Trading Strategies for Swing Trading and Daytrading

[ddefina]

Did a quick review of what the average price appreciation was for EMLX during October 2001, by doing the following:

Placing a Buy Stop at the high of the previous days 15-minute closing bar. On the event of a gap up, buying on the open. This is the move for the first 15 minutes only from entry to high. So where you exit is a matter of skill and judgement:

Average price appreciation: .64 cents
Number of days entered: 13 (54% of trading days)
Highest appreciation achieved: $1.69
Lowest appreciation achieved: $ .20

So knowing this information, you could devise a profit target of say .20 cents and place a sell limit order for .20 above entry and for last month possibly achieved $2.60 X 1000 shares = $2,600, or a profit of 10% for the month. You could also manually use stops and most likely increase this return.

 

[neo_hr]

This little "***" is giving me so much trouble... Doesnt fit anywhere in Tonys setup (havent read book yet so...) as I found in Stockjunkie.com and some examples of his also. Any oppinions?

It DOES categorize as Bottom fisher, 3 lower closes in a row but likes to gap a lot.... and besides I really cant find appropriate target. Not looking for a "do this and that, here and there" type of advice though.

Alex

 

[Magna]

ddefina,

Thanks for the EMLX example. Question tho, in general. Earlier you said:

If the stock is strong you will be filled (assuming no gap)...

and then later you said:

On the event of a gap up, buying on the open.

The first statement implied (?) avoiding the play on a gap up, but the second statement said you enter immediately on the gap up. Has your testing (and experience) found gap up plays to have a high rate of success with this setup. Of course, I am referring to gap ups beyond the high of the previous day's final 15min candle.

 

[Magna]

neo,

I took a look at your attachment of VSAT. On 11/2 it would have come up in the intraday scanner (assuming it met the other filtering criteria) because it was moving above the close of the previous day, and the stock had closed lower for 3 or more days. At that point you would have had to make a decision based on your experience and judgment (i.e., placement in relation to lower BB, etc.) as to whether you would jump on. If you decided to you could have placed a stop at the low of that day. If the stock reached a first target you might have scaled out some and/or moved your stop up to breakeven. Otherwise your stop would have remained where it was. In this particular case the stock reversed and your stop would have been hit.

This little "***" is giving me so much trouble... Doesnt fit anywhere in Tonys setup
Now if you were not talking about playing this on Friday but, instead, were looking to see if it might be playable on Monday the same criteria would apply. If it's price goes above the close, depending on other criteria happening at that time (i.e., market movement, sector movement, etc.) you might open a position.

It DOES categorize as Bottom fisher, 3 lower closes in a row but likes to gap a lot
If you are not successful with these gappers then you might consider skipping them and only playing stocks that don't gap as much.

besides I really cant find appropriate target.
I generally find targets to be somewhat arbitrary, as good arguments can often be made for a variety of points. For instance, in this case an initial target might be the high of 10/31. Another target might be approximately half the length of the extended candle on 10/30. Unfortunately, these things are often not that clear-cut so I ask myself, "Where would be a reasonable point that the stock, based on prior day(s) activity, would run into resistance".

 

[neo_hr]

THX Magna, appreciate it

 

[ddefina]

Originally posted by Magna
...
The first statement implied (?) avoiding the play on a gap up, but the second statement said you enter immediately on the gap up. Has your testing (and experience) found gap up plays to have a high rate of success with this setup. Of course, I am referring to gap ups beyond the high of the previous day's final 15min candle.

I always buy on a gap up if the stock rises above the open instead of drops below the open right away if the gap is under 4%. I sometimes short a gap if it drops, but not too often. I don't know what the percentage success is in real life though. I just was playing around with a possible strategy and buying on the open simplified the rules. Also, during all of October there were 5 gaps up with the lowest rising .28 from open and the highest $1.69 from open. The .28 day occurred on the 17th and quickly plummeted almost $2.00.

I was just pointing out that there seems to be a strong correlation between the breaking of S/R of the previous days bars, and future short term price appreciation in the current day. Also, with all the volume in the morning you could probably move some size playing that strategy. I'll try it out in November and let you know my track record.

 

[coops]

TonyOz - thanks, that link to the calculator worked fine - that's a strange one.............


ps "Interesting how there's 2400 views of this thread but only 4 or 5 contributions? Is everyone doing so well and guarding their secret trading system, or not doing well and not wanting to corrupt everyone else?" - as soon as I have a system that works i'll give you my 2cents.. boo hoo...

coops

 

[neo_hr]

Hey there all!

I was just wondering...could anyone direct me to a simple trend following setup (kinda more detailed then "enter uptrends on pullbacks )? I mean, Im trying to perfect Tonys counter-trend setups but Id also like to have something counter to it , to see the main differences and well, should I fail at theese in the next say 3 months Id try trend following .

THX all and good luck today!
Alex

 

[coops]

neo_hr

I'm also looking to follow the intraday trend - essentially following Alexander Elder's Triple Screening System from his "Trading for a Living" book. The book contains really good advice about what each of the popular indicators are useful for (and what they 're not). For instance, MACD and its Histogram would be a good trend indicator (as are good old moving averages), whereas Stochastics are a short term price entry/exit indicator.

Big Easy Investor (now Advanced Analyzer) has a nice slide show function - so you can sit back and get used to spotting nice "trenders". Have a look at a 6month daily chart of AZO.


coops

(ps I got the Oz calculator from Tony's new link in the original thread - thanks)

 

[candletrader]

Don't buy(short) into the trend... sell(cover) into it!