30-Min High & Low Breakouts/Breakdowns

L

learninglisted

To clarify, I mean trading breakouts and breakdowns from the levels reached during the first 30 minutes of the market.

Opinions of doing this with stocks on an intraday basis.

Anyone doing this in today's market or are current trading conditions not conducive to this strategy?

It appears that doing it with volatile listeds can be very tough, especially with the specialists who skip price levels all day long.
 
It depends on the stock and what has been happening the last few days. Also depends on the action in that first thirty minutes. That said, if everything lines up its wonderful.

B
 
Quote from Brandonf:

It depends on the stock and what has been happening the last few days. Also depends on the action in that first thirty minutes. That said, if everything lines up its wonderful.

B
More...

Hello Brandon. FWIW I like reading your posts....

Can you be more specific about "if everything lines up"?

Thank you.
 
I never had much luck with a similar strategy on listed.

Of course, I'm just above "suck" on the the trading skills scale.

If I tried it again I'd wait for a retest, then strength, or a retest, then failure. Your risk to reward will be better.

You'll have one run away from you once in awhile, but so be it.
 
I have tried that. Works best combined with a (failed) break of previous day high or low.

For example look at SBC today.

Broke previous days high, but then failed, put in a nice reverse cup and handle kind of pattern and would have made for a nice profit and good r/rw

In my experience watching a stock around the previous day high and low is much more rewarding and important than opening range.


For example AOL today. Broke the low then formed a kind of consolidation pattern and broke out


Usually I cover half as soon as my risk is covered and try to keep the rest all day.

Off course these are the usual 'well chosen' examples and I traded only AOL.

But inside days are always harder to trade, even if you wait for a 30 min break
 
Just to reiterate what everyone else has said so far, if you just buy and short 30 min breakout/breakdowns you are going to get obliterated.

I tested out some strategies geared toward that with TS and even when I put additional paramaters around it like narrow range days, inside days, etc, it still didn't test out to well because the intraday price action is just too random.

If you back away from individual stocks though the method works better. That is all the breakout methods work better for futures or index's in general than equities. For example if the BKX is making lows, then BAC makes lows, it's usually a pretty good trade because you have something else that confirms it. If the spoos happen to be drifting down too, then you have three things going your way, the spoos, the index, and the stock...so the deck is more stacked in your favor that the breakdown/breakout will have some follow through and set up a good trade.

Cheers.
 
If you want to make money consistently on these items* do the following:

Evening before:

1. get a short list of stocks that will BO the next day.
2. calculate or measure the critical three volumes that are necessary to monitor. DU, FRV , (BO volume can be observed)

As market opens:

3. Wait until the market syncs between the futures and cash indexes. Before that the "end effect" noise cloud everything. See brandof he is victum of this.
4. From open do a prorata volume calc. (it is automatic on most monitoring screens once you set it up). You must be acheiving DU by 11:00 am which means 3 to 4 times DU by days end to equal by days end FRV.

5. When you reach DU in volume, Buy. You have not more than an hour before BO will occur.

6. For anticipating failures after BO, you monitor the prorata volume increase segmants just like doing fractional times at the race track post by post. If the rate of volume increase flags, you reverse on the first price formation (stall, hitch, or dip).
7. If the PO does not fail, first throw your 30 minute stuff in the toilet and set up points 1,2,3, on the 30 min chart to get the 6 to 8 day channel that is there.

Following days:

9. check the volume daily in same prorata way. When volume is peaking, get out within two hours of the open the next day See step 6 to do this.

If you have a job, you can just get the data inthe evening and enter the next day. It will lessen your profits a little bit and it will take out the failure to BO risk, but you miss doing the reversal for the short profit on the failure to BO.


You will make about 10% every 6 to 8 days doing this if you capture only half the trend runs. (have a job, for example)

If you want the method to get the short list a day in advance ask.
It is a five minute process. And it takes brains.

*Items means:open, BO's and retraces, be in for 30 minutes to make the
money.
 
This method has been my most consistent set up over the past couple of years, everytime I deviate from this method I tend to give back money. I have backtested this method by hand for hundreds of stocks over the past several years, it's great. It is simple and it works if you can handle the drawdowns. It is far better than any chat room calls, where they call out the trades, and have no idea about risk vs reward. The nice thing about this method is that you know your risk and profit targets before the trade.

Here are a few tips that help this system

1. use ATR(14) average true range indicator on a daily to see if the stock has enough room to move. For example if the daily average true range for a stock is $2.00 and it has moved $1.80 in the fist half hour you might want look for another set up or adjust your risk perimeters.

2. Pick stocks that are trending, I like to use the ADX(14), where the ADX >25, this method needs action

3. Play the gaps if you can, I did some research on excel using gaps, and I found that stocks that gap up (2-5%) tend to move 2x the average daily range, and this method needs stocks that can move

4. Stay away from very dull dry markets, my worst drawdown this year was the fews weeks before the war when everyone was sitting on the sidelines

5. the bar of the first 30 minutes should be a strong with good volume, the should be closing in the top of its range for longs and the bottom od the range for shorts

6. For every $1.00 you risk you should be taking $1.00 to $2.00, on average a stock will move 1/3rd of its daily range in the first half an hour, therefore if a stock that usually moves $2.00 a day moves $0.70 in the first half an hour you know that stock will probably move another $1.

7. Do not take anyone else's advice without proving it yourself, backtest this method (by hand if you have to) and you will not be disappointed.

Regards

palward
 
This method has been my most consistent set up over the past couple of years, everytime I deviate from this method I tend to give back money. I have backtested this method by hand for hundreds of stocks over the past several years, it's great. It is simple and it works if you can handle the drawdowns. It is far better than any chat room calls, where they call out the trades, and have no idea about risk vs reward. The nice thing about this method is that you know your risk and profit targets before the trade.

Here are a few tips that help this system

1. use ATR(14) average true range indicator on a daily to see if the stock has enough room to move. For example if the daily average true range for a stock is $2.00 and it has moved $1.80 in the fist half hour you might want look for another set up or adjust your risk perimeters.

2. Pick stocks that are trending, I like to use the ADX(14), where the ADX >25, this method needs action

3. Play the gaps if you can, I did some research on excel using gaps, and I found that stocks that gap up (2-5%) tend to move 2x the average daily range, and this method needs stocks that can move

4. Stay away from very dull dry markets, my worst drawdown this year was the fews weeks before the war when everyone was sitting on the sidelines

5. the bar of the first 30 minutes should be a strong with good volume, the should be closing in the top of its range for longs and the bottom od the range for shorts

6. For every $1.00 you risk you should be taking $1.00 to $2.00, on average a stock will move 1/3rd of its daily range in the first half an hour, therefore if a stock that usually moves $2.00 a day moves $0.70 in the first half an hour you know that stock will probably move another $1.

7. Do not take anyone else's advice without proving it yourself, backtest this method (by hand if you have to) and you will not be disappointed.

Regards

palward
 
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