New version 17 available now


Download software Tutorial videos
Subscription & data-feed pricing Class schedule


New account application Trading resources
Margin rates Stock & option commissions

Welcome Guest, please sign in to participate in a discussion. Search | Active Topics |

Tomy21 The path to better trade management. Rate this Topic:
Previous Topic · Next Topic Watch this topic · Print this topic ·
scottnlena
Posted : Wednesday, July 18, 2007 1:07:57 PM

Registered User
Joined: 4/18/2005
Posts: 4,090
Well so far my simple aproach is still performing well for me. However i need to work on maximizing my trades. I've built a nice collection of "premature exits" in my "exit notes later" column.

Most recently NEM I bought on 7/13 @ $41.58 and Exited on 7/117 @ $40.85. My notes aside from acceptable indicator placement reverence teh volume leading price move of 7/12. Now Martha advised agians entering so soon after what she calls an "over extended volume pattern" But I've been watching a few of these and i disagree with that as a flat statement. I also made note of several positive divergences. So after the whick of 7/13 and the black body on 7/14 even though my stop was considerably lower it looked like followthrough to me on the downside considering that price was near the upper limit of a downward trend line. Also I considered that the gap of 7/6 may want to fill before moving on. I suspected and hoped for an upside breakout. I know intelectually in momentum type of trading there is zero room for holding and hopeing. Psychologicaly however that line can be blury... for me at least. How much room is enough wiggleroom and how much time before the anticipated move needs to go by before cutting what looks to be a loss short (capital preservation) and sticking to your plan is the best route. Today on a noteable down day so far it is at $42.19 ... which would have been proffitable at least to the point of being the inverse amount I took in a loss.

However GHL I bought on 7/13 for 67.47 and sold on 7/16 for 67.70. tiny proffit. I sold it becasue it was looking weaker and I didn't get the energy I anticipated and other orders triggered and I wasn't comfortable being in margine in current market location. That is down 4 points now... so I excaped that with the skin of my teeth. I've had a few of these.

In general I have more of the premature exits than close shaves but those close sahves would have significanly increased my loosing amount average per trade. I haven't done the math but I suspect it would land me where i am now in terms of proffit average...but maybee fewer trades. A few of my losses would have been bigger by virtue of hitting my stops (or gapping over them)that I moved up to minimilize losses or exit from weakness or lack of strength.... but many of my tiny and moderate gains would be bigger....

What I need is to better controll my emotions when in a trade and do better analysis prior to entry. Or at least consider probable price movements as it reaches the target. I know that as a flat rule my methodology leads me to good stuff... but managing that stuff needs work. I'm still moving ahead and plodding along. BUT In current market conditions it's gonna take a while for the money to really start to roll in. that is one reason I consider Options so heavily ... it will encourage me to hold longer.

As of now i'm in GROW and pretty happy with it... today irritates but it's only one day and it will probably create a good opportunity to increase my stake.
MED.. not worried yet and encouraged by the inverted hammers.
SGMS ... almost dumped this one with NEM but it seems to be recovering so I'm glad I didn't so far.
And IAAC...this jsut turned back to proffit for me.. as it geets closer to the trend line it apears to want to climb.... I expect an upside break soon.
Apsll
Posted : Wednesday, July 18, 2007 2:39:54 PM

Registered User
Joined: 3/21/2006
Posts: 4,308
Scott, I am not sure if you are asking a question of me or just sharing your recent trades?

The only one I like from above is IAAC.

It is a shame that you sold NEM right before todays big gain..

I do think on MED that you entered to early.

You played GHL right (Hanging man)

scottnlena
Posted : Wednesday, July 18, 2007 5:24:33 PM

Registered User
Joined: 4/18/2005
Posts: 4,090
I guess just more curious about your thoughts on improving my trade management. You went through a few of my trades previously and mentioned wanting to look at a few more.

Reg. NEM.. yea but You can't wast too much time on shoulda coulda woulda.

