages to find a better way of handling my iSL after entry when all along it was my buying setups and not the handling of my iSl to overcome differences of different %iSLs.

Most of the answer is in the post above (your original advice). If your iSL is around about the 2ATR range all things are equal. So if a 5% iSL = 2ATR and if it moves at that rate in 2 days it will be at the +1R level. Now if a 15% iSL = 2ATR and it moves at that rate in 2 days it will be at the +1R level as well.

But, if the 15% iSL is equal to say 4ATR yes we have a problem, it does not look like a low risk trade. It's going to take twice as long as our 2ATR to hit the +1ATR level (4Days) so, find a better entry trade. Just make sure you have more consistency in your trade selection.

I think I'll sleep better tonight having that sorted, that's if I do have it sorted.

Thanks all for letting me use this space to sort this.

Cheers .... Debtfree

 

[peter2]

New Trade: ISD Bought 2084 shares at 3.81 Trade Risk = 1% (iSL = 3.55)

Price did BO of consolidation earlier today.

 

[peter2]

Trading update:

CMP: Momentum trade is over and will be closed next open. Personally I still like this chart and will be looking for a pull-back entry for a medium term trend trade.

FLN: Raise exit trigger to 1.20
SEN: Raise exit trigger to 0.12
AMA: Raise exit trigger to 0.57

These exits are not in the market and I'll be looking at each day's bar in relation to these triggers for a signal to exit.

 

[debtfree]

Thanks Peter

 

[grah33]

still absorbing the info in these posts. a lot to take in...


thus far i've been doing at-market entry orders and at night time. never thought of the possibility that price could gap up and i'd get a very different entry price. so what is the point of entering in the market early morning rather than making the order night before outside market hours? one could put their order in at say midnight, rather than going in next morning. also,some go at about 3:30pm and that is because they are thinking the price is going to be roughly that b4 the market ends, and they get a head start b4 everyone else gets involved later in the evening(my take on it anyway).


don't know if i should get IB so i can short stocks. got a cmc account but i have to get another cmc CFD account if i want to do shorting. don't know if that is a good idea (use cfds or go IB which allows for shorting of shares)