Classic Geometric Patterns and Narrow Range Setups
- Thread starter inandlong
- Start date
Outstanding Oddi! That will be great.Quote from oddiduro:
I will also apply my brand of tech analysis to your recomendations. This could get interesting
Regards
Oddi
Imagine a thread of members working to provide specific profit opportunities daily and intraday. Truthfully, I bet Baron had something of this nature in mind from the start.
Today I will download the StockWatch Pro software and try to get up and running by this evening with some results. Man, I wish I had kept the codes I had written previously, they aren't difficult, just tedious. I could have it finisjed sooner, but gee whiz I'm taking my family boating for most of the day.
For starters.... here are candidates from the SP100 that qualify as NR7/ID .... you know, it is much easier on a keyboard-challenged person like myself to type NRID7 so that is how I am going to refer to it from now on.
As a review, this means the daily range on Friday of each stock on this list was the narrowest daily range of the 6 days preceding Friday... and the high and low on Friday were less than and greater than respectively than Thursday's high and low.
Only 2 of these stocks have ATR14's greater than 1 and those are 1.13 for each. The rest are less than 1 with the average being ~ .70. So.... the recent volatility of these SP100 stocks has not been that great; therefore, one might expect to take profits more quickly and not look for the home run. However, I'm applying what I think is a logical interpretation and who's to say Monday won't be a giant day?
The list: BA, BC, CSCO, JNJ, PG, SLB, TEK, XRX.
The NRID4 list included MSFT.
For Monday the trade is triggered when the price breaks the extremes of Friday's range. I like H+.07stop/limit.10 which can be entered before the market opens at 9:30. But I also prefer the stock to open within the previous day's range and then break. For stocks that gap open outside of my stop/limit order, the opposite extreme becomes the only one that can trigger a trade. Certainly gap trading rules can apply here but they are gap trading rules, and not NRID rules.... well my NRID rules. How it is traded is up to the trader, ie., some guys might have larger/smaller entry zones, etc.
Perhaps through communal effort we might be able to produce some consistently effective guidelines.
For now, geometric patterns will be posted as I stumble across them, or hopefully as easy' , oddi' and others provide them.
PS: here is a chart that illustrates the setup.
As a review, this means the daily range on Friday of each stock on this list was the narrowest daily range of the 6 days preceding Friday... and the high and low on Friday were less than and greater than respectively than Thursday's high and low.
Only 2 of these stocks have ATR14's greater than 1 and those are 1.13 for each. The rest are less than 1 with the average being ~ .70. So.... the recent volatility of these SP100 stocks has not been that great; therefore, one might expect to take profits more quickly and not look for the home run. However, I'm applying what I think is a logical interpretation and who's to say Monday won't be a giant day?
The list: BA, BC, CSCO, JNJ, PG, SLB, TEK, XRX.
The NRID4 list included MSFT.
For Monday the trade is triggered when the price breaks the extremes of Friday's range. I like H+.07stop/limit.10 which can be entered before the market opens at 9:30. But I also prefer the stock to open within the previous day's range and then break. For stocks that gap open outside of my stop/limit order, the opposite extreme becomes the only one that can trigger a trade. Certainly gap trading rules can apply here but they are gap trading rules, and not NRID rules.... well my NRID rules. How it is traded is up to the trader, ie., some guys might have larger/smaller entry zones, etc.
Perhaps through communal effort we might be able to produce some consistently effective guidelines.
For now, geometric patterns will be posted as I stumble across them, or hopefully as easy' , oddi' and others provide them.
PS: here is a chart that illustrates the setup.
well. to be honest i do not trade these as i havent found a good way to avoid/deal with the outside day whipsaws. those drive me scizo.
and just for example, lets watch what happens to Boeing.
Quote from inandlong:
For starters.... here are candidates from the SP100 that qualify as NR7/ID .... you know, it is much easier on a keyboard-challenged person like myself to type NRID7 so that is how I am going to refer to it from now on.
As a review, this means the daily range on Friday of each stock on this list was the narrowest daily range of the 6 days preceding Friday... and the high and low on Friday were less than and greater than respectively than Thursday's high and low.
Only 2 of these stocks have ATR14's greater than 1 and those are 1.13 for each. The rest are less than 1 with the average being ~ .70. So.... the recent volatility of these SP100 stocks has not been that great; therefore, one might expect to take profits more quickly and not look for the home run. However, I'm applying what I think is a logical interpretation and who's to say Monday won't be a giant day?
The list: BA, BC, CSCO, JNJ, PG, SLB, TEK, XRX.
The NRID4 list included MSFT.
For Monday the trade is triggered when the price breaks the extremes of Friday's range. I like H+.07stop/limit.10 which can be entered before the market opens at 9:30. But I also prefer the stock to open within the previous day's range and then break. For stocks that gap open outside of my stop/limit order, the opposite extreme becomes the only one that can trigger a trade. Certainly gap trading rules can apply here but they are gap trading rules, and not NRID rules.... well my NRID rules. How it is traded is up to the trader, ie., some guys might have larger/smaller entry zones, etc.
Perhaps through communal effort we might be able to produce some consistently effective guidelines.
For now, geometric patterns will be posted as I stumble across them, or hopefully as easy' , oddi' and others provide them.
PS: here is a chart that illustrates the setup.
Hmmmm.
Boeing is about to turn over, but not yet, maybe a 1.5 to 3 point upside potential or so.
Sunny if you get an outside day, confirm direction of breakout with volume.
With BA volume supports an upside breakout. But a top is in the process of forming.
Regards
Oddi
It looks like Boeing is going to gap down. If you look at the chart, there is no confirmation for this trade.
AD is up.
DMI is up.
Another way to avoid the whipsaw.
If you are impatient, go to a smaller time frame and use the tools.
Thanks again IAL, for this learning opportunity, this is a good test for me.
Regards
Oddi
AD is up.
DMI is up.
Another way to avoid the whipsaw.
If you are impatient, go to a smaller time frame and use the tools.
Thanks again IAL, for this learning opportunity, this is a good test for me.
Regards
Oddi
Amen to the whipsaw scizo.
Empirically it "seems" that the outside day - the one that starts within yesterday's range and takes out both of yesterday's extremes - is not very common, or prohibitively common anyway. TS can be easily coded to check for the percentage of days that are outside days as I have decsribed. I'm sure StockWatch Pro can too, I just have not done it yet.
As I looked over the BA chart last nite, it seemed that there were a fair number of outside days with this stock so that mght be something to watch with this one, and others too.
Because I don't like to mess with simple ideas too much, I usually use the previous H and L as stops/reversals. But I have thought that it might be worth investigating other means, such as stoploss if the trade passes back thru 50% of the previous day's range, or crosses back thru today's opeing price, etc.
Also I wanted to mention again that I usually look for these trades to be daytrades, although the authors of the trade setup didn't intend for them to be so. That's just my preference, so there is no way that I would have enjoyed that nice run on GM last week.
easyguru thanks for those stocks! That is good stuff.
Oddi' very interesting charts and descriptions. It's always interesting to see how other traders are using the tools in the bag.
I'm pretty much of a moving average and macd guy. Nothing very fancy. I see BA being supported by the 20 day sma watchers and the tons of ma supporters on the hourly chart. Braek those and there are some points to be had, imo.