SGMS made a huge gain today. I may take it tomorrow morning. It looks like we are seeing a tad of momentum during the summer market... I thought for shure that today would have been down. I even opened ENER to minimise drawdown as I have decided to hold the above for the next few days. I closed it shortly after entering because I convinced myself that an intra day bounce was unfolding... but truethfully I fumbled the trade.. I only made a few $ on it, reopened it and look a smaller loss. However between SGMS and IAAC I was signifficantly up for the day.

Yes I know your feeling on MED. I just figured I'd try it here. I'll probably add to the position if it breaks out.
Apsll
Posted : Wednesday, July 18, 2007 5:48:59 PM

Registered User
Joined: 3/21/2006
Posts: 4,308
Well now you have offically asked me Scott, so I am bound to give you my thoughts. First off I consider you a good trading friend, we have a bond (Techni trader). But I feel that I would be doing you a dis-service by not being honest with you.

Your strength lies in your chart reading abilities. I have always been impressed with your ability to spot a nice bottoming stock. Now that you have created the TSV system your finanacial future is secure once you can master the trade. It is your entry skills that are draging you down I believe. After analyzing your trades I would have to say that is where you need to center your focus.

I belive that you should start out by limiting your self to haveing no more than three open trades at any given time (no shorting and no options). You should only trade the $6.00 to $17.00 dollar range. this will give you a chance to buy more shares and provide higher profits. You should focus only on these three stocks.

Before you trade at all you need to learn some good entry analysis skills (not just from me) but I will help you if you want.

I have looked at most of your trades and I can see your problems. Keep in mind that I am not attempting to pass myself off as a trading guru, I can only offer to share with you the extend of my very limitted knowledge and some experience with success.

Let me know if you still want my help.

Your friend.

Tommy21.
scottnlena
Posted : Wednesday, July 18, 2007 6:28:46 PM

Registered User
Joined: 4/18/2005
Posts: 4,090
"It is your entry skills that are draging you down I believe" . . . Yup!

Of course I'm alwayse open to your suggestions.

As I've said before I think right now i'm most comfortable with a momentum aproach to the market simply becasue IMO (which dosent count for much)we need more consolidation or a correction here to help strengthen further moves up. that said I've been seeing allot of financial "stuff" stocks come through my scan particularily asset management. So for now I'm comfortable with GROW.

had a really nice day in the market today.. so I figured it was a good day to open goodies brought by mother in law. I've been living on Russian chocolate the last few weeks (mother in law lives in Moscow) but tonight it's caviar and charts baby! I'd say caviar, vodka and charts but the vodka and charts don't go that well togeather if I want the continued sucess. Perhaps in a few years i'll be able to upgrade from Sevruga in the black caviar, but the red is alwayse good.
jayrama
Posted : Wednesday, July 18, 2007 10:50:24 PM
Registered User
Joined: 4/25/2007
Posts: 91
tommy21, I am interested and following this thread. Would like your lessons on "good entry analysis". Thanks in advance. Thanks Scott for sharing your trades. Jay
diceman
Posted : Thursday, July 19, 2007 1:33:23 AM
Gold Customer Gold Customer

Joined: 1/28/2005
Posts: 5,942
You should also have a fixed set of entry/exit rules
to take emotion "off the table".

I could be wrong but it seems as if you are letting:
news, pre-market, overnight trading and intra-day
impact your trading decisions.

Remember that "premature exits" is not letting the
stock tell you when its done.
(I'm smarter than the market. I will get out now)


Thanks
diceman



Apsll
Posted : Thursday, July 19, 2007 9:43:06 AM

Registered User
Joined: 3/21/2006
Posts: 4,308
Lets get started then. Keep in mind I am only giving you my insights and opinions, they are not intended to be facts.

To Jayrama, and any others that might have an interest in this thread, I will be directing my comments to Scott, as he was the one that initiated this dialog.

