This has been my second best week ever. I don't know, when you're over 100% long and the market rips for 1k+ pts, it's hard to loose. From friday's open last week, (ask the guys in my room, I loaded 5 digit size on many large caps on the open, ,ge,mu,aol) to the close today, I cleared 40k. It makes me basically even for the month, I show a few k profit, but nothing significant. I got raped BAD earlier in the month on pvn. I'd hard to be a fader when the market drops 2k dow pts in 7 trading days. I'm now finally all cash (I have a hadfull of occf still, but nothing meaningful). My main regret is missing BEAV. I love that company, and can't believe I didn't buy any. I'm getting ready to switch to a short posture I think on some names, and also try my hand at mo-mo on some illiquid ideas I've had over the weekend. Good luck to you all, this tony oz stuff is quite interesting... as is the flow analysis stuff. I've been reading a lot of it, and am quite intrigued.
Choppy markets today - getting whipsawed to death ... :-(
- Thread starter Harry
- Start date
Since I utilize swing trading patterns similar to the Sky Scraper and Bottom Fisher, I thought I'd do a quick analysis in TC2000 and Tradestation to see how they looked in terms of: number of daily candidates and how accurate they appeared at first glance.
I realize that both Tony Oz and Bill (Sniper_Trader1) have already posted on this thread that just the signals alone aren't enough to take the trade. After seeing the initial results of the analysis, I fully concur. But these patterns (like many other patterns) may lead to some pretty impressive results at times.
NOTE: Please understand that I do NOT subscribe to Tony Oz's scanner service, so this analysis only provides a limited perspective. It does not take into account the dynamic and real time nature of his scanning service, nor the bigger picture regarding how these signals should be used.
OVERVIEW
I created the code in both TC2000 and Tradestation in order to identify those days when the 3 day setup pattern for the Sky Scraper and Bottom Finder was followed by the trigger day. I did not use any other filters other than: Volume > 300k on the day of the trigger, and short (Sky Scraper) candidates had to have a price > $10/share. I'm sure there are some other filters incorporated in the scanner service to reduce the number weak candidates. And even then, further analysis needs to take place before taking the trade - such as making sure the setup of the patterns takes place at a good support/resistance area.
RESULTS
Using TC2000
I was able to get a feel for how many potential stocks got triggered on Friday 9/28. Since Friday was an up day, the Bottom Fisher pattern was more active. And based on the number of candidates identified, I can understand how a filtering process must be taken in order to determine whether to consider a trade entry.
Sky Scraper (shorts)
178 trades triggered
59 closed lower than that prior day
Bottom Fisher (longs)
238 trades triggered
185 closed higher than the prior day
Note: Because of gap openings, some of the trades listed above that closed in favor did not provide an entry from the prior day's closing price (the trade entry price). And in many circumstances, a trade entry will NOT take place near the prior day's closing price based on method of trade entry. Therefore, there's a chance that even if the stock closed in a favorable direction, you could of been stopped out for a loss.
At first glance, there appears to be way too many candidates to follow. Imagine having around 200 stocks to monitor for a trigger and then having to determine the entry and stop prices. I assume the scanning service has more filters and possibly a rank ordering feature to keep the noise down. But as Tony said in an earlier post, blindly following the signals without further analysis is not advised.
Using Tradestation
I identified those days on a daily chart when the trigger had taken place for the patterns. See the attached chart below. The green dots below the daily bar identify the day when a Bottom Fisher trigger to buy (price went through prior day's closing price) took place. Likewise, the red dots identify Sky Scraper setups where a trigger took place to short the stock on that day.
ADLR - You can see that this stock has had its fair share of "getting whipsawed to death." See the signals in June at the left of the chart. Short a stock enough times, and you'll eventually get it right. And the false signal on Friday, OUCH! There were some days where you could of made a decent day trade, a few trades offering good gains. But this stock doesn't look that great to trade using the patterns, at least over the past several months.
AMGN - This one looks like you could gotten some good trading opportunities. Many of the trigger days appear to have good day trading potential, and there were a few signals that actually followed through for some good swing trades. Many of the day trades didn't make much in absolute points, but they seemed to offer some pretty good risk/reward opportunities, which is what truly counts.
