Registered User
Joined: 10/7/2004
Posts: 2,181
|
It might be helpful to some to start a thread here on finding and trading a safe bottom.
How successful traders find them.
How successful traders validate them.
How successful traders trade them.
Stop losses, etc.
It might make sense to also talk about common mistakes that are made; a few war stories, etc.
I'll start off by simply saying that I've learned to look for bottoms that are bottoming in an uptrending channel. I think (for me at least) that's the real key. And it's been a great boon to my trading to see a bigger (and positive) picture, then look for lows and bottoms within that picture.
I'm sure we'd all benefit from hearing some input here.
|
|
Registered User
Joined: 1/12/2006
Posts: 296
|
I don't know about the successful traders aspect - I would have left that word out. Besides, it is too subjective. I will assume the intent was position trading.
My input:
Determine initial buy setups on a daily time frame by whatever method one utilizes, and then fine tune your entry by going to a lower time frame (30 min or 60 min).
|
|
Registered User
Joined: 10/7/2004
Posts: 2,181
|
kokoda;
Good point. Thank you. Perhaps I should say "...traders that are achieving their goals..."
|
|
Registered User
Joined: 3/21/2006
Posts: 4,308
|
Here is my first contribution to what I think will be a classic thread (great idea TB)
When I am looking to find a good buy point in a bottoming stock, first I look to Volume. As a swing trader I am not looking for the stock to make a major turn-around, I am looking for an opertunity or a (bounce), somthing that I can make 4% - 10% profit in just a few days to a week.
Lets look at ANPI the very stock that (maybee) started this thread. On October 11th we had an anomaly or spike in volume. One week later it is up over 12%, and then back down again.. (A swing traders dream)
TRMM I mentioned this one on Friday (midday). It came up on one of my scans thursday night (I have constructed scans to look for anomalies in volume, in bottoming stocks).
This morning it gaped up..
Thats all for now, I am looking foward to reading other posts..
Apsll..
|
|
Registered User
Joined: 3/21/2006
Posts: 4,308
|
I feel that I need to elaborate on this a little more.
Going to ANPI October 11th again (the more I study What the indicators were showing back then, the more text book the small rise that developed looks..
At the time of the spike in volume, other indicators were showing us things as well..
TSV 26 was in a 5 day uptrend (even though BOP was negative every day before the volume anomaly)
MACD 19,35,3 Its 3 day moving average was steadely climing and on this day had reached the zero line.
It is very dificult to time these situations, but if you pay very close attention and use proper scaning, and Indicator interpretation technics, then you will have a much better chance to profit from these bottom bounces,,
|
|
Registered User
Joined: 1/12/2006
Posts: 296
|
I'll add another.
For position trading, I use an indicator with "fast" settings. I also use this indicator with its standard setting and also with slower settings. So, I have three "windows" to view. If A stock has spiked up appreciably in a short time frame (1 day - 3 days for example), I will use the "fast" setting crossover to determine when to exit. Generally, for "normal" price activity, I won't get out until a crossover takes place on the "slow" setting.
|
|
Registered User
Joined: 3/21/2006
Posts: 4,308
|
I hope that I do not appear ignorant, but I am not familiar with the terms that you speak of (Fast setting crossover), are these Intra day terms? If you could elaberate for me I would appreciate your help in this....
|
|
Registered User
Joined: 1/12/2006
Posts: 296
|
Many indicators such as RSI, Stochastics, MACD, Moving averages, etc., allow you to change the settings.
For example, stochastics has a D period and a K period. You can change these periods - the Standard setting may be 14,3, but I've seen where experienced traders use 17,4 and 39,3. How you change the data fields affects how fast/slow the indicator reacts to price changes. A "fast" setting indicator may get you in earlier for larger percentage gains, but it is also a double-edge sword where it can cause more exits (whipsaws).
|
|
Registered User
Joined: 1/28/2005
Posts: 6,049
|
I think fast means short time-period.
A 5 day moving average is "faster"
than a 30 day moving average.
Thanks
diceman
|
|
Registered User
Joined: 1/28/2005
Posts: 6,049
|
Its funny when I first saw this post I pictured a stock in my mind
like ANPI. Then tobydad stated:"I'll start off by simply saying
that I've learned to look for bottoms that are bottoming in an
uptrending channel."
