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- Thread starter N54_Fan
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Deaddog,
I read your journal. I also reviewed some of your trades. It seems you had a number of trades that were due for a reversion to the mean and you bought shares only to get stopped out. Have you looked at these at all? I used to buy high thinking prices will go higher but now I do so when there is at least some retracement of price. I do not buy at the edge of a price channel or bollinger band. Not criticizing at all,...just asking and trying to understand and maybe even help a bit.
N54_Fan
I read your journal. I also reviewed some of your trades. It seems you had a number of trades that were due for a reversion to the mean and you bought shares only to get stopped out. Have you looked at these at all? I used to buy high thinking prices will go higher but now I do so when there is at least some retracement of price. I do not buy at the edge of a price channel or bollinger band. Not criticizing at all,...just asking and trying to understand and maybe even help a bit.
N54_Fan
Itâs been a while; so I have probably filed most of those trades in the big round filing cabinet. What that journal did was to encourage me to keep my losses small
I still use a breakout strategy and I still get stopped out a lot. It doesnât take too many big winners to overcome a bunch of small losses.
It depends on the stock whether I wait for a retracement.
Right now I'm waiting for THI to retrace; might not happen.
Where do you buy when it retraces? If you buy when it gets back to the breakout point you haven't gain much except time.
Quote from deaddog:
Hey your having a discussion with me
It helped me as I followed my plan.
It will depend on how much of your strategy you reveal.
I wouldn't be too concerned about people stealing your system, you could spell it our step by step and most wouldn't have the discipline to follow it anyway.
Well it took me 3 1/2 years and about $30K in tuition to Wall Street University before I got to be profitable. Now I have enough confidence and stats to show that I am profitable. So I am using all my assets and accounts at my disposal.
I just dont think I feel comfortable telling my secrets any more than I already have. I dont mind answering questions but exact details I'm not answering. In fact I have a number of people messaging me about trading and I dont mind helping them. No one gave me my system. I figured it out and it is largely based off of Alexander Elders system but with my own modifications. So if people ask I am happy to point them in the right direction and give advice.
You didnt answer about your trades. One of the ones that stuck out to me was the 3-26-10 trade of COH. It seems you follow trends as well but often buy at the upper end of a channel line or BB. Have you looked at your trade details and stats to see what you can improve?
Sorry about that. I donât have those trades on file anymore. I donât use BBs or price channels. I watch S&R, volume and the trend.
Iâve tried optimizing the system but by the time I get it figured out, the market changes and I have to readjust.
At this moment Iâm sitting on my hands cause I donât see a trend.
Well what my system is based off is that 3 time frames must ALL show a trend for me to trade. In your case of THI,..weekly looks to be starting a NEW weekly uptrend but daily & 60 Min show you MAY be a bit late to the party. However, as you know a trend is your friend until the end. There is no way to know if you are at the end in advance. So I look at MACD divergences. I know people think it is horseshit but I tell you it works (especially on the 60 min time frame). I am looking for MACD fastline PEAK divergences as well as histogram divergences. For THI there is evidence of MACD Histo going higher on the 60 min chart but the MACD PEAK may be setting up a downward divergence. This could signify a top or just a continuation of the trend. If you want to know buy if you want to buy. I would BUY long if tomorrow there was a price higher than the close by about 10 cents (~$50.52) and have a stop ~ $49.87. However, if we are at the top of a trading range (and MACD PEAK divergence on 60 min chart plays out as I describe) then you could have a losing trade. This is kind of like my WYNN trade today. You should know whether your trade is working out within 3-4 hours so if it is not acting right bail on the trade or tighten stops to almost break even. That way you lose very little on "losing trades". This keep your win rate up and allows you to let winner ride while cutting loser quick. Look at 60 min chart of THI below. I THINK this is a good trade to take tomorrow at the open as it looks like it may even break above $51 very soon and possibly launch....BUT I would keep a TIGHT stop in case we are at the top of the short term (daily & 60 min) trend.
