Pavilion103's LIVE ASX Momentum Setup Trading Thread

[Nortorious]

And now-----------for something completely different!









View attachment 62080

Late post to the party I know but I agree with tech/a.

I wouldn't trade it until it has moved above that previous high (absolute high), and even then, I would want to know what the background looks like in order to understand risk v reward scenario.

 

[peter2]

Replies to those that contributed.

tech/a: Yes, absolutely, I love your definition of the break-out level. Supply appeared once at the 10.90 level and now it looks like there is still supply at this level.

Two people with different definitions of the BO level. Thanks for that tech/a. Love this business. I place more emphasis on the closing price, personally.


kid hustlr: We agree. However while is does happen in other market types I would have a plan specifically for each market type. For example: I would treat this pattern as a great reversal signal if it occured intra-day and it nicked a s/r level (like a prev days high/low).

myrtie100: I'm still chuffed that a first time poster responded. Yes I agree that price could be testing the BO level. What happens next is of course pretty important if you have bought the BO.

debtfree: I wouldn't have raised the TS up so soon after buying as price can test the BO level. Yes, I agree the BO is in trouble and what happens tomorrow will determine how I would handle the BO trade. Yes, I agree we've missed the BO by not placing our pending buy orders.

triathlete: I think we agree also. thanks for contributing.

Nortorius: What background do you want? You have to know exactly what you need and find the information yourself. We have to be independant traders. In replying to your post I looked at the larger daily chart. Wham, it hit me in the face.

The CCL chart has a huge gap (mentioned by debtfree - kudos to you ). It's very likely that the supply identified by the 18/2 bar and today's bar is from people selling to get out off a trade that has been losing for almost a year. Now with that info. I would say that the BO setup was a poor one to trade knowing this background. Lesson: Look at a chart with more data points, even a short term trader.

Nortorius: If you had mentioned this background. I would have been impressed.



We all know that anything can happen when we start a trade. My point is knowing what to do next is very important.

IF: A BO trade seems to fail on the next bar after entry. THEN: Reduce risk, raise TS if possible.
IF: A BO trade is not profitable after 3 bars THEN: Reduce risk to half if possible
IF: A BO entry has two consecutive down bars after entry THEN: Be prepared to lose initial risk.
IF: A BO entry has two consecutive down bars after entry THEN: Exit next open and find another setup.

Make up your own IF/THEN statements and put them in your trading plans for the next time this happens.

 

[kid hustlr]

thx Peter.

Lets assume you bought the break as described,

where is your stop? What is your thoughts after seeing the big 2 bar reversal? Would you still be in the 'initial trade'

turning into a great thread btw.

 

[tech/a]

This is my view on the CCL pattern.

 

[VSntchr]

Good job with this thread Peter. I'm enjoying reading along with the others.
Here's one I'm watching - NVT. I'm not sure if it fits your requirements exactly, but appears to be breaking above the range of the last two months.

 

[tech/a]

Good job with this thread Peter. I'm enjoying reading along with the others.
Here's one I'm watching - NVT. I'm not sure if it fits your requirements exactly, but appears to be breaking above the range of the last two months.
View attachment 62087

To me this is a consolidation in a down move.
PAV's trading was looking for breakouts to the upside in an
up move.
Personally Id not like to see PAV's method become morphed
into something way off the mark.

 

[peter2]

kid hustlr; you asked the question, "what if I'd bought the CCL BO?".

My iSL (initial stop loss) would be 10.30 (making a 0.45 risk from the max buy price 10.75). Seeing the close on the next day is below my buy, you would hear me swear as I don't like to see that. I immediately think about defence and I'd move my sell stop up to 10.50. It doesn't save much, but most break-out failures are quick and merciless. The insto' traders really like to stick it to the retail break-out traders.

If todays (24/03/15) bar ends up, then I could move my sell stop up again to 10.60. This would reduce the initial risk by half and that's where I'd leave it.

Thanks to those that made me look at the bigger picture, I now realise that this is an interesting price squeeze area with a battle between supply/demand. I could decide to leave my iSL in place and stay out of the price action battle.

The choice between these two possible actions would be influenced by the current situation of my open portfolio.

 

[debtfree]

Thanks Peter for the thought provoking Chart & Question yesterday. Bringing up these areas of concern in our trading plans as we go along in Pav's Live Portfolio thread, is an excellent idea. It gives us something to think about and address if it's not in place. It also helps bring those of us, with not as much experience, up to speed to where we should be, once we commit to this type of trading.

Also thanks for the updates and continuing the Portfolio, much appreciated.

Cheers ... Debtfree

 

[Nortorious]

Nortorius: What background do you want? You have to know exactly what you need and find the information yourself. We have to be independant traders. In replying to your post I looked at the larger daily chart. Wham, it hit me in the face.

The CCL chart has a huge gap (mentioned by debtfree - kudos to you ). It's very likely that the supply identified by the 18/2 bar and today's bar is from people selling to get out off a trade that has been losing for almost a year. Now with that info. I would say that the BO setup was a poor one to trade knowing this background. Lesson: Look at a chart with more data points, even a short term trader.

Nortorius: If you had mentioned this background. I would have been impressed.

View attachment 62082

Fair call Peter and I take that on the chin as I didn't look at the chart background (time didn't permit). I always check out the background to see where other data points are that might slow any momentum for an up move etc.