I will start out by posting two charts. The first will be a recent trade that you made that I feel was a bad choice. The second will be a mock trade or trading lesson of a stock that I think demonstrates a good entry (maybe) coming soon.

First: GHL. Scroll back to the day you bought it 7/13 notice how close you are to resistance from Oct/Nov and June/July. Also notice the week volume levels, compared to the previous rallies. (You always say that you buy in anticipation of these things improving). You cannot buy stocks that way. Price did not push through the resistance, it bounced off and down. Volume did not surge, and you lost money on this trade. You should add an amendment to your TSV system. (Do not consider this choppy action in the TSV) – crossing up and down through the zero line this many times in a short period makes each crossing less meaningful. You should look for TSV that is below zero and building momentum to make a solid thrust through the zero line. (In my second chart I will show this). Lastly there is a divergence in TSV between the late June peak and the early June peak.

When entering a stock you must put the odds in your favor. That means looking at it from all angles. Where is the next resistance level, is there a support level near by that I can use for a good stop loss. What are my indicators telling me? What is my risk vs reward?

Here is the chart for GHL -


Apsll
Posted : Thursday, July 19, 2007 10:40:40 AM

Registered User
Joined: 3/21/2006
Posts: 4,308
Second: I am going to use BLUE as an example here. It does not fall into the price range that I mentioned earlier in the thread, but for the sake of my analysis we will use this ticker symbol.

On zoom 5 in the middle window plot BOP, and a 26-day TSV. In the bottom window plot Volume bars and OBV with a 30 day sma. Notice that we have a consolidation on what appears to be a bottom (Stochastics is confirming this). Look at TSV and how it is building momentum towards the zero line. OBV is climbing and just crossed the 30 day sma. These two indicators tell us that buying pressure is increasing even though price is not increasing. Now lets look for any resistance near by. You will see that there is resistance at around $1.35 so this tells us that we do not want to buy this stock unless price can break through that level. Now if I do buy above $1.35 where is the nearest support level to place my stop. The low price of this formation was at $1.25 so if price drops below this support then you want to sell right away (this would be a 7% loss, very low risk). The next resistance after $1.35 is at $1.60. If you can sell at that level then you will profit 18%.

Now you have answered all of your questions about risk vs reward, resistance and support, and indicators (you would want to use more than the two indicators that I used) but this is just an example. So now you would wait until your conditions are all met for this stock and then you would enter above $1.35 and also when TSV crosses the zero line.

Here is the chart for BLUE. I will follow up with some more insights soon I have some work to do on my own research.
scottnlena
Posted : Thursday, July 19, 2007 12:41:27 PM

Registered User
Joined: 4/18/2005
Posts: 4,090
I just wrote a detailed response that got dropped. I forgot to copy it to my clipboard. Thanks tomy for your analysis and input, looking foreward to reading more.

In a nut shell GHL was a proffit... but a near miss. I was shooting for momentum that didn't show up. I exited on the dragon somewhere in the tail. also becasue I had other orders trigger and didn't want to be in margin so I killed it. thanks for your analytics there.

BLUE ... yes i'm aware of entering on breakouts. On ocasion I will try to enter a consolidating stock ner the bottom range of it's consolidation. I havn't decided if it's greed, or lowering my risk. Probably greed. This chart dosent interest me for some reason .. i'd have given it a miss. I get enough oportunities in stock where TSV and MS both make thier important moves that I don't need to go on super searches anymore. It's verry important that TSV and MS be right for my system.

Just closed SGMS ... happy with the gains, and more than two points in two days near a consolidation resistance and i'll take it, maybee later i'll get back in but I wanna see how it deals with the resistance. SGMS was buy 7/13 $36.06 sold 7/19 $37.85 so almost two points, close enough. This is the kind of trade I like.

