Simulated/Hypothetical trades

[pavilion103]

This one is an interesting one. It came up in my exploration on the 22/3/2011 when it broke through resistance.
I listened to Tech/a's when he previously identifed the fact that I am not waiting to see how a move plays out over the next few days.
I held off in my sim.
This was followed by 2 narrow spread, low volume down days.

1.Is THIS the time to enter, once it becomes clearer that there isn't much selling pressure?
2. Or should I enter on today's up day (25/3/2011)? If so where do I put the stop loss?
3. Was the right move to enter orignall on 22/3/2011 on the break of resistance?

 

[Boggo]

This is the one that I'd posted previously. ELM. See comments on the chart for reasons for the entry. Now that it has broken through the resistance level would this be a good time to add to the position?
I also note that it gapped up on high volume and finished at the high of the bar. Surely a bullish sign?

This one is an interesting one. It came up in my exploration on the 22/3/2011 when it broke through resistance.
I listened to Tech/a's when he previously identifed the fact that I am not waiting to see how a move plays out over the next few days.
I held off in my sim.
This was followed by 2 narrow spread, low volume down days.

1.Is THIS the time to enter, once it becomes clearer that there isn't much selling pressure?
2. Or should I enter on today's up day (25/3/2011)? If so where do I put the stop loss?
3. Was the right move to enter orignall on 22/3/2011 on the break of resistance?

Some very nice breakout pickups there pavilion.

ELM seems to be on a mission, I don't hold this (reluctant to add to my longs at the moment) but these are money makers as long as you are ready to bug out when they turn against you.

You have asked a few questions in most of your posts and you may have noticed that no direct replies have been forthcoming. Even though this is a "Hypothetical trades" thread there are potential legal implications associated with direct answers to your questions.

Personally I think you are onto something with some of your selections, only advice would be to get out if it doesn't do what you would like it to and forget about about trying to pick the bottom on stocks that are on the way down, your remaining method will pick them up in time and with less risk.

Yesterdays chart of ELM below, its hesitated and then continued at the last two significant levels, base of next level is $3.01, it closed on 2.77 today.

(click to expand)

 

[pavilion103]

Thanks for that. Very interesting.
I'm glad you feel that I am at least making sense with my comments. I guess it is a matter of going from a point of knowing nothing to start to begin to understand why stocks behave the way they do.

I understand people may feel uncomfortable answering my questions and I do not rely on any information, only use it along with any other information I read.

 

[pavilion103]

On that note, I've got one more.

The main issue for me is trying to work out when to enter on the actual breakout and when to wait for confirmation. I know much of it will depend on the background information, but I'm finding it difficult to discern. It seems like most times waiting for confirmation is the wisest move.

 

[tech/a]

Where is the lowest risk trade on this breakout?
See chart
That is where the best entry is/was.
Regardless of whether it fails or succeeds.
There is another for late comers---see it?

 

[TulipFX]

Where is the lowest risk trade on this breakout?
See chart
That is where the best entry is/was.
Regardless of whether it fails or succeeds.
There is another for late comers---see it?

When trading breakouts I look to trade the retrace back to test the previous resistance. Limit order about 15 points above previous resistance, SL about 15 below. If that resistance holds it often can shoot up (or down). If it falls back down - the damage is not bad at all.

Remembering too I trade currency, so spreads are smaller then stocks. But I imagine the general idea remains.

 

[Boggo]

Almost the same tech/a, I would have been a day later than you.
These type of trades are very 'visual' and don't really involve any theory (other than the volume factor perhaps) and can be very lucrative.

(click to expand)

 

[tech/a]

Yep slightly different

 

[pavilion103]

How does this one look?

The red line is my stop loss. I think it's too far away at just over 10% from entry. Does anyone agree and have opinions as to where they would place it?



Thanks,
Matt

 

[pavilion103]

Does anyone think this is a good option?
Breaking through a double bottom pattern and gapping up with a wide range bar on high volume? Or is it best to wait a day for confirmation?