Will post some more due diligence next time such a scenario is presented to thread readers, and hopefully time will allow me to post a more detailed response.

Keep up the good work and thought provoking questions etc.

 

[peter2]

Nortorius: Thanks, I didn't notice that CCL gap also and probably wouldn't have if you hadn't mentioned the word "background". Short term traders can't see the "forest for the trees" sometimes. A good reminder for me.

Tech/a: I'm happy to respect your wish that we stick with Pav's initial up trend continuation break-out strategy.

My apologies for the WOR reversal setup. I'll tighten the sell stop and "force" it up or out.

Now seems like the appropriate time to discuss a few topics that should be of some interest. The first topic should be how we find our trading candidates from the ~2600 stocks (a real mess) that is the ASX exchange. We should collate a basic set of market scanning parameters that finds the charts we want to look at. Then the second topic should be on creating a set of guidelines (maybe a checklist) of preferred chart attributes to narrow the first set of results into a few break-out trading candidates.

Let's start with a basic set of scanning filters to find the trending price action that is our first requirement.
Initial concept ideas:
(a) weekly trend is UP
(b) daily trend is UP
(c) market filter ? Hmm..
(d) average daily volume is high enough so we can sell without too much slippage
(e) price filter
(f) pattern scans
(g) very high volume days

Obviously this is an important part of creating a trading plan, but I don't wish to clutter this thread with copious opinions on what works for different people.

If you don't mind, I'll have a chat with tech/a and we'll sort out a basic set of market scans as a starting point for those new to trading. If you have some experience and want to contribute a "must have" scanning parameter then please PM me with your suggestion.

Ideally we want to end up with a few scans that find about 20-30 charts which we can then appraise with our checklist to identify 2 - 3 break-out setups. We'll trade those setups that trigger in this thread. As you can see, once our portfolio is up and running we don't need to find many trading opportunities each week.

 

[peter2]

Trading updates:

CAJ: Move TS up to 1.00 (BE), looks like demand is greater than supply. I'm tempted to add here (1.08) but the iSL would have to be at the BE of the first trade which doesn't reduce our initial risk amount or lock in any profit for the first trade.
NAN: Good move above the high of the high volume bar (20/3). Move TS to 1.82, this protects +3R and gives price a bit of room to move near the 2.00 level. This did trade at +5R (+$2500) today. Very tempting.

Our downside exposure (risk) is within our comfort limits so we can "let it ride". Only enough margin/cash left to start one cfd trade.

 

[VSntchr]

Trading updates:

CAJ: Move TS up to 1.00 (BE), looks like demand is greater than supply. I'm tempted to add here (1.08) but the iSL would have to be at the BE of the first trade which doesn't reduce our initial risk amount or lock in any .

Don't forget it goes ex-div tomorrow. A whopping 0.6c! FULLY FRANKED!

 

[tech/a]

One prospect for consideration.
CZZ is a ripper as well but too expensive!
Im out of time tonight but will post when I can






Also watch list.
CVT
HFR
BAL

 

[VSntchr]

Okay, here's my second attempt

 

[Nortorious]

Okay, here's my second attempt

View attachment 62101

Nice work VSntchr.

I was just about to say checkout HFA. Has broken above $1.85/1.86 today and intraday high so far of $1.91. I don't have charts so can't talk about projections etc but I got in at $1.78 due to the huge accumulation phase in the background.

Should be in for a nice move...

 

[Boggo]

Nice work VSntchr.

I was just about to say checkout HFA. Has broken above $1.85/1.86 today and intraday high so far of $1.91. I don't have charts so can't talk about projections etc but I got in at $1.78 due to the huge accumulation phase in the background.

Should be in for a nice move...

Personally I wouldn't touch it because of item (d) in post 150 above. I would pay around $1.915 to buy 20k worth and if I wanted to sell straight away the best I could do would be getting close to $1.88 and that is on an up day.
You could easily lose 10% if anyone gets nervous and stops might be worthless.

Compare that with SIP as a current breakout example.

HFA depth

 

[tech/a]

Thought HFA OK for volume Boggo.

Here is another I found

 

[Boggo]

Thought HFA OK for volume Boggo.

Here is another I found

I've have seen worse volume, the depth and volume combo though can be iffy. I like to see enough volume support there to be able to escape should a big seller appear. It did get better support late in the day even though there was a few taking profits, problem with that depth in my snapshot is that you could easily lose 5% or more just to get a sell order filled.

ALU, looks good on the weekly too.

Any thoughts on EPD ?

ALU Weekly, click to expand.

 

[Nortorious]

I've have seen worse volume, the depth and volume combo though can be iffy. I like to see enough volume support there to be able to escape should a big seller appear. It did get better support late in the day even though there was a few taking profits, problem with that depth in my snapshot is that you could easily lose 5% or more just to get a sell order filled.

ALU, looks good on the weekly too.

Any thoughts on EPD ?

ALU Weekly, click to expand.

EPD looks pretty good, I would want it to close above 0.83 though before considering. Volume today makes me think it will poke its head above 0.83 but does it have the power to start a new move above this key level is the question...

 

[PeterJ]

Peter
some others to consider
TNE is at all-time highs and in a great uptrend
VTG consolidating at the $ 4.00 level
WBA has filled the gap and there is demand ,
just broken major resistance and trying to test support,
a continuation/secondary breakout would be powerful

regards
Peter