Technical Trading Exercise (Pavilion103 and tech/a) Discussion

[debtfree]

Thanks Tech

 

[Shaker]

Hi TechA

My first post so hope image shows. In regard to trade initiated in SDM @ 70c and stopped out. Can you explain the Trade Analysis please. I see a Support/Resistance level at 70c and also a recent open and close above 70c failed. I have had this on my watch list for a break out confirmed above 70c.



I am currently only paper trading so would love to get your perspective on what i am seeing

Regards
Shaker

 

[tech/a]

Shaker.
My entry was the break of the micro pattern.
Which Im sure youll see on the chart I posted.
It just poked its head up then fell immediately back
into the pattern. Effectively failing the pattern on the first day.
My entry was aggressive and in hind site too aggressive.

So currently the stock has been discarded as a prospect.
And is a loss in the trading exercise.

 

[Shaker]

Shaker.
My entry was the break of the micro pattern.
Which Im sure youll see on the chart I posted.
It just poked its head up then fell immediately back
into the pattern. Effectively failing the pattern on the first day.
My entry was aggressive and in hind site too aggressive.

So currently the stock has been discarded as a prospect.
And is a loss in the trading exercise.

Thanks for the reply Tech/a.
I only noticed as i have that stock on watchlist from late last week looking for a breakout of 70c. Thanks for the detail

Regards
Shaker

 

[Country Lad]

Tech and Pav, I must admit to not following this exercise as closely as maybe I should, but I do have some difficulty understanding the triggering of 12 and 13.

For 13, your notes on the chart seem to indicate it being triggered last Friday because the close was higher than the last 4 closes. That’s fine but it had not yet shown a clean break from the flag, so do you not see that as a risk of that pattern failing? Would you normally not wait for a better signal of the break? Would the falling volume increase the risk of entering the trade?





Similarly, for chart 12, again, I would be interested in your comments about you seeing the trigger point on the micro scale compared to the close not yet breaking the pattern on the broader view as well as the falling volume as contributing risk factors for what I would see as early entry.

The other thing I notice in both of these are that the price has not quite reached the CBL on both. Close, but not quite.

So my queries really relate to apparent higher risk factors when looking at the charts more broadly than your trigger setup on a smaller scale.

I realise the P&F is irrelevant for this exercise, but I thought I would add it for interest.




Cheers
Country Lad

 

[tech/a]

Hi CL

Thanks for your inquiry.
The answer is very important in the context of
this exercise and as such Ill do up a long reply
in the Chart section due to its relevance.

 

[Country Lad]

Ill do up a long reply in the Chart section due to its relevance.

Thanks tech, look forward to it. No rush, in your own time.

CL

 

[Country Lad]

Thanks tech, but my query and your answer are a little distance apart. :nono: I was mainly interested in where there is a conflict between your micro patterns setup and, in say the case of 12 and 13, the broader patterns not yet showing a positive entry.

I have no doubt your system works well, I am really asking for comment about my observation of that perceived conflict between the micro and broader pattern and why your micro is a better early trigger.

Cheers
Country Lad

PS I see that your chart 12 has now broken out of my macro pattern as well. Logically, my broader triggers are likely to be later than yours, but I think more of a confirmation.

 

[tech/a]

CL

I dont know that we are that different?



Looks pretty similar to me.

 

[Country Lad]

CL

I don't know that we are that different?

Aha, having another good look at these and some of your other charts seems to explain the difference. Your break is any part of the bar, so the high triggers a buy and the low can probably trigger an exit. In my case, I work on the close, both buy and sell signals.

Cheers
CL

 

[statmech71]

Hi Tech,

One of the key features of this exercise seems to be the aggressive adjustment of stops. Can you please provide some explanation of the principles underlying your stop management. For example it's not clear to me why you moved the stop to $1.55 in the ERA trade when you did.

Thanks - Paul

 

[Country Lad]

CL

I don't know that we are that different?

Agree on chart 12 as I said in the previous post where you look at the top of the bar and I use close, but we are different on 13.

You are looking at a micro pattern which I assume is only a few bars where I look at the flag as the whole pattern. I would not go that early and would want a it more confirmation of the break from the full flag. That one is probably more relevant to my query and is where our methods are different.

That is the reason I asked whether you pay any attention to the broader pattern such as the flag as a whole or say, the falling volume as risk factors.

Cheers
Country Lad

 

[tech/a]

C/L

I can see your point.
I didn't see it as a flag as such.
But concede that it could be a flag.
Again I don't see it in the broader context
as being a an issue.
But you and others may wish for further
confirmation on their entries.

