Setups

[beerwm]

Hi

Main question is when trading [eod trading,intraday], do you choose any stock?

- or do you use a shortlist, which filters in/out factors?

such as; certain sectors, market caps, share price, volitilty, fundamentals, volume, shareholders

I see the big one people use is 'overall market conditions/sentiment' only trading when the market is trending upwards.

would anyone jump into a stop just due to a entry signal?

thanks

 

[tech/a]

only trading when the market is trending

Something is trending in some timeframe in some direction.
Your question has more questions rather than simple answers.

Firstly timeframe.
Secondly instrument.
Thirdly direction.

If your talking ASX stocks then shorting is best done with CFDs and these days you really need to be able to trade short.That way you can take advantage of down trends in various timeframes.

would anyone jump into a stop just due to a entry signal?

Not sure what you mean?
But again timeframe is important.
A entry signal in a 2 min chart may not mean much if your trading a daily chart.

 

[CanOz]

Hi

Main question is when trading [eod trading,intraday], do you choose any stock?

- or do you use a shortlist, which filters in/out factors?

such as; certain sectors, market caps, share price, volitilty, fundamentals, volume, shareholders

I see the big one people use is 'overall market conditions/sentiment' only trading when the market is trending upwards.

would anyone jump into a stop just due to a entry signal?

thanks

There are endless ways to do this. One very common way is to identify re occuring patterns. Check this site out www.thepatternsite.com

Patterns can offer a certain probability of turning out on way as opposed to the opposite, thereby increasing the win rate of your system.

Two pattern traders are Nick Radge, and Jason Leavitt.
www.thechartisit.com
www.leavittbrothers.com

I would recommend to do course or subscribe, these guys have helped me out allot, or you could just choose to read lots of books and do more research, there is plenty available here and the web.

In theory you can probably enter randomly and still be successful. But we need to do what we think is going to work out.

Cheers,


CanOz

 

[johenmo]

Patterns can offer a certain probability of turning out on way as opposed to the opposite, thereby increasing the win rate of your system.

Because human behaviour repeats itself? Or do certain patterns have a historical/mathematical chance of acting in a certain way?

Have you found patterns more helpful for longer term trading (say weeks/months) vs shorter term? OR different patterns for different timeframes? Will read the pattern link later.

Tks

 

[CanOz]

Because human behaviour repeats itself? Or do certain patterns have a historical/mathematical chance of acting in a certain way?

Have you found patterns more helpful for longer term trading (say weeks/months) vs shorter term? OR different patterns for different timeframes? Will read the pattern link later.

Tks

1.) Who knows why they work, could be self fulfilling to a degree in some markets, but Thomas has tested patterns and provides the data on his site and in his encyclopedia of chart patterns. Interesting bedtime read.

2.) Patterns work in all time frames but some do say that some are more reliable in daily time frames, but this is hearsay to me. However, i think any patterns on 5 minute charts of FX pairs are just noise.

CanOz

 

[beerwm]

Not sure what you mean?
But again timeframe is important.
A entry signal in a 2 min chart may not mean much if your trading a daily chart.

Thanks for the replies everyone,

i'll try to clear up my initial post.

say your entry is simply a "10-day MA", when it pops up you enter;
now in this example you are given 100 stocks from your scan.

i was just wondering what approach you might use to narrow this down,
say if a stock whipsawed around or trended consistantly in the past, you might include or exclude it, or similarily you might only trade with this entry with stocks below a 50mil market cap.

given 100 stocks to narrow down from, should i just stick in some more indicators to define my choice, or look for historical patterns and fundamentals.

just interested to what approach you might use? i know this is abit of a broad question,

 

[CanOz]

given 100 stocks to narrow down from, should i just stick in some more indicators to define my choice, or look for historical patterns and fundamentals.

just interested to what approach you might use? i know this is abit of a broad question,

There are many approaches, and one is to search for patterns, another may be to only look for those that are oversold (using an indicator). Some look for interesting volume, some may look only for stocks lagging in a strong sector.

This part is really up to you to decide, forward test or even back test, and then trade. This is your system.

CanOz

 

[MRC & Co]

lol, welcome to the yellow brick road!

Try everything, evaluate everything with your own logic.

As Canaussieuck pointed out, thechartist.com.au is probably a good place to start, or end if you like (at least the power set-ups part anyways).

Many styles, from EW, to Frank D method, to scalping off DOM, to VSA, to traditional TA, to finding your own patterns, to pairs trading, to astrology and Gann.

What do you think sounds logical and you think would work? Concentrate on that and then comes the hard part, moulding it to fit your own exact style which will actually be profitable.

This game is long and constant, continuous work if you want to find and maintain an edge.

This is why thechartist.com.au power set-ups are a good start. Combines logical chart patterns, with volume and fits them to suit the market conditions (i.e. fade patterns in a choppy market and breakout patterns in a trending market). Gives exact stops, so you can learn where to place a logical stop and how to logically trail a stop. Then uses fixed fractional position sizing and holds both longs and shorts to hedge to some degree. A complete style, which you can then adapt to suit your own beliefs (pyramid more aggressively, alter stop placement, only take certain patterns etc).