So in the end, it appears that there are some stocks which are better suited to these patterns. Sounds just like the same 'ol story regarding how other systems or indicators perform better in some stocks vs. others.
THOUGHTS
As I mentioned earlier, I already look at buying on weakness or selling on strength for swing trades, so this method is similar to what I am already comfortable with. However, if you are more comfortable with breakouts, you may not be too successful trading this type of pattern.
Just using the patterns and setup signals themselves will NOT make you money. You need to combine the signals carefully with other tools and techniques before you can truly take advantage of these signals. My quick analysis has proven that. I am looking forward to getting his book to learn more.
It's amazing how much attention entry signals and systems get. Although there are folks out there who write about and promote it, risk management, trade management, and exit signals don't get much attention. These Bottom Fisher and Sky Scraper patterns sure do provide some great opportunities, but they are far from the ever elusive holy grail of signals.
Here's an interesting analogy. In golf, there are some folks who focus an inordinate amount of time and effort on the initial drive off the tee. You know those folks. They always have the newest $600 drivers, and use it to practice 90% of the shots at the driving range. Even though they may already realize it, the majority of the shots in golf consists of the short game. So it's your short game is what will truly make or break you. But hey, nothing compares to smashing the ball 300+ yards, right? Along the same lines, do we all spend too much time only trying to find the best entry signals?
CONCLUSION
Take note (myself included) that these patterns are yet another tool in the traders arsenal. They will, in of themselves, NOT make you a profitable trader. Risk management, trade management, and exit management are just as important as the entry management. But I believe these patterns provide great potential for both day trades, and swing trades. I like 'em and will be learning more about 'em.
Like many others here, I'm far from a super successful trader and appreciate the learning that this web site and this thread has offered. I've learned a lot of everyone, and hope to continue to do so. So let's keep the great discussions and feedback going!
I realize that both Tony Oz and Bill (Sniper_Trader1) have already posted on this thread that just the signals alone aren't enough to take the trade. After seeing the initial results of the analysis, I fully concur. But these patterns (like many other patterns) may lead to some pretty impressive results at times.
NOTE: Please understand that I do NOT subscribe to Tony Oz's scanner service, so this analysis only provides a limited perspective. It does not take into account the dynamic and real time nature of his scanning service, nor the bigger picture regarding how these signals should be used.
OVERVIEW
I created the code in both TC2000 and Tradestation in order to identify those days when the 3 day setup pattern for the Sky Scraper and Bottom Finder was followed by the trigger day. I did not use any other filters other than: Volume > 300k on the day of the trigger, and short (Sky Scraper) candidates had to have a price > $10/share. I'm sure there are some other filters incorporated in the scanner service to reduce the number weak candidates. And even then, further analysis needs to take place before taking the trade - such as making sure the setup of the patterns takes place at a good support/resistance area.
RESULTS
Using TC2000
I was able to get a feel for how many potential stocks got triggered on Friday 9/28. Since Friday was an up day, the Bottom Fisher pattern was more active. And based on the number of candidates identified, I can understand how a filtering process must be taken in order to determine whether to consider a trade entry.
Sky Scraper (shorts)
178 trades triggered
59 closed lower than that prior day
Bottom Fisher (longs)
238 trades triggered
185 closed higher than the prior day
Note: Because of gap openings, some of the trades listed above that closed in favor did not provide an entry from the prior day's closing price (the trade entry price). And in many circumstances, a trade entry will NOT take place near the prior day's closing price based on method of trade entry. Therefore, there's a chance that even if the stock closed in a favorable direction, you could of been stopped out for a loss.
At first glance, there appears to be way too many candidates to follow. Imagine having around 200 stocks to monitor for a trigger and then having to determine the entry and stop prices. I assume the scanning service has more filters and possibly a rank ordering feature to keep the noise down. But as Tony said in an earlier post, blindly following the signals without further analysis is not advised.
Using Tradestation
I identified those days on a daily chart when the trigger had taken place for the patterns. See the attached chart below. The green dots below the daily bar identify the day when a Bottom Fisher trigger to buy (price went through prior day's closing price) took place. Likewise, the red dots identify Sky Scraper setups where a trigger took place to short the stock on that day.
