Choppy markets today - getting whipsawed to death ... :-(

Harry,

I only traded 2 stocks today - basically I use a very simple setup of selecting stocks that are bouncing off the bottom of a bollinger band and selling when it hits the top. I have only been trading full time for about two weeks so I am still learning. Look at BRCD and SEBL today at some really clean setups. Here are my trades today:

Bought 2400 BRCD 13.76
Sold 2159 at 13.90
Sold 41 at 13.91
Sold 200 at 13.85

Bought 2600 SEBL at 13.45
Sold 2600 SEBL at 13.55

Bought 800 SEBL at 13.27
Bought 1800 SEBL at 13.30
Sold 2600 SEBL at 13.45

Garet
 
Sniper & Garet,

I had problems with Real Tick as well today; cost me $1000 in profits!

I had a short in BRCD and went to cover at about 9:50, when I realized all was not well & couldn't get out at my target of 13.60 - 13.70. Really upset me, especially since the move I wanted was over!
 
garet,

You're trading some serious size for a new trader.

Ease up on the accelerator and back it down my man.

Or you're gonna get burned.

Bucky Lee
 
Sniper Trader,

the money management is key to success in trading these setups.

A question or two about how you play the scans and manage your money. For instance, on AMGN (which you said you went short as it showed up on the SkyScraper scan), it closed on Thur at 59.45. Tony's method says short when it goes below the close, but if you did that on Fri you would have gotten in after 10:45 and then had to withstand a runup to 59.93 before it sold off again. So depending on your exact fill you would have been watching the trade go against you almost .50?

And on some of the selections from the BottomFisher, as many opened above Thur's close (triggering them in Tony's system), ones from your list like LAMR, ATVI, EXBD, etc all temporarily reversed and sold off from around 9:36-9:45. In other words, if you played the gap-ups (which met the requirement) then you had to withstand a selloff before they reversed back and headed up.

Interesting thing on Fri was that the NDX gapped up about 14 pts, then slowly sold off for 20 min until around 9:50 when it was back to flat. At that point you have no idea whether it's going to be an up day or a down day, so in that situation what have you found as far as favoring the SkyScraper or the BottomFisher? Or do you ignore the direction of the market and simply play them if they pop up on your scanner?
 
Hi everyone,

I was talking to Scott from Tradecourse.com on the phone and he brought this discussion to my attention. First, I want to make sure that you all understand that the links posted by Bill to my website were created temporarily for Terranova-Trading's chat room and are not completed yet. Next, it is also important that you understand that these scans go hand in hand with my money management system and entry and exit system which are covered in my new book, How to Take Money from Wall Street.

Although I feel that the scanner is a legitimate tool of trading and warrants this discussion, I do not want to use this site to promote my scanner or my book. Consequently, I encourage anyone who has questions about the scanner or about getting the new book to email me directly tonyoz@stockjunkie.com

The reason I jumped into this conversation is that I fear that readers will trade stocks that show up on the scanner blindly or without understanding the risk management philosophy and position sizing rules I have for the different scans.

One concern I had was when I read Bill's statement about me trading the New Kid on the Block setup. Although I love this setup, I truly believe that it is the most challenging one of them all, and it takes a long time to master it and filter through the different candidates to find the best ones. In addition, entry and exit are very tricky, because these stocks can move fast and can also open wide spreads.

My suggestion is to follow these scans for at least 4-8 weeks. Paper trade the strategies first: Are you profitable trading these strategies on paper? Do you feel confidant that you can have positive results if you have real money on the line? After tracking the results for several trading periods, how many of the "promising" stocks actually moved in profitable ways? Would any of the unprofitable stocks have caused you to lose more than you are willing to risk in the market?

These are the questions you must answer to before you risk one cent!

Trade Smart!

Tony
 
Tony,

Great points about the scanner. I assumed that the readers will do their DD before using it.

Magna,

These are all excellent and valid questions, and I see why Tony got concerned with it. I guess I take for granted what I learned from him first hand. The trigger point for the alerts are based on the daily chart, but the entry points must be fine tuned by using the intraday chart. Tony's new book covers the entry points and money management system http://store.yahoo.com/marketwizard/index.html I received a copy while attending his live trading event in August, and I highly recommend this book to everyone. I just ordered a copy for my son (always hard to find good holiday gifts).

I will try to post a chart here to show you my AMGN trade, I hope it works. As I said before I did okay on it, and I meant it. It was no home run! The ones I traded two days earlier were all home runs (more than 10% gain on each) and easy trades to sit in.

Anyhow, AMGN showed in my market minder when trading below the red line. However, it was oversold according to the MA and Bollinger bands. I waited for the rally and I took a short at 59.82 (around 11:25). Stop was placed at 60.04 (above blue line). Stock went down. Trailing stop placed above yellow line. Got stopped at 59.18 just before noon. Nothing fancy here.



As to the other stocks from the bottom fisher, I didn't trade them, so I can't just look at the chart in hindsight and say, I'd buy it here and sell it here ala Traderx :D

I just got back from Oakland, and let me tell you, I want Bin Laden dead! They cancelled all the direct flights out of John Wayne to the Bay area. I had to fly to LAX then to Oakland. What a nightmare! From now on I have to drive to LAX to fly. Amazing how I took certain things for granted.

Have a great trading week,

Bill
 

Attachments

Bill,

Thanks for your thoughtful response, and your posting of the AMGN chart to explain your trade (the proverbial picture is definitely worth 1K words). I appreciate your thinking re: it being oversold when it popped up on your scanner, and your willingness to later jump in with a short during the rally, placing your stop just above the early morning support. Good trading!

One final aside, I noticed your timeframe was 2min, do you normally use this instead of the choppier 1min?
 
Yes, I like the 2 minute with 20 MA simple close + 20 upper and lower envelopes. It works well for me trading QQQ as well. I forgot to mention an important point about the AMGN trade and that is that the candle body was still down from open (black, red or green in my case) on the daily chart. It may not be as obvious to the beginner.

Dustin posted a shot of my screen sometime ago, I will try to find the link and post it here again.

Bill
 
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