Pavilion103's LIVE ASX Momentum Setup Trading Thread

[skyQuake]

imo doing a market order for the next open is a bad way to trade. Liquidity is the main concern.
Unless you're doing big caps, ie asx50; vol at close is about 10x vol at open, and less prone to getting orders pulled

As for shorting, the CFD providers have a much larger range than IB for AU. Much smaller range than IB for US

 

[peter2]

Trading Update:

CMP: Sold at open price (0.285) for this portfolio. If this was a real trade we would have had great difficulty selling our small parcel (13,267). If we were desperate to sell then we would have had to be quick and sell lower (0.28). There is no depth in the bids and offers and price can easily go back to the recent highs if there is any demand. Not placing a sell order at one of our price targets has cost us the opportunity to exit at a much better price. This is something that is worth including in your trading plans when you notice that the market depth getting a bit thin.

PS: If this was a real trade I would not have sold this morning as there wasn't enough volume. I would have reinstated the BE exit (0.25) and wait to see what happens to the price over the next few days. I'm willing to risk the open profit to see if we can get more. I don't want to do something like this in this portfolio as I'll be tempted to always sell at the highest price .

This shows how important it is to trade stocks with more than enough volume so that we can sell at the price we want to protect our capital.

skyQuake's comment about liquidity are spot on and timely.

grah33: It would be worth your time reading how your broker handles your orders.

If you can't make money trading long then you won't make money going short. Yes, I think it a good idea to be able to do both, but master one way first.

 

[grah33]

2 new trades today :
1)NHF: stock is close to the bottom trendline so went in (there are 2 bottom trendlines), a few nice trendline touches, with little volume in the big pullback from around april onwards. hope for the best.
entry: $3.44
initial stop loss: 3.25 (at market)

2)mny : another bounce off the trendline, little volume as price hovers a little above the trendline. see what happens.
entry: 1.29
initial stop loss: 1.204

my positions are small enough since i'm learning (about 1k each) so the market could handle my position sizes even in the morning. i got in the first few hours of the morning to make my trades . if i had finished analyses last night i would have maybe done it last night and put conditional orders so that i don't get an unexpected entry price e.g. gapped up price or something.

peter: thanks for the informative and practical stuff i need to know. i picked up a few things.
i've been looking at the market depth a little . it can change quite quickly, and if a breakout occurs, it can really change, so that's interesting. i tried a profit target too on one of today's shares since the depth was thin (in case it explodes .

i've noticed some shares don't necessarily follow the market direction much and i went into 2 new uptrends . i might see if i can do the same thing but with shorting shares since market is down.
i got a total of 4 uptrends going but it's been a down turn in the market , so i don't know if that is good . i'll study risk soon but first i need more practice at the basics. at a basic level, when you go for uptrends in a downtrend market, what differences in risk or position size or number of open positions do you implement/do differently?

thanks heeps everyone

 

[peter2]

EOW16 update: Pav Momentum Portfolio +8.5% ( 53% invested in 5 trades ) XAO -5.2% (16wks)

This weeks sells: CMP. Price action forced closure for this thread but I did notice the very low volume pullback in price.
This weeks buys: ISD

The portfolio is starting to improve as the market stabilises even though the daily volatility remains huge. The portfolio has held it value quite well over the past few months. If all our open trades were forced to close the realised profits would have disappeared. A little bit of luck and a bit of good management I think. I'll be looking to start more BO trades next week.

I'm happy to keep the TSs away from the current prices. This means the portfolio looks like it carries a bit more heat (downside exposure), but selling quickly after a big down day or several down days, before the TSs are triggered will protect our capital.

Only 11 more days until the EOFY and the end for this administrator. I'm still considering another thread with no restrictions. Any market, any pattern, any time frame and every which way but loose. [Joe, I hope the sponsors are outbidding each other for the naming rights.]



ps: Joe, just kidding about the sponsors, but it's something to think about.