Also I Just entered DISH, my thinking:
Joint signal came with yesterdays nice engulfing. Main trends are up wit a short term correction. From the begining of the month fwd green vol is predominantly what touches or crosses the 15 ma I use with vol. my rsi 15,15 looks like it wants to cross up through rsi 75,75. no glaring divergences any where... most indicators confirming price... which is good. Something minorly negatie in TSV but that might have been resolved in the recent price drop.

My three moving average philosophy calls this a prime short candidate in that 20ma < 50ma and price is between the two BUT i've not done well at shorting lately so it's either a rising market or I need to revisit my shorting skills. I see the down trend that they point out as "Fresh" and there for suspect. given Stochastics, and price rate of change 24 which crossed up through its 30 day moving averg earlier this month and seems to be holding I felt like the upside was the way to go with this. Also Macd/H gave a long side buy signal at the begining of the month... But price hasn't realy gone any where since then... this seems to be the first bit of follow through on that since then. Possibly bad news but this look pretty good to me. I really like the engulfing in this consolidation right here.

I see a tad of resistnace aroung $46.28 but I don't expect it to hold... well see if and when it gets there... I think a realistic target could be $48.60 or higher.
Apsll
Posted : Thursday, July 19, 2007 12:59:25 PM

Registered User
Joined: 3/21/2006
Posts: 4,308
Just my opinion on DISH but again I think you made a pre-mature entry. Volume is to low and it looks like it is bouncing back off the resistance from 7/7 to 7/15. Again listed in your reasons to buy are a lot of if's and maybe's. I prefer to wait for a little more confirmation.

Good luck to you though...
scottnlena
Posted : Thursday, July 19, 2007 2:18:54 PM

Registered User
Joined: 4/18/2005
Posts: 4,090
Really? But we don't ever realy know what tomorrow brings? volume was good I thought on the day of the signal for DISH.

IN what way is it premature?
Apsll
Posted : Thursday, July 19, 2007 3:06:14 PM

Registered User
Joined: 3/21/2006
Posts: 4,308
"But we don't ever realy know what tomorrow brings?" You are right about that. Which is why the more conditions that are in your favor the better.

Take a look at the following chart. It shows the contradiction between price and volume. Plot a 20 day LR line on both. and you will see. Then keep zooming out to zoom 1 and you will see what I mean about the volume.

See the trend line I have showing the resistance level that todays high bounced off. I would have waited for price to break above that level first. The problem is that there is more resistance at $46.50

The best way to profit from this is to buy 1000 shares or more (out of your range) at $45.30 (above the current resistance) and sell at the next resistance level as stated above $46.50 for a profit of $1,200.00

Remember Scott that I am only giving you my opinions based on my experience. You could hold this one and make a killing on it and prove me wrong. Who knows?

Apsll
Posted : Thursday, July 19, 2007 3:14:09 PM

Registered User
Joined: 3/21/2006
Posts: 4,308
One last thing Scott, please do not get offended by my comments, they are not meant in any way to be confrontational. I am only trying to be as much help to you as possible and will stop any time you ask me to..
laphill
Posted : Thursday, July 19, 2007 4:08:06 PM
Registered User
Joined: 12/7/2004
Posts: 393
Very good advise Tommy. You might look at CDE, even tho it's trading below $6.
Apsll
Posted : Thursday, July 19, 2007 4:31:54 PM

Registered User
Joined: 3/21/2006
Posts: 4,308
Laphill, this looks like a good buy above the resistance at $4.45 Notice how it tried to break that level in early April and failed. TSV is even higher now then it was then.

Draw a trend line conecting the high of April 2006 and December 2006 and you will see that price is now above that. Volume has tapered off a bit in the last couple of weeks but I think that when resistance is breached on break-out volume you will have a winner.

(IMO)
scottnlena
Posted : Thursday, July 19, 2007 5:37:26 PM

Registered User
Joined: 4/18/2005
Posts: 4,090
Tomy I'M never offended by your comments. I readily recognize that I need to work on details of my trading.

