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great new pattern
- Thread starter praetorian2
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jeffrey, none of those fit the pattern b/c they were missing the volume serge. A better example is mrx which i bought 1000 of @39.20 today. I already sold for 2 pts, but may relong again. You need the volume serge.
I am very willing to continue posting trades that match this pattern if you want and I'll even post my entry and exit points in real time if not too buisy, but I think we should make some rules on what types of stocks are to be posted. I don't want to be seen as a hype artist. Instead I hope to show people this pattern and how profitable I've found it. I have had no problems with posting RITA,TTPA and BVEW for 2 reasons. Firstly, they were liquid enough that even 50k of buyers from this board wouldn't have moved any of them. Secondly, I was 99.9% sure of them working. I think the minimum move was by ttpa which only increased 40% in the 3 days following posting. If I am to post in real time, I'd like to know what you want to see? Do you want to see my entries and exits in real time as well, or just the chart pattern ticker? Also, what do you think is the minimum avg. volume to qualify. I would like it to be at least 1 mil at the time of the trade. I usually take 5-20 of these a week now, but only maybe 1 in 30 is liquid enough to post I think. But if you want, I'm also willing to post what I did at the end of the day after trading is over so you can see the patterns I traded that day, and how I traded them, but they wouldn't "move" or anything as a result of my posting. Can those people who are gonna continue watching this board, just give some input as to what they want to see.
Praetorian2 - I still read all of your posts. Simply because I'm interested, how this pattern works out .
Since I don't have the time for daytrading right now
(I'm very busy with an important project), I don't post specific stocks appearing on my scans.
For what concerns price / volume :
As you know from my previous posts, I use currently following criteria in my setup :
Previous close > 10$
Avg. volume 30 days >= 100.000 /day
This means, the stock is generating at least 1 Mio USD trading volume/day on average.
For the day when the pattern signals, I want to see at least a volume surge of 100% compared to this avg. Volume. The more, the better !
It is also necessary, that the trading range is larger than the previous day and that the stock closes at least 1% above the close of the previous day and above it's open for the trading day when the pattern was confirmed.
My personal interpretation of this patterns is :
the larger daily range stands for the final, aggressive battle between bulls & bears , after a longer period of declining stockprice.
If the bulls win at the end of the day, it prepares the path for further increase of the stock's price within the next couple of days. The significant increase in volume signals new interest in the stock.
I'm not daytrading / scalping these patterns ( although this can be profitable, as you proofed already ).
I'm looking for positiontrades with high R:R ratio and might even use call-options instead of an outright purchase of the stock, thereby determining my risk-level automatically - it's the premium I paid for the calls.
Since the pattern is screened on EOD data , entry would be only the next trading day.
I use also Tradeprospector's S&R calculations for determining the best entry price for the next trading day and to manage stops.
I can not follow the markets throughout the day currently, so I may not be able to pick exactly this best price level.
But as already said, I'm looking for multiday trades with a higher profit.
If the stock's price/volume action qualifies for such a multiday trade, I don't care whether I might miss the optimal entry-level by 1/2 a point or so. In this case, I try to establish my position in the final 30 minutes before the close, in order to avoid bad surprises caused by mutual-fund orders and professional shortsellers
( For those new to the thread : remember, this pattern is for long trades only ).
I could imagine, that a similar pattern, but screened on weekly data rather than daily or 60minute data, can signal a major shift in investors perceptions towards a stock or a sector / index - offering even greater profit-opportunities, but on a somewhat longer time-frame for the trade ( may 1 or more months ).
regards &
Since I don't have the time for daytrading right now
(I'm very busy with an important project), I don't post specific stocks appearing on my scans.
For what concerns price / volume :
As you know from my previous posts, I use currently following criteria in my setup :
Previous close > 10$
Avg. volume 30 days >= 100.000 /day
This means, the stock is generating at least 1 Mio USD trading volume/day on average.
For the day when the pattern signals, I want to see at least a volume surge of 100% compared to this avg. Volume. The more, the better !
It is also necessary, that the trading range is larger than the previous day and that the stock closes at least 1% above the close of the previous day and above it's open for the trading day when the pattern was confirmed.
My personal interpretation of this patterns is :
the larger daily range stands for the final, aggressive battle between bulls & bears , after a longer period of declining stockprice.
If the bulls win at the end of the day, it prepares the path for further increase of the stock's price within the next couple of days. The significant increase in volume signals new interest in the stock.
I'm not daytrading / scalping these patterns ( although this can be profitable, as you proofed already ).
I'm looking for positiontrades with high R:R ratio and might even use call-options instead of an outright purchase of the stock, thereby determining my risk-level automatically - it's the premium I paid for the calls.
