Entries only – thank you.

[Gary Fox]

Hello hughb,

Thanks very much for posting.

I am only interested in stocks via end of day data.

Regarding "I buy breakouts inside pullbacks" if it's not too proprietary, with NTRI I see a nice pullback and a 3 bar pivot low of $4.85 on 3/11/05. Then a reversal back up with two good volume days on the 16th and 17th. In this particular case, was that the breakout for you? If so, was the BO thru a moving average or trendline - or something else? (Or, perhpas it's the BO with good volume on 4/7/05.)

With the PTC example, the 28th BO was nice with good volume. Is that the BO in this one?

I appreciate the "20% increase in 3 day volume twice in a row" comments. I have not considered that. I'm thinking that (AVGV3.1 > AVGV3.2 * 1.2) AND (AVGV3 > AVGV3.1 * 1.2) would get me there. I'll take a look. (I'm at work now. Budget/crunch time.)

Thank you sir. Appreciate your input. As you know, there are not too many swing and position traders in these parts. Nice to hear from one.

Take care,

Gary

Quote from hughb:

Hi Gary, I guess my post about position trading wasn't very clear, I trade stocks, not futures.

I look for stocks breaking out with heavier than usual volume, (you can use your tc2000 to scan for them, they have a pre-canned scan called 5 day volume surge, or you can write your own pcf), and I buy breakouts inside the pullbacks.

My favorite book is "How I Made $2M" by Nicolas Darvas. He too bought stocks that were breaking out on unusual volume, but his entries were at the new high, not the pullback.

Some examples of my better trades are buying NTRI in March of 05, but I sold too soon in June of 05. I also bought PTC in in March of 05, sold it about four weeks later. I shorted MTH in Jun of 06, but that was based more on sector analysis of the housing market than by technical analysis.

I cut my losses short so I don't have a lot of worst case trades, although I took a huge loss in BKHM in April of 06 soon after I bought it when it gapped through my stop. There's no way to protect against a gap move like that except by not having too much of your account in one position, which I unfortuanately did at the time.

As of right now the only position I have is ZIXI which I bought on Nov 19 at 3.65.

I mostly use my own scan in TC2000 that looks for a 20% increase in 3 day volume twice in a row. I often catch stocks before they show up on everyone elses radar by seeing them with subtle increases before they really get going. The disadvantage of it is that you see a lot of illiquid stocks because a they often have subtle increases in volume.

 

[hughb]

Gary, here's the notes I made on NTRI, (the ticker was NSI and it traded on the Amex back when I was trading it).

2/8/2005 New 52 week high

I had just noticed that it made a new high, it did not appear in any of my scans on this date, however on the very NEXT day it did appear in my scan and I got a little excited about it.

On 2/25/05 I made my first buy. Notice how it had dipped from the 2/10 high. On 2/24/05 I was convinced it was breaking out from that dip, so I bought the next day.

On 2/28 I was stopped out for a loss. I don't remember where my stop was, but it was obviously too tight. And so I bought back into it again on 3/8/05. Now you will notice that it took a dip in the days right after this second buy, but I held on this time.

If kept making buys into it on the little dips it made up until 06/05/2005 when I was surprised to see that it appeared in my scan again. I wrote this:

WTF??? Rising stock again. I have moved my stop up to 12.50 this morning because I fear it may be topping out.

On 6/17/2005 I made this note

Sold at 13.45, doesn't seem to be moving anymore

One of the worst decisions of my life. It hadn't moved much for the last 9 or 10 days and I became impatient. I still think about the nice condo and car I could have bought with the profits if I had held on.

 

[TSGannGalt]

As much as I agree with Mark B.

I would like to warn that MB doesn't mean "cycle" in the sense of esoteric trading terms like Gann or Elliott.

MB, along with others like MJ or AC, is a master of technical "noise reduction" to expose a particular edge.

 

[Gary Fox]

Hello TSGannGalt,

I appreciate that.

As I had no experience with cycles, I did a brief review of some of the noted cycle folks - and really didn't think I'd find much of an edge.

Now, your comment puts it in another light. Can you expand on "noise reduction" a bit? Also, as my ignorance is boundless, who are MJ or AC?

TIA.

Gary

Quote from TSGannGalt:

As much as I agree with Mark B.

I would like to warn that MB doesn't mean "cycle" in the sense of esoteric trading terms like Gann or Elliott.

MB, along with others like MJ or AC, is a master of technical "noise reduction" to expose a particular edge.

 

[Gary Fox]

Merry Christmas everyone.

I have this sort of cryptic quote that I want to backtest as part of a setup. I would appreciate any input.

This person is an end of day swing trader. Holds are form 1 to multiple days. He buys weakness within strength and sells strength within weakness (meaning he uses a basic pullback method within an established trend). His entry is either a buy or sell stop. Volume requirement is high.

He said this about his setup:

“My entries are always the same, it's my exits that vary. My basic thesis is this: the best trades are the ones that are strong from the start- a powerful move right out of the gate increases the odds that you have a longer term winner on your hands.

So I use a simple volatility based filter in determining what to keep and what to kick out.”

If this were an individual end of day bar, do you suppose he’s describing a bar that does not go much lower than the open and has a close very near the high?

Or, perhaps it opens above the close of the previous day; or even the high of the previous day (a gap)? What da ya think?

Regarding the volatility – what is your best guess here. Today’s ATR is > ATR14? ATR20? ATR148*2? Etc. Or, a percent measure above the previous day’s close? high? Etc.

Hey – it’s Christmas. I’m bored waiting for my in-laws to get here with their darling little children.

GF