John Q Public
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Where do the men who control the other stocks live?
Best of Trades, Worst of Trades, Some of the Others too
- Thread starter KymarFye
- Start date
Where do the men who control the other stocks live?
I don't follow IBM, but I have in the past found AMAT fairly tradable. Though it produces smaller range except when under major news pressure, and though the tape on such high volume stocks can be harder to read, I don't see any evidence in the charts that behaves much differently from the other major semis. T The advantage, of course, is that AMAT absorbs whatever volume a guy like me can throw at it, without even seeming to notice.
I attribute the failure on the trade that I made to being too slow in reaction. A bit later, I had a simlar trade that went well, and have had others over the weeks, though I still prefer to trade AMAT, or any of the others, under other conditions/set-ups.
Well.. by the numbers it was... It looks less "likely" in the capture than it did as it was unfolding, following through on a downtrend, threatening a significant breakdown (I thought) even while the larger market was bouncing. Though CTAS held longer term support levels today ca. 46.5, I think with significant continuing market weakness, CTAS could very well break down, or at least test support around and below its 50 DMA. As for today, I was able to stubborn may way through it, eventually taking .2 to .3 on all but the last piece, though clearly it wasn't even the best CTAS trade of the day, much less the best stock for me to be in at the time.
Just wasn't seeing things very clearly today, partly because I've been experimenting with a modified market overview. I'll try something else tomorrow. Though I'm not lloking for anywhere near as restrictive a focus as catman, I am trying to find a better balance between looking over a ton of stocks all day long and concentrating on a small handful that may or may not yield what it is I'd really like to trade.
Just wasn't seeing things very clearly today, partly because I've been experimenting with a modified market overview. I'll try something else tomorrow. Though I'm not lloking for anywhere near as restrictive a focus as catman, I am trying to find a better balance between looking over a ton of stocks all day long and concentrating on a small handful that may or may not yield what it is I'd really like to trade.
Arguably another variation on the theoretically fadable "volatile breakdown into support" kind of trade, the consolidation could certainly have been better formed, and getting short after a continuous 40-minute down-move into the LOD may be a slo-mo equivalent of a chasing a spike. Additional, independent errors in this trade may also have included 1) overanticipating a reversal on a strong day, 2) overextrapolating an individual stock and sector's relative weakness, 3) settting stops too wide and thus maximizing loss (even without considering poor probable risk:reward), 4) taking a short trade on a longer-term strong stock in a relatively strong market with too much price support coming up.
In other words, this one had begun to look pretty bad well before I hit my stop - could have scratched it much earlier, possibly as soon as I realized that entering had been a mistake, but my eyes were getting big. Assuming I was determined or destined to take the trade, I could theoretically also have set the stops much tighter, taken the loss quickly, and reversed...
Well, at least I avoided getting short at the LOD, by .02!
In other words, this one had begun to look pretty bad well before I hit my stop - could have scratched it much earlier, possibly as soon as I realized that entering had been a mistake, but my eyes were getting big. Assuming I was determined or destined to take the trade, I could theoretically also have set the stops much tighter, taken the loss quickly, and reversed...
Well, at least I avoided getting short at the LOD, by .02!
This trade ccasioned some discussion in the ET chatroom between our good friend Mr. Nitro and myself on the value of Barry Rudd's STOCK PATTERNS FOR DAY TRADING. Though I believe both SP4DT volumes would obviously benefit from some updating, I still consider them among the most useful of all day-trading books. I'm also quite willing to recognize that Rudd's set-ups can be much more difficult to trade than the books may make them seem, as, among other things, correctly identifying and "cherry-picking" the best set-ups can be challenging. For myself, I've also noticed that successfully trading one of these makes me want to repeat the experience as soon as possible, leading me to jump at versions of it that fall into the more common "volatile breakout/down" category that has caused me so much trouble.
That said, I've seldom, if ever, seen a "Rudd breakout" set-up like this one - very nicely formed on the 5-min chart, paralleled in the larger market, validated in longer time frames, and clearly supported on the L2 "tape" - that didn't pay off nicely.
That said, I've seldom, if ever, seen a "Rudd breakout" set-up like this one - very nicely formed on the 5-min chart, paralleled in the larger market, validated in longer time frames, and clearly supported on the L2 "tape" - that didn't pay off nicely.
As though to prove the point I was making in re ISSX above (and I do not discount the role of subconscious compulsion in trading), here's CHKP, a close sectoral sibling, setting up for a breakout in the more volatile mode. I exited this trade very soon after taking it, though at enough of a disadvantage including commissions to count it as a loss rather than a scratch. Though, as the chart shows, CHKP did in fact go on to break out very strongly - while trading almost completely against the larger market, and though I have no doubt that CHKP could have been profitably traded today, I suspect that I would very likely have taken an even worse and more painful loss a bit later if I hadn't gotten out when I did.
Though CHKP eventually traveled further in percentage terms than ISSX from theoretical entry points, for me, at least, ISSX was a better set-up: A relatively tight stop level was easy to set and depend on (though never tested), and the trade took place in perfect harmoney both with the longer term chart and with the state of the larger market. I could comfortable take a full or even larger position in ISSX, and manage the trade itself with little stress. For me, CHKP was a shakeout waiting to happen.
Though neither as pristine nor as profitable as the ISSX breakout, this TEVA gap fade might have reflected better trading: Though the set-up was marginal, by my standards, it qualified, and had the further advantage of projecting to a probable gap-fill alongside the larger market. On the other hand, my entry looked pretty bad at first - premature, and right below a resistance level (the 10/29 close at 71.05). I was tempted many times - was in a state of sustained temptation, you might say - to scratch the trade, but it never made a new LOD, and instead put in a series of higher lows, creating an ascending triangle against that same resistance level. Though I usually prefer to close these trades out within minutes of entering, typically by 7:00 PST (end of first half-hour), I just didn't have a good reason to get out. It ended up reaching my first target fairly soon after breaking through, and I was lucky enough still to be holding around half the position on the first reaction to the Iraq news this morning.
Patience can be a good thing. I tell myself, "The stocks are nowhere near as bored as you might be."
Patience can be a good thing. I tell myself, "The stocks are nowhere near as bored as you might be."
I find these "in-range breakdowns" trade for a relatively high percentage, especially if I don't over-press them.
IDPH was 1) violating an intermediate intraday low that also 2) coincided with the previous day's low, and, 3) the stock had crossed under its 50 DMA in the grip of an incipient downtrend. In addition, 4) the biotechs were relatively weak all day, and 5) the larger market looked to have topped and turned. So I took the trade. Not a huge one by any means, but felt like good trading.
IDPH was 1) violating an intermediate intraday low that also 2) coincided with the previous day's low, and, 3) the stock had crossed under its 50 DMA in the grip of an incipient downtrend. In addition, 4) the biotechs were relatively weak all day, and 5) the larger market looked to have topped and turned. So I took the trade. Not a huge one by any means, but felt like good trading.