 

[peter2]

grah33: Your trading strategy seems to be buying at support. This requires a different outlook to trading break-outs. There's nothing wrong with that. The trading basics apply to every strategy.

There are always a few up trends even when the market is falling. In fact it's probabaly easier to find them. Whether they continue up after we buy them remains to be seen.

Trading long in a down market is always done cautiously. I reduce portfolio heat by selling the worst trades and keep a close watch on the open trades for any signs of weakness. I start fewer trades and those I start must have perfect setups (like AMA). One last thing, I'm very patient.

 

[tech/a]

If you can't make money trading long then you won't make money going short. Yes, I think it a good idea to be able to do both, but master one way first.

You sure about that.
It's a pretty broad brush.( The first sentence )

 

[VSntchr]

I know we are looking predominantly for daily patterns.
But checkout CCP on the weekly and monthly

 

[peter2]

CCP: It's on my BO-soon watch list. Not for this thread though.
CVO: Has a similar pattern also.
ELD: Still looking good.

VSntchr: Maybe you should lower your risk during this period of higher volatility.
I see that you've lost your vowels. I hope you hold on to your remaining consonants or you won't be recognisable.

 

[VSntchr]

VSntchr: Maybe you should lower your risk during this period of higher volatility.
I see that you've lost your vowels. I hope you hold on to your remaining consonants or you won't be recognisable.

I have tightened the open risk a little, Friday was a good day for that for me.
And yes, the vowels are gone - but the consonants will remain

 

[grah33]

another thread for all kinds of trades sounds good. why is the focus just on breakout trades here?


peter : u mention exiting trades b4 a stop loss occurs, if it isn't looking good. i never thought of doing that. what sort of behavior would you be looking for in the share when you exit earlier than the isl (initial stop loss)?

value snatcher: i had a quick look. nice uptrend with recent consolidation (horizontal movement). there was volume recently but it didn't break through the top limit, so if it were me i would wait for another breakout to occur , that breaks above the top , ideally with high volume. but nice find . might charge ahead soon.

NEA: was gonna go in but didn't have the money in my account. rocketed up today after a low volume pullback (with narrow spreads too) close to a trendline. bomber, i would have won big...

MVF: considering jumping in. it's close to a bottom trendline. it's trading more horizontal so i don't kow where it will go, but it might go up at least to some height. had lots of volume b4 at the trendline but couldn't break further down. i think this is a good sign as the sellers couldn't get it to fall more and they are no longer there to pull it down, so if it does go up it will encounter less resistance .my thoughts anyway.

 

[peter2]

grah33: Pavilion103 started this thread with the singular purpose of demonstrating that small trend continuation patterns could be used in a profitable system. I have continued this thread and hopefully helped show that indeed one can use these patterns to earn a profit in the longer term. This portfolio has endured unsuitable market conditions due in part to the relative strength (re XAO) of these break-outs and good risk management.

The ISL is placed at a level that would invalidate the trade setup and this makes selling easier when that happens. We've been trading BOs in this thread, so if price closes below the BO level after we buy, that would be my first indication that the BO setup has failed. However I'll let one down day go, but if there is another then this is a second indication that the BO has failed. I may decide that this is enough for me and close the trade. Sometimes one huge down bar is enough for me to exit, especially as I'm anticipating a huge up bar once price breaks-out.

Price must show that your entry is OK. I'd recommend you find and read a thought provoking account by "Phantom of the Pits" (ebook available).

 

[VSntchr]

AMA - into a trading halt pending a material capital raising.

 

[grah33]

AMA - into a trading halt pending a material capital raising.

what does that mean?

 

[peter2]

Trading update:

AMA: In a trading halt pending an announcement about a capital raising. This means AMA is raising capital by creating and then selling more shares. Generally this means short term traders like us will take a haircut (loss), but this will depend on the details of the capital raising and how popular it may be. We have to wait for the details. Unless they are very favourable I'll exit when they start trading.