ADLR - You can see that this stock has had its fair share of "getting whipsawed to death." See the signals in June at the left of the chart. Short a stock enough times, and you'll eventually get it right. And the false signal on Friday, OUCH! There were some days where you could of made a decent day trade, a few trades offering good gains. But this stock doesn't look that great to trade using the patterns, at least over the past several months.
AMGN - This one looks like you could gotten some good trading opportunities. Many of the trigger days appear to have good day trading potential, and there were a few signals that actually followed through for some good swing trades. Many of the day trades didn't make much in absolute points, but they seemed to offer some pretty good risk/reward opportunities, which is what truly counts.
So in the end, it appears that there are some stocks which are better suited to these patterns. Sounds just like the same 'ol story regarding how other systems or indicators perform better in some stocks vs. others.
THOUGHTS
As I mentioned earlier, I already look at buying on weakness or selling on strength for swing trades, so this method is similar to what I am already comfortable with. However, if you are more comfortable with breakouts, you may not be too successful trading this type of pattern.
Just using the patterns and setup signals themselves will NOT make you money. You need to combine the signals carefully with other tools and techniques before you can truly take advantage of these signals. My quick analysis has proven that. I am looking forward to getting his book to learn more.
It's amazing how much attention entry signals and systems get. Although there are folks out there who write about and promote it, risk management, trade management, and exit signals don't get much attention. These Bottom Fisher and Sky Scraper patterns sure do provide some great opportunities, but they are far from the ever elusive holy grail of signals.
Here's an interesting analogy. In golf, there are some folks who focus an inordinate amount of time and effort on the initial drive off the tee. You know those folks. They always have the newest $600 drivers, and use it to practice 90% of the shots at the driving range. Even though they may already realize it, the majority of the shots in golf consists of the short game. So it's your short game is what will truly make or break you. But hey, nothing compares to smashing the ball 300+ yards, right? Along the same lines, do we all spend too much time only trying to find the best entry signals?
CONCLUSION
Take note (myself included) that these patterns are yet another tool in the traders arsenal. They will, in of themselves, NOT make you a profitable trader. Risk management, trade management, and exit management are just as important as the entry management. But I believe these patterns provide great potential for both day trades, and swing trades. I like 'em and will be learning more about 'em.
Like many others here, I'm far from a super successful trader and appreciate the learning that this web site and this thread has offered. I've learned a lot of everyone, and hope to continue to do so. So let's keep the great discussions and feedback going!
ib_luigi,
Thanks for the AWESOME post!
You will like Tony's book, because he really puts it all together in terms of risks, rewards, entry and exit.
If any of you only have access to an overnight scanner, the way to set it up is for either three up days in a row or three down days in a row. Then look to see if today is the first down or up day for these stocks, so you catch it in real time. Prior to Tony's real-time scanner, this was the way I used to do it.
A few things I added to my scan were average volume>750K and average trading range > 1.25.
If you set up the overnight scans to find the first down day or up day then you can only trade the second day of the move, and not the first. This is not the philosophy of the scan and it represents lower reward to risk ratio.
If you set it up like I suggested above, the big problem is that you will have a large list of stocks to follow the next day and see if they trigger the first down or up day. But with the real time scanner, the stocks that show up are only the ones that actually trigger. This is a HUGE difference and worth every penny of the $20.00 monthly fee. Let's face it, one good trade pays for it for a very long time.
If you are not a RealTick user then it will cost you more. Anywhere from 150-300 a month minus what you are paying right now for data. My broker pays for my RealTick after 50 trades www.terranova-mb.com I am not affiliated with any of the companies listed here, and I am just writing this to try to provide information and options to the readers.
<b>FWIW, after this last month, I can't imagine having to trade without the Oz Scanner, ever! Mark my words, once you use it for a month you will feel the same way. It's like switching from dial-up to broadband. And once you taste broadband there is no going back to dial-up.</b> If you don't feel the same way, I will face your criticism like a man!
Tony, if you are reading this, feel free to quote me on your website.