We certainly differ on methodology. My best guess on THI is a pull back to the 48.50 area, then a retest of the highs. If it gets thru 51 then it might take off. As Yogi said,
âPredictions are difficult especially about the futureâ.
Questions about your charts? Donât you look at volume? MACD setting arenât your usual defaults, does this make a significant difference to your entries and exits? 3 EMAs what are you using these for?
I have the usual ones on my charts SMAs that is: 20,50,and 200 but Iâm not really sure why.
Best explanation is I thought they were important at one time and never took them off. They do look nice when you have a trending market.
All indicators are based on what price did during the day or time period. So to make my life simpler I just concentrate on what the price did.
âPredictions are difficult especially about the futureâ.
Questions about your charts? Donât you look at volume? MACD setting arenât your usual defaults, does this make a significant difference to your entries and exits? 3 EMAs what are you using these for?
I have the usual ones on my charts SMAs that is: 20,50,and 200 but Iâm not really sure why.
Best explanation is I thought they were important at one time and never took them off. They do look nice when you have a trending market.
All indicators are based on what price did during the day or time period. So to make my life simpler I just concentrate on what the price did.
Just woke up from nap,...Futures EXPLODED. LOL. Guess my UYG will do well in the morning. Moving stop of PPO to break even in case it gets a bid up on this.
Our methods do differ. I just ask because I started out trading breakouts and found that ~50% of them were false breakouts when just looking at wedge patterns and S/R trendlines. I found that MACD patterns often predicted these false breakouts more quickly especially on shorter time frames allowing me to take less of a loss. On THI for example it is up against resistance and showing bullish indications on MACD with histogram on 60 min chart and the MACD above the 0 line (all indicating probable break above $51 which is longterm resistance). HOWEVER, there may be a downward PEAK divegence setting up. So if I were in this trade and if I see the 60 min MACD fastline curling down after a "breakout" above $51 on it I may close out the position immediately. A true breakout will do so strongly with MACD fastline curling higher and higher on 60 min chart. Check out the chart of GLD in the last few days and you will see what I mean. On GLD MACD took off above the 0 line on 60 min chart.
As for your other questions... I use EMA as it responds faster than SMA and puts more weight on recent price action. I also use the standard ones like you but for stop placement and lines of likely retracement I use these. As for MACD I use these settings because I dont like whipsaws if I can help it. It just smooths things out a bit. Compare it to standard setting and see it just slows things a bit. So I wait for conformation from multiple indicators before taking a trade to minimze whipsaws on a shorter time frames like the 60 min. timeframe.
I use the weekly and daily to give me the trade to take and 60 min for timing entry/exits.
As you know no system is perfect.
Good Luck.
Oh forgot to respond about volume. Yes I look at volume but find that in today's market people are very scared and you can have substantial moves on light volume. If I have heavy volume moves I get more willing to risk more money on retracements. Light volume I may commit less. But volume in and of itself means nothing!!
Volume does not impact my trading much except to keep me out of lightly traded stocks.
Think of it this way. If 1 milion people or 20 million people are trading a stock and price goes higher do you care? I can still make money either way. I just need enough traders to take the stock off my hands when I want to sell. So I only trade stocks that I can liquidate in 30 sec or less. The lower the volume in the market the fewer stocks show up on my scans. I try to limit my trades to stocks/ETFs with >500,000 shares/day but prefer 1 million shares a day.
Volume does not impact my trading much except to keep me out of lightly traded stocks.
Think of it this way. If 1 milion people or 20 million people are trading a stock and price goes higher do you care? I can still make money either way. I just need enough traders to take the stock off my hands when I want to sell. So I only trade stocks that I can liquidate in 30 sec or less. The lower the volume in the market the fewer stocks show up on my scans. I try to limit my trades to stocks/ETFs with >500,000 shares/day but prefer 1 million shares a day.