 

[tech/a]

Hi Tech,

One of the key features of this exercise seems to be the aggressive adjustment of stops. Can you please provide some explanation of the principles underlying your stop management. For example it's not clear to me why you moved the stop to $1.55 in the ERA trade when you did.

Thanks - Paul

Paul
Two reasons I'll move a stop
Before or to Breakeven
I sence weakness as I did with a
ERA
Or there is a clear show of strength
Momentum is on the move up
See tonight's charts for an example.

Once at B/E I relax stops and look for pivots to move up.
I will however exit at obvious weakness or a clear reversal
Or after an outlier move up.

---discretionary!

 

[statmech71]

Paul
Two reasons I'll move a stop
Before or to Breakeven
I sence weakness as I did with a
ERA
Or there is a clear show of strength
Momentum is on the move up
See tonight's charts for an example.

Once at B/E I relax stops and look for pivots to move up.
I will however exit at obvious weakness or a clear reversal
Or after an outlier move up.

---discretionary!

Thanks mate

 

[qldfrog]

tech.a, Pavilion,
thanks again for your effort,
I have learnt a lot from this thread and went thru a reread today.
I was spare making a few mistakes, [already done a lot in the last year or so since I started getting serious] but now i understand the mistakes, and react accordingly
so you guys are gems!!!

Question
Do you put your stop as soon as you buy or at close of business:
I tend to have a high ratio of buy/sell on the same day:
today for example RMD triggers a buy at 5.54, then sold later on at 5.4i; similarly MYR buy at 2.73 and onsold at 2.64 later on.
Is it just something you live with (actual cost is not that huge but still)
, or do you restrict your entries time wise (past 11AM or similar) to ensure market has stabilised???
Any past experience in this area you wish to share is welcome

For info:
I usually trade via conditional order a so my trigger buy/sell are predetermined every night

 

[tech/a]

tech.a, Pavilion,
thanks again for your effort,
I have learnt a lot from this thread and went thru a reread today.
I was spare making a few mistakes, [already done a lot in the last year or so since I started getting serious] but now i understand the mistakes, and react accordingly
so you guys are gems!!!

Question
Do you put your stop as soon as you buy or at close of business:
I tend to have a high ratio of buy/sell on the same day:
today for example RMD triggers a buy at 5.54, then sold later on at 5.4i; similarly MYR buy at 2.73 and onsold at 2.64 later on.
Is it just something you live with (actual cost is not that huge but still)
, or do you restrict your entries time wise (past 11AM or similar) to ensure market has stabilised???
Any past experience in this area you wish to share is welcome

For info:
I usually trade via conditional order a so my trigger buy/sell are predetermined every night

Initial stop is set with the order.
I have moved it UP intra day.

The buy stop is also set as a conditional order and it gets filled when it gets filled.

 

[pavilion103]

This has such a different feel to earlier in the year when our selections were taking off from the start and not looking back!

Some good lessons to be learnt here in this market. The importance of risk management is on display. Would be so easy to cop a large number of 1R losses at the moment but we are managing trades to reduce this.

Probably one of my biggest mistakes early on was thinking a 1R loss is ok and that that is why we limit the initial position to this much risk. I was wrong and it killed my expectancy.

Some good proactive trade management so far. Hopefully we get to see some good wins too in this process.

 

[tech/a]

This has such a different feel to earlier in the year when our selections were taking off from the start and not looking back!

Some good lessons to be learnt here in this market. The importance of risk management is on display. Would be so easy to cop a large number of 1R losses at the moment but we are managing trades to reduce this.

Probably one of my biggest mistakes early on was thinking a 1R loss is ok and that that is why we limit the initial position to this much risk. I was wrong and it killed my expectancy.

Some good proactive trade management so far. Hopefully we get to see some good wins too in this process.

Many of the prospects are failing to trigger and the patterns are failing.
The astute would conclude that there isn't much in the way of prolonged momentum.
But will persevere while the index remains positive.

 

[Country Lad]

This has such a different feel to earlier in the year when our selections were taking off from the start and not looking back!

As I have mentioned before, I have an index/indicator made up of various data which I use to give me an indication of the strength of the market and likely direction.

It has not been looking good since March and has not been real strong since late 2010 and that's why I have been saying it is very much a stock picking market.

You can see the difference between now and the beginning of the year.

My method of entry is slightly different now to when the indicator is positive but even so, there have some very good movers.

Cheers
Country Lad