Yes, It is possible. Real Time Idea's for "This Market"

[08:51] <brandon> 08:51:06 BUY ALERT : SBUX above 22.95, stops under 22.50.
[08:51] <brandon> Daily trap is in place
[08:51] <brandon> weekly buy setup
[08:51] <brandon> I will make a chart of this one this afternoon
[08:51] <brandon> the biggest factor here is the trap
[08:51] <brandon> Traps occur when a stock yesterday opens at or near its HOD
[08:51] <brandon> closes at or near its LOD
[08:52] <brandon> and then in todays action takes out yesterdays highs
[08:52] <brandon> this will cause a great degree of panic on the part of many people

Brandon
 
Originally posted by Brandonf
Today produced one of the strongest trend days we have seen in some time. It was fairly obvious that this would occur before the market even opened. Here are a few pointers. First, when you see much larger than average gaps, there is a tendancy for them not to fill. Gaps which are 4 times larger (in percentage terms) than the average gap are very rare and "never" fill. When you have a gap that is 4 times greater in percentage terms than the average gap, you should NEVER fade that gap, you should always get on board at the first opportunity and go with it. This applies to indexes only, not individual shares.

Brandon,

Hi. This is my first post and it is a question that you posted 3 weeks ago. (just going thru the thread. joined ET today). What number do you use to establish the average range of the gap? I am not sure my question is clear so I will repeat it a different way. (it is not because I think you are light in the head) When you are determining if the gap is greater or lesser than 4 times the average, How many past gaps do you use to get your average?


Also, Trap Gaps almost never fill. Trap gaps occur when you have the prior days open at or near the days high, and the close at or near the days low, then on today's open you immediatly break yesterdays HIGH. This traps people, they don't have plans and at the VERY LEAST you will get strong short covering. The reverse is true for shorts. This idea also applies to individual stocks. Yesterdays range in the Nasdaq was also an NR7, and breakouts after NR7 days are "always" buyable.


On the trap gap: can these techniques be used for taking short term positions in a stock. I am not a day trader. My typical hold is about 12 market days.


Today we had a WR7 (widest of the last 7 ranges) day, and most generally the days following a WR7 are back and forth. Strong rallies are shortable, strong declines buyable. Extremes buyable or sellable depending what the extreme is (fade it). This is just a general rule, Toby Crabel has great research on both WR7 and NR7.


Could you give me directions on finding Crabel's research?

Thanks

bob
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What number do you use to establish the average range of the gap?

The number I use is the gap on the Nasdaq, I measure the gap as the distance between yeseterday's close and today's open. I have quite an extensive study on gaps (every single one in the Nasdaq over the last 5 years) and the data is drawn from that.

On the trap gap: can these techniques be used for taking short term positions in a stock. I am not a day trader. My typical hold is about 12 market days.

Yes, the trap is a pretty powerful pattern. If you are holding in a timeframe measured in weeks then I would look for them to occur on the weekly charts (very rare, but it does happen). For swingtraders this is a very good pattern such as you can see with Starbux (SBUX) over the last several days after its trap.

Could you give me directions on finding Crabel's research?

You can check on Amazon, but there appears to be quite a waiting list for it. I have seen it come up for sale from time to time on Ebay generally in the $500 + range. The basic idea is that volatility is an important factor in market studies and that it constracts and expands. After periods of constriction it will likely expand and thus breakout strategies are in order, after periods of expansion it will likely constrict and fading type strategies will be in vogue. We have a good bit of volatility research and data in the members section of our site, but what is posted there pretty much sums it up.

Regards,
Brandon
 
Kellogg Company (K) is one of the markets leading uptrending stocks. When traders look for buying opportunities we want to see uptrending stocks that have RESTED. This resting can occur by either experiencing profit taking (pullbacks) and by periods of accumulation (bases). Over the course of the last several weeks Kellog has traded in a sideways manner, which often gives a stock the resting opportunity it needs to move higher. With the current domestic and global economic situation remaining very uncertain defensive issues such as Kellogg are likely to continue to experience buying interest. Look for buying opportunities in K on trades above $37 with a stop placed under $36. Look for K to trade in the $39 to $41 area over the course of the next few weeks.