 

[pavilion103]

Here is another on I entered on Friday.

How does this look. And is this stop loss (red line) reasonable? (it's 3.5%)



Thanks Matt

 

[pavilion103]

How is this one looking guys.
I think I am getting my head around it a bit more.
The one issue I am still having is determining my stop loss. Does anyone feel I my stop losses on the last few posts have been too far away from price? Are there any suggestions of where I should put them?



Thanks,
Matt

 

[pavilion103]

This is an interesting one. How do we read this? It looks bearish gapping up and then closing near the low of the bar. I'm not sure what having relatively high volume means here. What can we expect tomorrow?

 

[pavilion103]

What do we think of this one? I got in on a previous breakout.

A down day on light volume closing at the low of the bar with a widish bar. There was also a low volume down day 2 days prior. Lack of selling pressure?

 

[tech/a]

No its weak.
There have been 2 up thrusts and no carry through.
Low volume down bar that follows indicates no demand.

I dont know if you know you've done this but posts 49/50/51 were great trades.
What you managed to find were tight micro patterns in the breakout setup.
All went on to better things.

 

[pavilion103]

No its weak.
There have been 2 up thrusts and no carry through.
Low volume down bar that follows indicates no demand.View attachment 42382

I dont know if you know you've done this but posts 49/50/51 were great trades.
What you managed to find were tight micro patterns in the breakout setup.
All went on to better things.

Thanks for that Tech. Some obvious up thrusts that I missed there. I need to get the bar chart sorted out (without the open), if I'm going to continue using VSA. I'll need to sort it out in Amibroker.

With those other ones that you gave me positive feedback on only one of them has gone on with it, ALK (3.5R for me so far). With those other ones, was there any obviouis exit, when I should have gotten out? No dsoubt my 2xATR stop is not sufficient. I'm only using it because I have nothing else yet.

 

[pavilion103]

The other thing I don't understand is the volume accompanying an upthrust.

This is how I see it, please tell me if this is right:
A. Real weakness appears when there is an uptrust on high volume (which obviously means the high volume represented selling)

B. If the market rises during the day but closes near the low on LOW volume, this shows no demand.

Is the real weakness apparrant when B follows A?

(Otherwise we would just be saying whether it is high (A) or low (B) volume makes no difference to an upthrust because one means selling and the other means no demand? This is what I can't distinguish between)

 

[pavilion103]

Do you often sell at the first sign of weakness Tech? For example here is a chart for AAD. After rising to a new high there was an upthrust followed by a down day on about average volume.

If you were in the trade would you consider selling at points either one or two on the chart?

 

[tech/a]

The other thing I don't understand is the volume accompanying an upthrust.

This is how I see it, please tell me if this is right:
A. Real weakness appears when there is an uptrust on high volume (which obviously means the high volume represented selling)

Initially look for the next day to be a down day to show hidden selling volume in the upthrust the day before. High volume on an upthrust by itself cannot be initially seen as buying or selling (Unless you have Tick charts) initially.

B. If the market rises during the day but closes near the low on LOW volume, this shows no demand.

Yes

Is the real weakness apparrant when B follows A?

It could but may manifest it self in a high volume down day.

(Otherwise we would just be saying whether it is high (A) or low (B) volume makes no difference to an upthrust because one means selling and the other means no demand? This is what I can't distinguish between)

Look beyond the single bar.
Read the bar before and the bar after to establish a better pattern.
It will become easier to read.

 

[tech/a]

Do you often sell at the first sign of weakness Tech? For example here is a chart for AAD. After rising to a new high there was an upthrust followed by a down day on about average volume.

If you were in the trade would you consider selling at points either one or two on the chart?

View attachment 42451

AAD is a typical chart which demonstrate exactly what I keep ratting on about---establishing where a breakout is in the life of a chart.
Clearly the trend is established and there has been a long wave 4/5 consolidation
This was always going to be a short movement.

I would have been out at $1.50 when old resistance didn't hold as support.