Classic Geometric Patterns and Narrow Range Setups

Tyren - there's no doubt about the consolidation there. Nice chart and thanks for the heads up.

Thinskis, speaking of heads up, mine is still up my... wait, let me phrase it better.... I'm still without an acct that handles commodity futures, so once again the herd moved without me. You, on the other hand, have done well sir.

Himself, those are excellent candidates and thanks for those charts.
 
Quote from snooptrader:

MCIP, GT, MENT, COH, CI, CKR look interesting going into Thursday.

I cannot post charts right now, but will try to later.
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CI and MENT did not trigger for me - CI did not take out prior day's high (and was a gap down), MENT was a gap down below the previous low which invalidates the trade for me.


All the rest had a nice start - COH and GT gave back some gains, but all are multi-day holds for me. I will try to contribute more in 2005, as this is one of my core strategies - although I filter my candidates heavily based on support/resistance and fibs.

The above were all ID/NR3 - there were many that met that criteria for today, but my filters narrowed it to these six.

Happy Holidays all.
 
Hey snoop' - thanks a lot for the followup. That is valuable stuff. Btw, the gap down that didn't take out the high is exactly how I play gaps when using this strategy.

Thanks to everyone who has contributed to this thread. I really appreciate it, and I know there are scores of others who do so, too.

Thanks again, and Happy Holidays to all of you.
 
Excellemt thread guys.. just finished wading through it all.

I am found that often taking the "2nd move" or retracement post breakout/breakdowndown works well also. (as it approaches mocing averages


John Netto focuses on this as the crux of his trading strategy, and it seems to also offer low risk entries..
(I dont have a chart I apologize)

**Also, this hasnt been mentioned yet, but doing this helps avoid the initial "flush out" false move on high volume.. when the stock moves (lets say down) on strong volume only to have the particular bar close on its high range. this action on strong volume can give a great signal to go long the stock ,as all the weak hands were flushed out, and the bulls stepped in to take it up.


my .02
 
mdl' great point about the second move. SOmetimes you miss the move altogether because there is no retracement, but otherwise like you said it is a low risk entry.

Here is a Daily chart of BRCM. Today is an inside day so far, but also notice the last several sessions have been consolidating at the 20 sma. The 40 sma has been involved, too.

Larry Williams once said he was lucky that he used a dull pencil to draw trendlines, ie., the one I drew is fairly thick. The point is these tools are just that...tools... to be used to develop guidelines by which you base your trading decisions.

BRCM makes some nice moves on breaks. As always check longer and shorter time frames and news prior to entry.
 

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Quote from inandlong:

The purpose of this thread is to facilitate the discussion and observations regarding the classic geometric patterns as described by Edwards and Magee and the Narrow Range Inside Day setup as described by Crabel.
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I find NR4 Inside Days and NR7 patterns very effective for daytrading. I use that in our scanner combined with volume for this time of the day over 200% and a breakout signal, either over yesterday's high/low or above/below the first 15 min bar's high/low.

I also use Volume Profile charts to see where the real support/resistance is and also watch the largest traders by doing bid/ask analysis. For most stocks I watch the 1,000 or 2,000+ size traders. In the emini futures I trade in the direction the 100+ lot traders are. If they suddenly come in and buy the bottom I may decide to as well.
 
On days where the previous range in the indexes is high and also a trend day I will look at just plain NR4 days and if today's move is in the direction of yesterday there can be good trades.

Today I found NGPS, FS, and DIOD. All also have over 100% above avg volume (NGPS 544%, FS 182% and DIOD 123%).

NGPS fell like a rock, down over $8. I tend to hold narrow range trades longer than my usual scalp trade.
 
Topgun' your posts are all anyone needs to make a living trading.

Please know that you have helped a lot of traders today, and thank you for the outstanding contribution.
 
Quote from inandlong:

Topgun' your posts are all anyone needs to make a living trading.

Please know that you have helped a lot of traders today, and thank you for the outstanding contribution.
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Thanks! Here are some more tools that I use in trading. Knowing market direction is half the battle. I use volume profile charts of the emini to time stock trades. Here you can see where all the trades went off and I have 20+ lot traders colored red and the white is the smaller traders. The buy/sell pressure is what is key, it shows 20+ lot traders and whether they are net long/short and how many contracts. You can see they are slightly long the first 30 mins but were wrong and had to cover, they also went massively short.

The NYSE Volume tool on the bottom I use to predict which way the market is most likely to go the next 30 mins. The first 30 mins there is more buying in up stocks than selling in down stocks but not by much and less than the selling into the close yesterday. As soon as we went above the first 30 min bar high and failed I knew we'd test yesterday's lows so got short. You can see a lot of bigger lot traders also got short the second half hour and stayed short the entire day.


<a href="http://www.topgunsoftware.com/"><img src="http://www.topgunsoftware.com/elitetrader/volumeprofile.gif" border=0></a>
 
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