It seems there can be different definitions to what a bottom
actually is. I am more in tobydads camp. In that I basically
consider "bottoms" reactions in a up trend. One of the problems
with a stock like ANPI is I cant tell if its at a bottom or if its
"resting" before it falls again.
Sometimes I use the methods described here:
http://www.worden.com/training/default.aspx?g=posts&t=17174
to "find" bottoms.
One of the things I like best is if I can see a cycle with my eyes.
A good recent example is: PCAR.
Its been making cycle lows about every month to month and
a half since June 06. By my eyes (I'm on a log scale so not
sure) it looks like about 63.50 may be another area to keep
an eye on for a cycle low.
One of the things I would recommend is that traders experiment
with settings. When you see a stock telling you something try
different settings to see if you can zero in on price targets
or time targets.
Lets say you always use 20 and 50 day mavs.If you change
lengths and "see" that a stock you are interested in is
always bouncing off the 14 day average. It can clue you
in to looking for buys there.
Always use the settings you are familiar with but when you
see a pattern forming in a stock. see if changing settings
will clue you in more to what's happening.
RSI, STOC, MACD, MAV and so on.
Thanks
diceman
|
|
Registered User
Joined: 1/28/2005
Posts: 6,049
|
Darn.
Looks like 63.51 was the low for
PCAR.
(missed by a penny)
Im gonna have to get some windex for
my crystal ball.
Thanks
diceman
|
|
Registered User
Joined: 1/12/2006
Posts: 296
|
For the markets themselves, volatility stands out as a key.
For specific stocks, combining dissimilar indicators enhances the validity of selections.
Double bottoms (even close ones), recognized support, recognizing wave patterns (A, B, C, or A thru E), rate of change acceleration (price, MA, etc.), consecutive closes above opens as prices turn up after a downtrend, volume increase(s) for the 1st two positive bars, and of course the all important 50 day SMA factor (this may be the most important - check out the NASDAQ in early 2003 after the "bear").
???????????????
|
|
 Gold Customer
Joined: 11/22/2006
Posts: 100
|
Trainers,
Can I get a live link for the one that Diceman posted below. I would be greatful for the help.
Thanks.
william
QUOTE (diceman) Its funny when I first saw this post I pictured a stock in my mind
like ANPI. Then tobydad stated:"I'll start off by simply saying
that I've learned to look for bottoms that are bottoming in an
uptrending channel."
It seems there can be different definitions to what a bottom
actually is. I am more in tobydads camp. In that I basically
consider "bottoms" reactions in a up trend. One of the problems
with a stock like ANPI is I cant tell if its at a bottom or if its
"resting" before it falls again.
Sometimes I use the methods described here:
http://www.worden.com/training/default.aspx?g=posts&t=17174
to "find" bottoms.
One of the things I like best is if I can see a cycle with my eyes.
A good recent example is: PCAR.
Its been making cycle lows about every month to month and
a half since June 06. By my eyes (I'm on a log scale so not
sure) it looks like about 63.50 may be another area to keep
an eye on for a cycle low.
One of the things I would recommend is that traders experiment
with settings. When you see a stock telling you something try
different settings to see if you can zero in on price targets
or time targets.
Lets say you always use 20 and 50 day mavs.If you change
lengths and "see" that a stock you are interested in is
always bouncing off the 14 day average. It can clue you
in to looking for buys there.
Always use the settings you are familiar with but when you
see a pattern forming in a stock. see if changing settings
will clue you in more to what's happening.
RSI, STOC, MACD, MAV and so on.
Thanks
diceman
|
|
Worden Trainer
Joined: 10/7/2004
Posts: 65,138
|
william4567,
I think you want the good approaches for end of day trading? topic.
-Bruce
Personal Criteria Formulas
TC2000 Support Articles
|
|
Gold Customer
Joined: 11/22/2006
Posts: 100
|
Thanks Bruce. You always come through with the answer.
william
|
|
Worden Trainer
Joined: 10/7/2004
Posts: 65,138
|
william4567,
You're welcome.
-Bruce
Personal Criteria Formulas
TC2000 Support Articles
|
|
|
Guest-1 |