Since the pattern is screened on EOD data , entry would be only the next trading day.
I use also Tradeprospector's S&R calculations for determining the best entry price for the next trading day and to manage stops.
I can not follow the markets throughout the day currently, so I may not be able to pick exactly this best price level.
But as already said, I'm looking for multiday trades with a higher profit.
If the stock's price/volume action qualifies for such a multiday trade, I don't care whether I might miss the optimal entry-level by 1/2 a point or so. In this case, I try to establish my position in the final 30 minutes before the close, in order to avoid bad surprises caused by mutual-fund orders and professional shortsellers
( For those new to the thread : remember, this pattern is for long trades only ).
I could imagine, that a similar pattern, but screened on weekly data rather than daily or 60minute data, can signal a major shift in investors perceptions towards a stock or a sector / index - offering even greater profit-opportunities, but on a somewhat longer time-frame for the trade ( may 1 or more months ).
regards &
praetorian2
sure would I prefer to follow Your trades in realtime. I think it would give a better learning effect. but I also think, that You should do it, the way You feel comfortable with. maybe if You post the eod, than You will be more concentrated on Your trades.
in the case of MRX, You caught the entry really almost at low of the day. how comes?
I've read this thread from the beginning, again, and I could not find the way, how You do the screening to find Your trading candidates. and with which screening software?
could You tell us more or do I ask to much?
to Jeffrey, You've said that his examples dont fit the pattern, because they were missing the volume serge.
what do You mean with "volume serge"? I know the translation for it, but I dont understand the meaning, or at least how You use it.
here I have to say, that the german language is my mother language.
praetorian2, thanx again for giving us a view in Your interesting trading pattern.
best of luck
eli
sure would I prefer to follow Your trades in realtime. I think it would give a better learning effect. but I also think, that You should do it, the way You feel comfortable with. maybe if You post the eod, than You will be more concentrated on Your trades.
in the case of MRX, You caught the entry really almost at low of the day. how comes?
I've read this thread from the beginning, again, and I could not find the way, how You do the screening to find Your trading candidates. and with which screening software?
could You tell us more or do I ask to much?
to Jeffrey, You've said that his examples dont fit the pattern, because they were missing the volume serge.
what do You mean with "volume serge"? I know the translation for it, but I dont understand the meaning, or at least how You use it.
here I have to say, that the german language is my mother language.
praetorian2, thanx again for giving us a view in Your interesting trading pattern.
best of luck
eli
Praetorian2
first of all I would like to thank you for your efforts to share your pattern with us. It would be great for me if you could show us in real time not only your entries and exits but also your stops and targets for the stocks. Could you also post the stocks that you scanned for the next trading day and tell us the entry?
first of all I would like to thank you for your efforts to share your pattern with us. It would be great for me if you could show us in real time not only your entries and exits but also your stops and targets for the stocks. Could you also post the stocks that you scanned for the next trading day and tell us the entry?
Look for a serge in volume, that shows the "blowoff" bottom so to speak. That's when the last bulls throw in the towel. On mrx, you can see a large block down there, so I bought then. I just scan every hour for the most down stocks, and those with the largest increases in volume. I really can't post my setups for today, b/c almost all are under 300k daily average, and I intend to take 1-3k of each, so I don't want to incur additional slippage, or bully the stock by using this board. But i'll post my trades tonight (if I even take any, dow futs are -301 now)
praetorian & privateer
Interesting thread you have here; kind of like a joint system development. I have come recently to this thread. I personally think you have a tradeable idea here.
I tend to be more of a swing trader than an intraday trader, so it is that aspect which i find intriguing in your discussion.
Obviously you are only looking at the equities markets.
Obvious too, is that this is a counter trend system.
I personally think that the set-up you are developing is still in the intuitive phase -- that is you have not precisely defined it. It has some elements which could be defined by both price and volume parameters. Also, time may be a factor here -- in order to define the trend and avoid "news shocks" affecting price and volume.
The trigger that pulls you into the trade, is also intuitive. Seems to me like entry, some percentange of the ATR above previous close, would suffice. It also appears a rentry plan, if stopped out, could increase the profitability of this system.
And then the real money maker in any system: Exit selection.
The first exit is the risk control or disaster stop. Something like an intial stop some percentange of the ATR below the previous close.
Next, in my way of thinking, what is needed are clearly defined profit taking/protecting exit strategies. Some form of trailing stops, or trend reversal exits.
