its a suckers bet. it will whip you out.
Classic Geometric Patterns and Narrow Range Setups
- Thread starter inandlong
- Start date
Hey Seth'!Quote from SethArb:
in this thread ... but I find sometimes the same setups
working in all time frames ....
only problem is I do not have the software of funds or patience
to catch them all
You're absolutely right imo. I have tried only one real time screener and it is StockWatch Pro. I know I rave about it, and I am not affiliated with the company in any way. It's just that if you have an idea, you can code it quickly and scan for it real time and watch it from there. The cool thing is now it accepts the Esignal data feed also, along with QCharts. I am a Q user. Forty bucks a month.
Last week, just for fun, I used the same code for NRID stuff, but changed the D to 60, and 15 and 10. For the set of stocks that qualify as being priced between 10 and 70, and 65 day avg volume of 500,000 or more, the typical 10 minute scan produced about 40 stocks every 10 or 15 minutes, etc.. It's really pretty neat. Also as you might imagine, the smaller the time frame, the smaller the inital break opportunity is. I did not track to see if there was a lot of follow-thru for larger gains.
Sunny's concern has validity if one is looking for an MOC exit. I checked all the picks this week using a 5 minute chart, and there typically was plenty of time to at least get out with a scratch or better. By that I mean the break stayed profitable for at least an hour or so before reversing. Using the NRID as a daytrade setup requires some execution skill, and it requires some trading skill. I have not monitored its performance as a multiday trade.
One thing the NRID setup does do is provide candidates that are consolidating. No, not all are consolidating, ie., 3 rally days followed by an inside day will signal an NRID4. But many of the candidates are in consolidation patterns that can be traded when the narrow range of the entire pattern is broken, and not just the NRID itself.
Once again, I will reiterate.... as a trader you either believe that consolidation/congestion/indecision precedes breaks/trends/decision.... or you don't. NRID's and geometric patterns are merely tools to help identify stocks in consolidation. If as a trader one doesn't believe that consolidations are a prelude to a trading opporunity, then that's good too.
X update. This pattern is presently 2/3 through which is "classically" the prime zone for a break. However, earnings CC is today at 2pm which might delay any dramatic activity.
Selling yesterday's resistance worked out... however if X had rallied from there the loss would have been very small, and you would have known right away to get out and wait for further confirmation or move on to another trade.
Selling yesterday's resistance worked out... however if X had rallied from there the loss would have been very small, and you would have known right away to get out and wait for further confirmation or move on to another trade.
The X chart helped me preserve a nice profit. A few days ago I had sold Aug 35 calls against X at 1.65 when X closed below the 20 day sma. Theta and price worked in my favor going forward. When today's break down appeared to fail and price moved back into the pattern prior to the conference call, I covered the calls at .90.
So even though the pattern failed per se, it still helped me to make a profitable trade.
So even though the pattern failed per se, it still helped me to make a profitable trade.
My contribution MSSN - a NRID. Plus, a pullback to the 50DMA (sitting right on it), and a strongly trending stock.
Good luck.
http://finance.yahoo.com/q/ta?s=MSSN&t=6m&l=on&z=l&q=c&p=m50&a=&c=
Good luck.
http://finance.yahoo.com/q/ta?s=MSSN&t=6m&l=on&z=l&q=c&p=m50&a=&c=
Not so new any more newtoet! You're closing in on a year as a registered member.
This is an excellent chart to highlight not only the NRID pattern but also divergence between indicator and price. The low price and low volume of the stock will make it interesting to watch.
By no means does divergence mean the stock is going to tank. A review of the Dow and the Nasdaq from 1998-2000 will show you that. But there are many traders, myself included, who believe that divergence is one of the most powerful setups around. I especially like them when they coincide with price crossing a moving average. And I really really like them when the MACD is about to cross the zero line at the same time the price crosses the MA... if it does. Notice the indicator settings are somewhat industry standard. Nothing exotic here.
The chart shows that as price has climbed higher, the indicators have failed to confirm the rise. Specifically look at price peaks in April, mid-June, and mid-July and compare those peaks to the indicators. This divergence between price and indicator, ie., higher price highs versus lower indicator highs, has been a bread and butter setup for me and for many other traders.
I'd look to short the stock when it closes below the 50 sma. My initial stoploss is a close above the 50. The low price and volume of this stock will keep me from participating in a move however. But that's me. I have no idea how stocks priced at this level with lower volume respond.
Thnaks for the great contribution newtoet!
I have a question for the NR/Inside day crew:
Do you place less emphasis on a setup where the inside day is printed after a day with a larger than normal range?
[see attached]
More specifically, if the range of the day prior to the inside day is larger than the 20 day ATR does this make this inside day LESS significant than an inside day ???
Do you place less emphasis on a setup where the inside day is printed after a day with a larger than normal range?
[see attached]
More specifically, if the range of the day prior to the inside day is larger than the 20 day ATR does this make this inside day LESS significant than an inside day ???