However .. the phrase "I've had another good day in the market" is becoming common place in our house. (I'm not bragging, I'm not bragging). Every trader alwayse works on their analytical skills before entering a trade... However during the trade things become much more different. We (or at least i do)start to second guess our selves and dump a future winner or think we are brilliant and over hold a dud that gave us a graceful exit oportunity. Remaining objective on analysis DURING THE HOLD can be .. I find tough.

I accept that at my current skill level i'll not get every trade right. I also accept that some of my trades are more speculative than others. That said i'm fluxuating between a 65% and 77% sucess rate (closing a proffitable trade is a "sucess") BUT of my fewer losses a hand full are premature exit and a smaller handful of my proffits were prematurely exited. The line between realizing that you screwed the pooch and initial analysis be damned tighten the stop and preserve capital or letting the stock wiggle in confidance.

One of the reasons I love momentum markets and in stocks is that often even with entering above previous price the energy carries me into enough proffit soon enough to move up a stop and then let the stock do it's thing knowing that i'll atleast achieve X amount of proffit for the trade.

oh Tonight may be another caviar night. I have reclaimed another K of lost ground as of today.....and it dosent keep long after opening the can .
Apsll
Posted : Friday, July 20, 2007 5:28:19 PM

Registered User
Joined: 3/21/2006
Posts: 4,308
Scott just curious? are you still in DISH and MED??
Apsll
Posted : Saturday, July 21, 2007 7:29:43 AM

Registered User
Joined: 3/21/2006
Posts: 4,308
I ask about these two stocks because they are both good examples of why it would be wise to wait for the set-up to take shape. Below is a chart of MED and you can reference the chart for DISH above (both stocks are declining for now).

Scott asked why I thought his entries were pre-mature and in both cases I stated that there was some resistance to over-come before I would buy.

If a stock breaks through a resistance level then that is a good sign of strength. It usually will happen on increasing volume and can be very profitable if the trade is managed properly. Why gamble on a gut feeling that things will go the way you think? Why not build a powerfull watchlist filled with candidates that are poised on the brink of success, When the set-ups take shape then you buy them. You might have to wait days or weeks for a stock to triger a buy signal, but that is what the Stock Market is all about - Patience

Apsll
Posted : Tuesday, July 24, 2007 8:05:49 AM

Registered User
Joined: 3/21/2006
Posts: 4,308
In closing for this thread, entering a stock is as important as the method you choose to find your stocks and lastly how you choose to exit the stock (that is another whole thread by itself).

What I do, after I have selected a group of stocks that fit my trading style, is to look for entry set-ups.

1. Proximity to resistance and support levels. (wait for a break-out on good volume through a resistance level that also has support close by to use as my stop loss)

2. Calculate risk/reward. (if the ratio is not acceptable then move on)

3. check your indicators. (every trader has there own interpretation on the use of indicators so this part of the equation is very subjective)

4. Over-all chart pattern (this part is also subjective) but you must know what phase or cycle a stock is in and the chart pattern is your best resource.

Keep a log on all your trades, try to analyze the successfull trades and what you did (keep doing it). Analyze what you did on the losing trades and (stop doing it).

Minimize your losses by just exiting quickly and move on to the next stock do not hold a stock because you have a feeling that things will turn around, or because you want to recover your money (that is a shure path to bankruptsy).

Maxamize your profit by using solid exit strategies (again this needs its own thread)

In closing Scott. this is all just my opinion on what you need to do. Take it with a grain of salt and good luck to you...

Tommy21.
Apsll
Posted : Tuesday, July 24, 2007 8:28:55 AM

Registered User
Joined: 3/21/2006
Posts: 4,308
I forgot to mention that the over-all Market condition is very importand to your trading success or failure. Learn how to gauge the health of the markets. - Is it trending? Is it moving sideways? These conditins will determine the style of trading you should be using.