FLN: TS remains at BE. We've lost open profits and can only wait until this correction completes. There is no point exiting with a small profit.
ISD: Two down bars makes me nervous about a failed BO. If price closes below 3.70 I'll exit next open.
VTG: Price is testing range low. No room to raise TS further.
SEN:

 

[grah33]

just took rhp. it looks like it's going to go somewhere soon. hugging the trend line, and low volume in that zone, so i don't think it will smash further down. details below:

RHP
isl 1.51
1.59 BUY

will get back to the other stuff people wrote (when i get a chance)...

 

[peter2]

Trading update:

VTG: Yikes. Actually today's bar is quite bullish, but one can't be sure with the low volume. We'll exit on tomorrow's opening price. I'll keep an eye on this chart in case today's price action is some insto's attempt at scaring the weak holders (yes that's us). Any subsequent BO >1.85 would interest me, especially if it happens in the next 5 days.

Nothing else to comment on. I've been taking a break from the ASX markets as the FY ends. That's why I haven't started any new trades for this portfolio.

I've been thinking about what to do next and why. It seems logical to expand on what Pavilion103 started with this thread and I've been thinking about how to do that and what to include. Currently I'm thinking about expanding our BO setups, adding another strategy and including something that will allow us profit when the market goes down. All in a new thread. If you have ideas then please PM me. Let's not pollute this thread with off topic comments.

 

[grah33]

regards AMA, how does one act for this situation? if the price of the share changes suddenly (because they create more shares), says goes lower, upon resumption it might trigger a stop loss... do we get the news first and they tell us what will be the new price and the exact time trading will reopen? just wondering how one acts in this situation on a practical level to avoid a sudden e.g. stop loss exit. i'll check for news in the morning b4 market open.

 

[debtfree]

ASX report on AMA, well part of it anyway.

 

[xr06t]

Hi Pav, Peter, debtfree, tech/a and all others who have contributed to this thread.

Just wanted to say thanks for a great thread. It has provided much insight into trade management, record keeping and risk control amongst other things and i have found it a great benefit. Wanted to get my thanks in before the thread ends at 30 June!

One query i have off the top of my head is how you scan for opportunities? I have looked into a few free web based scanning tools with limited success and note that Pav used an expensive one at the start of the thread, but am after something a little more basic perhaps?

Again, many thanks to those for the insightful discussion in this thread.

Much appreciated.

 

[tech/a]

Hi Pav, Peter, debtfree, tech/a and all others who have contributed to this thread.

Just wanted to say thanks for a great thread. It has provided much insight into trade management, record keeping and risk control amongst other things and i have found it a great benefit. Wanted to get my thanks in before the thread ends at 30 June!

One query i have off the top of my head is how you scan for opportunities? I have looked into a few free web based scanning tools with limited success and note that Pav used an expensive one at the start of the thread, but am after something a little more basic perhaps?

Again, many thanks to those for the insightful discussion in this thread.

Much appreciated.

You need something with programing capability to set up searches.
I don't use the free stuff but Ninja maybe a go.
You then need to be able to save them as watch lists.
I keep 3
(1) Signal for a trade about to happen.
(2) Trades that have failed
(3) Trades that have been missed.

I look for new setups in 2 and 3
But am constantly culling all 3
If the pattern breaks down and its clear the trade is
no longer in a set up or has changed sentiment then
out it goes.
It will come back up in the searches (I have 6) if something
interesting happens.

One of the best hints I can give with searches is to search for past setups in Metastock that is the Alert function
I have over the past 5 and 10 days.
What that shows is the set up we want 10 days ago and what its now doing.
Some great continuation micro patterns appear.

Once in the trade constantly monitor sentiment.

Pete's done a great job and I suspect deep down he's enjoyed the experience.
Its a challenging market and he's accepted that challenge.

Stocks are a great challenge but I'm not rushing to revisit them!---although I'm having a play in my thread.
Its great to keep your hand in.