Brandon
 

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Charter One Financial (CF) is an uptrending stock making higher highs and lows. You can see on the chart that over the last several weeks the stock has traded in a range, trading ranges often represent resting periods after which a stock is able to resume its prior up move if it breaks out of the range. Look for buying opportunities in CF.

Brandon
 

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[10:10] {Brandon] 10:10:16 BUY ALERT : RNWK (potential swing) above $8.80 with stops under $8.55
[10:10] [Brandon] daily bullflag
[10:10] [Brandon] making a chart
 

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For every trade you enter you should have a plan, its the lifeblood of a trader. There are only two ways a position will stop out if you have a valid criteria to enter in the first place. First there was some sort of market change that effected the setup. There is nothing you can do about that, and unless it starts to happen with great consistancy its not something you can worry about. The next reason you can stop out, or just simply underperform, is by not following this plan. This is where traders go broke, even if they have a valid approach. If you are not following your plan, then there is some reason for this and you need to find out what it is and kill it before it kills your account.

Brandon
 
Far too many traders come into the market and have no plan at all, which would explain why most fail. I want to cover some critical aspects of a trading plan. Or, they think they have a plan, but its simply something written out that I want to make X dollars which is actually distracting, forcing you to focus on the wrong things.
I think the first part of your trading plan should address risk. The reason being that if you go broke you cant trade. So the first part of your plan should focus on how much you will risk on each trade, on each trade, each week, each month.

The next part of the plan should focus on which setups and markets you plan to trade. In what circumstance will you trade them? It should cover everything about the setup, how you will find it, when you will trade it, stop placement, trailing stop method, objective method, risk/reward criteria. Focus on finding the opportunities you identify.

You should have a plan for time managment. Trading takes a lot of time. There is a lot of homework. So plan on it. I spend 3 to 5 hours each night scanning, going over trades and gathering information.

Make sure you have invested in technology. You should have a computer with multiple monitors, a fast reliable internet connect *AND A BACKUP*, a broker and your office affairs in order.

Do not focus on making money. This is something that I see too much. When you focus on money, it distracts you. You should instead focus on finding and taking good trades, if you do that you wont be able to do anything but make money. Just have a plan and trade it.

Brandon
 
Originally posted by Brandonf
I was in Las Vegas over the weekend and on Monday for the Money Show. Talk about a dead city. It was Sinco De Mayo and the strip clubs where EMTPY. Totally dead, and the dancers said its been terrible for some time. The Casino's were the same story. With some of them sitting near 52 week highs, small shorts (IMHO) would be in order in this general area.

Brandon
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Man GURU's SUCK!!!! Some punk ass kid, obviously don't know what he is talking about! On May 8th shorting Casino stocks because NO ONE was in the damn casino's. No one was in the strip clubs, it was dead..but everyone was buying casino's likey its the next dot com. MBG, HET, PENN, ISLE, ALLY..the list goes on and on. Who in the hell says you cant find the right stocks to trade in this market? YOU CAN, you just gotta dig a bit deeper than everyone else.

Better stop patting myself on the back before I end up in the ER with a broken arm, but seriously I hope that my comments compelled some of you to look at shorting these. I also hope that no one takes as gospel "the trend is your friend stuff" because its not always the case. There is a case to be made for it, and Ive done too well trading trends to ever say you should fight them on a regular basis, but by combining technical and fundamental research Ive profited on too many tops and bottoms to say that trend trading is the only game in town.

Have a good day tomorrow, its likely to be very very sloppy.

Brandon
 
With my amazing system,you to could make money. Or even better, "Channeling Stocks.com bob".

However, much of this is interesting, Hope you were short the semis, bios, and Tyc today.

ertrader
 
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