DT1 Swing Trading Journal

DT1
Good threat your starting here. I'll keep watching to see your progress.

I've been learning the ropes to swing trade for a few years now and am now starting to see some success. What has helped me make the leap has been a few things, but most importantly the record keeping of my equity curve. After I started drawing my equity curve, I started to realize all the importance of the money management rules.

I would recommend reading Alexender Elder's book "Come into my trading room". He offers plenty of good advice.


What type of trategy are you trading? You should have a defined trading plan. e. g. I trade breakouts. If the stock breaks a key trendline with increased volume and on a closing basis, I enter the trade. Depending on the money management and the chart setup set an apropriete stop.

Some links you might find usefull.
http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID369857&cmd=show[s10928098]&disp=O

and
http://www.leavittbrothers.com


Good luck on your progress.
 
Quote from mars22:

DT1
Good threat your starting here. I'll keep watching to see your progress.

I've been learning the ropes to swing trade for a few years now and am now starting to see some success. What has helped me make the leap has been a few things, but most importantly the record keeping of my equity curve. After I started drawing my equity curve, I started to realize all the importance of the money management rules.

I would recommend reading Alexender Elder's book "Come into my trading room". He offers plenty of good advice.


What type of trategy are you trading? You should have a defined trading plan. e. g. I trade breakouts. If the stock breaks a key trendline with increased volume and on a closing basis, I enter the trade. Depending on the money management and the chart setup set an apropriete stop.

Some links you might find usefull.
http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID369857&cmd=show[s10928098]&disp=O

and
http://www.leavittbrothers.com


Good luck on your progress.
More...


Mars when do you enter the trade... at the close? What type of position strategy do you use.. also how do you exit your breakouts...

Can you further provide this thread with a few recent examples.. of trades you have done?


Thanks..
-- MIKE
 
Hi Mike,
I'll post a few trades I recently made. As for strategy, I prefer to enter the trade near the close to ensure that the breakout occurs on a closing basis. Whenever I don't follow this rule, it usually results in a bad trade. For example I went long MXO on Wednesday at $6.28 playing a breakout, but the stock reversed during the day resulting in a inverted-hammer candle which is not what I'm looking for on a breakout. I got stopped out of that trade on Friday at $5.96. My error on the trade was my entry. I didn't wait for a breakout on a closing basis.

What type of position tradegy I use? Well it all depends on the overall market. If the markets are trending and breakouts are working, I would like to enter a position based on my 2% money management risk, then once the stop as been moved to breakeven, I would pyramid another position that is equal to 2% risk. It all depends on the environment. If breakouts arn't working well and there is a bunch of choppiness in the markets like in the current market condition I usually take profit when given. 1 or 2 days after the trade I'll take my profits and move on.

How do I get out? I keep moving my stops up with the trade, usually the low of the candle 2 days prior, or the privious day's low. If the markets arn't trending, I usually look for reversal forming candles to take profit. Any candle with a tail that shows sign of a top is a good time to book profits.



On March 25th I went long WDC at $8.40; Breakout of a symmetric triangle on increased volume. My stop was placed at $7.99. If attached my annotated chart. Then on the 28th, I closed the trade at $9.25. The inverted hammer was a warning of a top.
 

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Another trade I made;

March 28, I went short VRTY at $15.25 on a breakout of the lower trend line. Stop placed at day's high. I havn't annotated the attached chart, but it's pretty obvious. On vrty2 you can see a negative divergence forming with the MACD which is a good sign for the break to the downside.

The next trading day, VRTY gapped down big so I took profit at $13.78. I was a little slow taking profit, and left a good $0.90 on the table. When situations like this happen it is best to take profit at the open and move on to the next trade or wait until the dust settles.
 

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If your interested in a current trade I'm in. I'm short MACR at $13.34. I didn't catch the initial breakout, but the pull back provides a good entry point. My stop is above Thursday's high at $13.73. Depending on the overall markets, I might add to this position if it breaks bellow $11.86.
 

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Mars,

Thanks for your posts... How do you scan the market everyday to come up with your trade ideas?

ALso.. I see you enter and exit the position on the close usually.. unless you get a windfall profit...

ALso... What is the criteria for a setup... It has to be a break off key trendline support resistance... but do you need it to close near the high for a long and close near the low for a short...

Also.. do you need volume to be greater than the avg...

I know some breakout traders.. that dont even pay attention to volume.. they say it really does not make a difference when swing trading... sometimes when you get a very strong volume breakout.. it very well can be a climactic move to signify the end. Alot of pro traders say.. that even non heavy volume breakouts.. can be traded just as well... your opnion on this idea is welcome..


---MIKE
 
I don't use any scanning software. I get my trading ideas usually by going through the public chartson stockcharts.com. The links I provided earlier are my favorit place to search for good trade ideas.

I enter my trades on a closing basis. The exits don't need to be on a closing basis, because it is my stops that take me out, or I personally think the current level is a good place to take profits.

yes, I trade key trendline breakouts. I would prefer that the candles are solid, meaning that the stock would close at the day's high or low. But it doesn't really matter, as long the stock breaks out on a closing basis.

I look for above average volume on the breakout. It implies the strenght of the breakout, giving it more significance.

I use volume as a comfirming indicator. I prefer to enter trades that have increased volume, but not all of my trades are on 3X average volume. As in any trading strategy there is no one magic indicator.
 
hey,

NXTL has yet broken out of any key support/resistance. I have attached an annotated chart. One thing you need to be carefull when trying to trade a breakout out of one of these rectangle type trading range is that many times there is a false breakout which then reverses and ends up breaking the other way.



This is DT1's forum and I wouldn't want to deviate his forum way off topic. I think it would be a good idea to start a swing trading forum for the purpose of discussing various swing trading techniques.
 

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