In short, you have all the makings of a very good system and trading plan here. I am a bit "anal" about trading plans, as you can probably tell. I mean no offense -- in fact, i think i will see if i can develop a testable system from your work here. I could use a good counter trend system.
regards/greg
Interesting thread you have here; kind of like a joint system development. I have come recently to this thread. I personally think you have a tradeable idea here.
I tend to be more of a swing trader than an intraday trader, so it is that aspect which i find intriguing in your discussion.
Obviously you are only looking at the equities markets.
Obvious too, is that this is a counter trend system.
I personally think that the set-up you are developing is still in the intuitive phase -- that is you have not precisely defined it. It has some elements which could be defined by both price and volume parameters. Also, time may be a factor here -- in order to define the trend and avoid "news shocks" affecting price and volume.
The trigger that pulls you into the trade, is also intuitive. Seems to me like entry, some percentange of the ATR above previous close, would suffice. It also appears a rentry plan, if stopped out, could increase the profitability of this system.
And then the real money maker in any system: Exit selection.
The first exit is the risk control or disaster stop. Something like an intial stop some percentange of the ATR below the previous close.
Next, in my way of thinking, what is needed are clearly defined profit taking/protecting exit strategies. Some form of trailing stops, or trend reversal exits.
In short, you have all the makings of a very good system and trading plan here. I am a bit "anal" about trading plans, as you can probably tell. I mean no offense -- in fact, i think i will see if i can develop a testable system from your work here. I could use a good counter trend system.
regards/greg
Hi gh1 - nice that you find our thread helpful. You made some good points. Trade management is the money-maker here.
I think, we have defined the pattern we are looking for in great detail on one of the first pages of this thread.
For what concerns entries, profit-targets, exits and trailing stops :
I don't know whether you are familiar with TradeProspector
http://www.3mtrading.com
It provides all the necessary tools for defining these levels on daily base.It includes major S&R levels, Fibonacci retracements, best upper / lower stops etc. pp.
Very precise.
I referred to this softw. in my post above only briefly. Many people here know about it ( at least I think so ;-)) )
That's why I didn't went into details.
However, another money making point is position-size. As from my current studies, this pattern, if applied accurately, ( EOD version ) has had a quite high success-rate. Many of the triggered signals would have lead to a reasonable profit on the longside in the following 1 - 5 days ( that's what I was looking for as a positiontrader).
Of course, a few weeks of studies don't make an unbeatable pattern, but I guess, it's still better than random entry. There's no failsafe reversal pattern out there I would know of ( otherwise, I wouldn't post here , haha ).
Coming back to position size :
Since this pattern triggers very briefly after a major bottom was hit, the downside risk is rather limited ( only technically speaking, of course ).
As I mentioned earlier, the pattern doesn't appear too often (on my EOD scans ). So as a positiontrader, you might have much less signals to trade as with other patterns or indicator signals.
Your stop would be somewhere slightly below the close of the previous day - which would also define the breakpoint for going short, if there's no follow through in volume and price appreciation.
Since your logical stop would be very near to your entry point, you can afford trading fewer, but larger positions ( or using more option contracts ).
Anyway, I am looking forward to your suggestions with very much interest.
I think, we have defined the pattern we are looking for in great detail on one of the first pages of this thread.
For what concerns entries, profit-targets, exits and trailing stops :
I don't know whether you are familiar with TradeProspector
http://www.3mtrading.com
It provides all the necessary tools for defining these levels on daily base.It includes major S&R levels, Fibonacci retracements, best upper / lower stops etc. pp.
Very precise.
I referred to this softw. in my post above only briefly. Many people here know about it ( at least I think so ;-)) )
That's why I didn't went into details.
However, another money making point is position-size. As from my current studies, this pattern, if applied accurately, ( EOD version ) has had a quite high success-rate. Many of the triggered signals would have lead to a reasonable profit on the longside in the following 1 - 5 days ( that's what I was looking for as a positiontrader).
Of course, a few weeks of studies don't make an unbeatable pattern, but I guess, it's still better than random entry. There's no failsafe reversal pattern out there I would know of ( otherwise, I wouldn't post here , haha ).
Coming back to position size :
Since this pattern triggers very briefly after a major bottom was hit, the downside risk is rather limited ( only technically speaking, of course ).
As I mentioned earlier, the pattern doesn't appear too often (on my EOD scans ). So as a positiontrader, you might have much less signals to trade as with other patterns or indicator signals.
Your stop would be somewhere slightly below the close of the previous day - which would also define the breakpoint for going short, if there's no follow through in volume and price appreciation.
Since your logical stop would be very near to your entry point, you can afford trading fewer, but larger positions ( or using more option contracts ).
Anyway, I am looking forward to your suggestions with very much interest.
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