Simulated/Hypothetical trades

[pavilion103]

The answer is in understanding when a move is going to stall or reverse.
I agree with Billy that there isnt one hard fast rule.
In fact my rules would have seen me out on the next day.(50% of the previous bar)
I would have been only a little worse off had I kept the trade until further analysis gave me strong clues of a reversal.

View attachment 44840

Is your rule 50% of previous bar stop used for wide spread bars?
Do you have a hard and fast rule?

 

[Billyb]

Is your rule 50% of previous bar stop used for wide spread bars?
Do you have a hard and fast rule?

Sorry to butt in here- Dont get the wrong idea about what I meant, I think individual traders do need to have some pretty rigid rules or at least rigid guidelines, if you kept changing your rules then how would you know whether what you are doing will work over a large number of trades? You are just hoping and praying.

What I meant is that the rules can differ significantly between different traders and thats because it's all the rules that work TOGETHER that make the money, not just a single rule in the methodology like the stop-loss percentage. eg, if we are talking about % based stops, then there must be profitable traders from the 0.5%-50% stop loss range, I'm sure of it.

 

[tech/a]

Is your rule 50% of previous bar stop used for wide spread bars?
Do you have a hard and fast rule?

Sorry was a bit vague.
If a stock moves 30 % or more in one session or 40%+ in 2sessions I will then look at each bar.
What I'm trying to do is maximize profits from unusually quick moves.
I have anothervrule for those that open higher an higher chasing right behind the parabolic move.

First though you have to be lucky enough to get on one.

 

[pavilion103]

From my observations it seems like these types of trades are the type that have the potential to produce large R-multiple profits.

I've tested old data and have entered a number of these types of trades where price is flat and inactive and then a few days of ultra high volume come in. Quite often I've noticed that even though price moves a lot in percentage terms on these first few high volume days. It is only the beginning of a much larger move.

This is where I seem to by picking up much of my 6R-10R wins. Thoughts?

 

[Mistagear]

From my observations it seems like these types of trades are the type that have the potential to produce large R-multiple profits.

I've tested old data and have entered a number of these types of trades where price is flat and inactive and then a few days of ultra high volume come in. Quite often I've noticed that even though price moves a lot in percentage terms on these first few high volume days. It is only the beginning of a much larger move.

This is where I seem to by picking up much of my 6R-10R wins. Thoughts?

Pav,

In your Wyckoff reading you should have come across a theory which mentions a relationship between the width of this type of base and the eventual height attained in price. Check it out, you may find an advantage to assist you.
I could give you the info but you will appreciate the discovery much more by working it out yourself

 

[pavilion103]

Pav,

In your Wyckoff reading you should have come across a theory which mentions a relationship between the width of this type of base and the eventual height attained in price. Check it out, you may find an advantage to assist you.
I could give you the info but you will appreciate the discovery much more by working it out yourself

Maybe it is something I have overlooked. I'm not sure!
I haven't read anything about a tighter range leading to more spectacular gains.

Maybe I've overlooked this in my reading.

It seems that this is the case though from my experience. If you say this theory is part of Wyckoff then no doubt I will come across it as I read more of his work.

 

[tech/a]

PAV

Just further and on a different angle to Mistagear
You an I have chatted with regard to control volume bars.
You'll note in a very large number of these potential parabolic
Rises (70%+) ----- price remains within the range of the control volume bar.

 

[joea]

I think 2012 will see a number of new books concentrating on price and volume and/or price action.
Software and addins are now available to some degree, however I believe this will accelerate in the next couple of years to take advantage of trading education promotions.

I am sure Gavin will be in the thick of it.

One wonders if the "smart money" changes it's tactics slightly.
joea

 

[pavilion103]

I haven't done one of these for a while.

This chart looks like an interesting one too me. Summary of analysis marked on the chart.

Entry 0.032, Stop 0.027 (very low liquidity)

 

[pavilion103]

Another one. AZG

My opinion would be the following:
Entry 0.15
Stop 0.13

 

[skc]

Hi Pav, have you ever compiled some statistics for your trade setups here?

Re: AZG... probably the wrong sector (engineering services) to be looking for a breakout continuation. Your stop at 13 can be easily tagged if you look at the market depth and how it trades.

 

[pavilion103]

Hi Pav, have you ever compiled some statistics for your trade setups here?

Re: AZG... probably the wrong sector (engineering services) to be looking for a breakout continuation. Your stop at 13 can be easily tagged if you look at the market depth and how it trades.

I have 3 main setups.

Since I went live I mark either a 1,2 or 3 next to each trade I enter so that I can analyse them separately. Once I've got a decent sample size I will be doing some statistical analysis.
With these types of trades there can be some big R-multiple winners. Overall they would be my best setup.

Appreciate your thoughts on this one. I'll be interested to track.

 

[skc]

Another one. AZG

My opinion would be the following:
Entry 0.15
Stop 0.13

View attachment 49756

Takeover speculation on these guys.

http://blogs.wsj.com/dealjournalaus...es-civmec-in-talks-to-buy-australias-allmine/

In this instance, the chart activities showed information that isn't available to Joe public.

Gapped open at 16.5c and now in a halt... so not sure if you'd get a fill depending on your entry criteria.

 

[pavilion103]

I wasn't filled on AZG when it gapped up. My limit was at 15c. I cancelled my order once it gapped up.
I haven't studied patterns like this one much, so I think it's best for me to be out.

CSS I still like. Same issue with this originally when I had a buy-stop at 0.027 and it gapped and I wasn't triggered. I had to wait for it to consolidate and got in at 0.032. Initial stop 0.027. So I'm 1.4R in profit at present with my trailing stop at breakeven.

It will be interesting to see if it breaks up again now that it has consolidated close to 0.040 on decreasing volume.

 

[tech/a]

Why did you cancel the order you would hav been filled.?

 

[pavilion103]

Why did you cancel the order you would hav been filled.?

I guess a lack of experience in this type of scenario had me wanting to be out of the trade if I didn't know what I was doing.

The way I saw it is that it was a great trade setup with a buy at 15c. It gapped up to 16.5 and then there was an announcement. I thought at that point I would cancel my trade. I didn't know what to expect. It then fell back down to 15c which would have taken me in.

To be honest, I look at the chart now and I cannot read it. I thought that if I cannot read it, I had better not be in it.

Is there anything you want to add?

 

[tech/a]

Is there anything you want to add?

In your case you did the right thing

I look at the chart now and I cannot read it. I thought that if I cannot read it, I had better not be in it.

So to reading the chart

Click to expand

 

[pavilion103]

Thanks Tech. Will save chart.


CSS out at 0.036

 

[pavilion103]

Thanks for the other chart Tech

 

[tech/a]

Update

Inside day on fair volume
No change to planned trade.