Margo's Swing Journal

M

margo_trader

Hello,

A friend recently told me about this site and I've been following it the past couple of weeks, and I've noticed the interest a lot of people have in the journal threads. I've also noticed that most don't offer much in the way of methods.

I'm not starting this journal to prove anything to myself or to anyone else. I've been trading full time for about 3 years, and I've been fortunate to have been successful. I take a swing approach and will be offering to anyone interested my personal methods. They are very simple, they are often times boring, and they've been used since the stock market began. Sometimes, I do nothing. Sometimes, I do a lot. It all depends on the charts. I don't read news. I don't watch TV. I don't listen to analyst. I follow the charts: 60 minute, daily, and weekly of the major indices......daily and weekly for individual charts.

I'm going to provide charts I'm watching before they trigger - usually the night before. I'm not going to do daily commentary, and I'm not going to have the time to answer a lot of questons. Since it's late, I'm not going to go into my methods nor am I going to post many on my watch list for tomorrow. I'll post more this weekend when I have the time and if any of the members here have interest in my doing so.
 
I am planning to establish a pilot short in this anywhere between $62.50 - $63.00. The base from August to now does not suggest a breakout will last. Since it has risk down to the high 40s, I will take a smaller position.
 

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Similar to SYK. Take a peek at the big hole in the lower 20s. How many gaps have you seen go unfilled in this bear? I'm going to short this as close to $31.50 as I can get it.
 

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Head and Shoulder pattern. I've drawn in a wedge across the recent highs and lows. I will take a low risk short as close to the top of the wedge as I can. The level appears to be around $95.00. Unlike the others, I'm not going to give this much room to fail if it affords me an entry. I'll place my stop at $95.25 if I go in. It has risk down to the $75.00 area over the intermediate term.
 

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This is a weekly chart and a tough stock to trade. I'm going to short at the upper wedge line.....$69.50 - $70.00 area. I'll cover for a loss on a move over $70.00. It has risk to the lower wedge in the $55.00 area. Simply, I'll risk a 1/2 with reward potential of 15 points.
 

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This has already broken down from a massive head and shoulders pattern. As is the norm, these will often drift back up to or just over the prior support level. If it does, I will take a short position as close to the 50 MA as I can. The pattern measures to the high teens.
 

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Personally.. I think some of your choices are a bit too agressive. I would not fade the market right now, especially stocks near 52 week highs. I would rather be buying their pullbacks.

When the broader markets have underwent a major sell off and are trading near their lower bands.. the risk to reward in fading strong stocks diminishes.

I will not initiate shorts now.. in the near term the easy $ has already been made. I'd rather let the markets rally and short the weakest one's on a bounce to key resistance.



anyhow,

good luck

--MIKE
 
Margo

Nice short setups, but I think your risk management needs to be slightly improved.

For example, you're going to place 50c stop for ERTS vs. $15 profit gain. 50c is too little in my opinion, cause it's far less than ERTS daily ATR; Your 50c stop will be taken out by our dearest friends MMs.
I would enter on close with ATR stop which is $2.41 as of Oct.11

I'll be looking forward for your coming plays :)
 
The only setup from Friday that hit an actionable level was SYK. I took a short position near the highs ($62.80 to be exact) and covered 1/2 of the position in the afternoon. I've reset the stop at $63.05 so it's a free trade from here short of a major gap up.
 

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The setups posted last Friday are still valid as far as I'm concerned, and I don't intend to update them unless they setup into something different than they are now.

I will be looking to short this at the top of the wedge. The holes in the chart doesn't suggest a strong move up is likely longer term. This is a long term setup so I'll be taking a smaller position.
 

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