Also on minimizing your losses. If you are the type that can not accept losses then maybe you should not be trading in the stock market, because no one is going to be correct or profitable on every trade. You should view your losses like this. -

It is a good lesson to learn from, and more important than that, when you do achieve success on a regular basis (because of your discipline and solid trading skills) then your profits will far out way your losses. So that loss that you are so worried about will be re-couped latter down the road when you are successfull.

Thats it from here.

Good trading to all...
scottnlena
Posted : Tuesday, July 24, 2007 12:05:31 PM

Registered User
Joined: 4/18/2005
Posts: 4,090
Tommy I do view my losses like that.. BUT I've also recently gotten out of a period of taking nearlyevery trade as a loss. NO MORE LOSSES if I can help it.. at least for now.

I view and h ave viewed the market condition as weak and tenuous for a while.

However once I decided aparently I was wrong and a few items were worth holding for a bit... i'm nearly being proven wrong (right... whatever).

yea aparently I was wrong on MED. It was outside my system but just barely. I'm out of both of them.

All i'm in now is grow and iaac. I opened sgms and pwe short the last couple of days and closed those today proffitably. Not allot but reduced drawdown.
GROW is irritating me. I hade a nice proffit in that and IAAC and now holding losses. I would expect a move up from here soon ... if it dosent come i'm dumping them.
Apsll
Posted : Tuesday, July 24, 2007 1:01:26 PM

Registered User
Joined: 3/21/2006
Posts: 4,308
I had to share this chart of Blue as it was part of our discussion here. The set-up that we were waiting for to buy this has triggered the buy signal. You should have entered the stock at about $1.35 give or take. Your stop should be at $1.25 maybe $1.23

See what happens at the next resistance level at $1.57 or $1.60 Price should bounce back, consolidate, or gap over. Be prepared to sell at that level.

You might also see a small retrace the next couple of days (typical action on these long candles) Just keep your stop in place (hidden stop).

Apsll
Posted : Tuesday, July 24, 2007 1:05:37 PM

Registered User
Joined: 3/21/2006
Posts: 4,308
Notice how on strong Volume price broke through the resistance level. This is the type of confermation you want to see before you buy.
allenbary
Posted : Tuesday, July 24, 2007 1:11:14 PM
Registered User
Joined: 10/26/2005
Posts: 238
Scottnlina, something you might try to incorporate into your trading plan that I do (if you don’t already). All my scans I view weekly first flag only the ones that look promising, and then change to all flagged watch list and look for the ones with an entry setup on the daily.

"Yea apparently I was wrong on MED. It was outside my system but just barely" Never bend your rules to force a trade, EVER; this can form a bad habit. AB
scottnlena
Posted : Wednesday, July 25, 2007 10:20:41 AM

Registered User
Joined: 4/18/2005
Posts: 4,090
Yea... allenbary. I view my "system" as a simple alert signal that fits wint the Trifecta or around it. A stock dosent tneed to be above it's 50 necessarily so long as it is at it and looking like it gants to break up... OR I will and actually like severely over sold stocks. I know this is counter trend but most of my trades are so quick now that it dosent matter.

today was a perfect example of one of my favorite types of trades.

I floated an order for PAS slightly above the consolidatino high, got filled at at $25.00. in 10 min price ran to my limit at the target of 26.60

IN and out, nice gain. I'll keep an eye on it for a while at it is now "on the move" but those gains may take a bit to digest and i'll reenter later.
scottnlena
Posted : Wednesday, July 25, 2007 10:22:24 AM

Registered User
Joined: 4/18/2005
Posts: 4,090
Actually it's alread way down from it's high! I wish Ihad the balls to make some of my limit orders "stop and reverse" orders.

but that's probably greed right?
Users browsing this topic
Guest-1

Forum Jump
You cannot post new topics in this forum.
You cannot reply to topics in this forum.
You cannot delete your posts in this forum.
You cannot edit your posts in this forum.
You cannot create polls in this forum.
You cannot vote in polls in this forum.