Have a great trading week everyone,
Bill
Thanks for the AWESOME post!
You will like Tony's book, because he really puts it all together in terms of risks, rewards, entry and exit.
If any of you only have access to an overnight scanner, the way to set it up is for either three up days in a row or three down days in a row. Then look to see if today is the first down or up day for these stocks, so you catch it in real time. Prior to Tony's real-time scanner, this was the way I used to do it.
A few things I added to my scan were average volume>750K and average trading range > 1.25.
If you set up the overnight scans to find the first down day or up day then you can only trade the second day of the move, and not the first. This is not the philosophy of the scan and it represents lower reward to risk ratio.
If you set it up like I suggested above, the big problem is that you will have a large list of stocks to follow the next day and see if they trigger the first down or up day. But with the real time scanner, the stocks that show up are only the ones that actually trigger. This is a HUGE difference and worth every penny of the $20.00 monthly fee. Let's face it, one good trade pays for it for a very long time.
If you are not a RealTick user then it will cost you more. Anywhere from 150-300 a month minus what you are paying right now for data. My broker pays for my RealTick after 50 trades www.terranova-mb.com I am not affiliated with any of the companies listed here, and I am just writing this to try to provide information and options to the readers.
<b>FWIW, after this last month, I can't imagine having to trade without the Oz Scanner, ever! Mark my words, once you use it for a month you will feel the same way. It's like switching from dial-up to broadband. And once you taste broadband there is no going back to dial-up.</b> If you don't feel the same way, I will face your criticism like a man!
Tony, if you are reading this, feel free to quote me on your website.
Have a great trading week everyone,
Bill
@Sniper Trader
I hope we can continue our discussion about the Oz scans ...
@all
Since I don't have access to the Oz scans via Realtick, I scanned the NASDAQ 100 stocks by hand ... and found a lot of Skyscraper candidates ... not the best ones today
The only Bottomfisher Play I did today was ADLAC - it was OK but no real homerun since I reacted a bit to slowly ...
Besides I traded some QQQ plays ... unforunately I missed the initial run
I also traded ORCL - though it was a good breakout play ... but I think again I picked a bad entry ...
What stocks did you trade today ?
Harry
I hope we can continue our discussion about the Oz scans ...
@all
Since I don't have access to the Oz scans via Realtick, I scanned the NASDAQ 100 stocks by hand ... and found a lot of Skyscraper candidates ... not the best ones today
The only Bottomfisher Play I did today was ADLAC - it was OK but no real homerun since I reacted a bit to slowly ...
Besides I traded some QQQ plays ... unforunately I missed the initial run
I also traded ORCL - though it was a good breakout play ... but I think again I picked a bad entry ...
What stocks did you trade today ?
Harry
Hi Harry,
I have been in bed for the last three days. The good news is that I did not die in a plane crash.. the bad news is that I caught a nasty virus on the plane on the way back from Oakland. Looks like I missed a good rally, but I was bearish, so maybe I saved money by being sick
I have been in bed for the last three days. The good news is that I did not die in a plane crash.. the bad news is that I caught a nasty virus on the plane on the way back from Oakland. Looks like I missed a good rally, but I was bearish, so maybe I saved money by being sick
Hi Sniper Trader !
Get well soon !
I really hope we can continue our discussion about the Tony Oz setups ! You can also contact me at newharry@gmx.at !
Harry
Get well soon
!I really hope we can continue our discussion about the Tony Oz setups ! You can also contact me at newharry@gmx.at !
Harry
The following posts have the final lists on the scans sorted by %change from the open.
More...
If anyone wishes to see any other scan or NYSE stocks let me know and I'll post a screen shot.
It is important that you know that I didn't trade any of the stocks, have any positions in any of the stocks, or looked at any of the charts. I just posted it for your enjoyment
Back to bed I go,
Bill
If anyone wishes to see any other scan or NYSE stocks let me know and I'll post a screen shot.
It is important that you know that I didn't trade any of the stocks, have any positions in any of the stocks, or looked at any of the charts. I just posted it for your enjoyment
Back to bed I go,
Bill
Don't know what happened to the other two. Trying again ...