Registered User
Joined: 7/28/2007
Posts: 118
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Greetings! 
Let me start by saying thanks to Worden for having this excellent discussion board, and further thanks to all of you who are obviously very seasoned yet willing to share so much. Diceman, HNC, APSLL, Scottnella, Bustermu, and others...I have read, re-read, and re-re-read several posts, watched videos, read books , created scans and PCF's until I cannot see straight.(why didn't they tell me this was addictive).
I understand more than I did back in early July when I thought listening to Cramer on CNBC was a good way to pick stocks! Good thing I was patient and methodical in my education.I still have a looong way to go but I am very near putting a couple of the systems I learned on this board to work. Still paper trading right now and doing pretty well. Focusing on trade management in order to minimize losses on trades that go South, yet let the bulls run when it happens.
With all of that said, could I get an opinion on BWINB? Looking at it as a short term swing.Too early to buy? Should I wait for further confirmation? Is this really a weak swing candidate?
The formula in the bottom pane is for Williams%R.
Thanks again for all of the great discussion...
My chart is located at the link below.
http://img339.imageshack.us/my.php?image=bwinbpp9.jpg
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Registered User
Joined: 12/21/2004
Posts: 902
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Grizzled - I personally think you're too early to buy. Compare the minor low of 8/28 to the minor low of 8/16 and then look at the MACD-H associated with those dates. The 8/28 is lower than 8/16, which says to me that the downtrend still isn't over. I would wait until there is a minor or major low that has a higher MACD-H than the one in the leg immediately preceding it as a sign of a weakening downtrend. But that's my opinion.
Just curious - what do you see about the chart now that makes you consider entry?
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Registered User
Joined: 11/5/2005
Posts: 180
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How come the pop-up attacks when I view the site?
Just curious, nothing made it through but man...talk about flags going off.
Maybe its just me.
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Registered User
Joined: 7/28/2007
Posts: 118
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HH,
Probably inexperience as to why I am loooking at this one for an entry. However, It appeared that it was in an overbought condition according to williams%r, unless I am interpreting that indicator incorrectly.Also trading above the 200ma as well as the 50ma. TSV 27 is crossing over its' 11ma as well.Appeared as though all of that combined mightmake for a decent entry.
I plotted the macd-h as suggested and I see exactly what you mean. I will study your prior posts to learn more about how you use it.
Thanks for the input.
r1cowan7,
Not sure whjy the pop ups. I clicked on the link on my post and went straight to the chart.....I just signed up for this free service today, so if this becomes a recurring problem, I will look elsewhere for a host.
Thanks
G
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Registered User
Joined: 12/21/2004
Posts: 902
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Grizzled - we all have different styles and strengths. I like to use MACD-H as an indicator of trend strength - so to me, in this case, it indicates that the downtrend hasn't lost it's strength yet and that entry might be premature.
However, there may be other things going on that are indicating a turnaround that aren't apparent to me and don't show up in MACD-H. Others on here are better at reading bottoms than I am, so don't discount your ideas just based upon my opinion or that one indicator. It's always a good idea to get as big a picture and as many opinions as possible - but ultimately you have to make the decision for what fits your style.
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Registered User
Joined: 7/28/2007
Posts: 118
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HH,
I think the phase I am in is trying to define my style and build confidence in my system. (I'm pretty sure I want to swing trade)Having you folks around to bounce ideas off of is invaluable.
Thanks again.
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Registered User
Joined: 11/5/2005
Posts: 180
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No worries, just wondering...can easily be my computer.
OK, back to stock talk.
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Registered User
Joined: 10/26/2005
Posts: 238
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Grizzled1, I hate to keep quoting Big Block but we get paid to take risks. Make your chart three months chart, and then draw a line from the recent low back through June. You should see that line separating support and resistance. Notice we are nearing support again, which should make for a good entry. Scroll the chart to a weekly view, and it still show the same support and resistance which is good. The key would be an increase in volume. Most important thing is money management, as a swing trade we want to buy it just above the line with our stop below the line. If I was to trade this, which I may because I like to “put my money where my mouth is”. I would buy at the open tomorrow morning if it looks to be a good day. Say 27.40, I would place a stop at 26.40. My profit target would be above 29.00 that is their previous high. I would enter with 100 shares to get into the position, and if I am correct. The stock will move into the direction I think it would, I will add as it moves up. My initial stop is placed low enough to prevent from being whipsawed, if the stock weakens, I will sell and take a small loss. I think this gives me the best chance by keeping my losses small and room for my profits to grow. AB
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Registered User
Joined: 4/18/2005
Posts: 4,090
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"Still paper trading right now and doing pretty well. "
Glad to hear it.. this is a difficult market. Just wait till we get into a momentum rally type of market. Just don't loose your head. I've started taking a day off after any sizeable gain. I also thought about putting a sign on my computer that says "you are not smart... you are a mental midget and are only catching rides ... not outsmarting the finest minds on wallstreet". Because after a nice winning streak... it begins to feel easy... and that is IMO dangerous. Some of my best trades are the ones where the voice at the back of the head is terrified.
i'd say good luck but I think it's mroe a case of we make our own luck.
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Registered User
Joined: 1/28/2005
Posts: 6,049
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This may be just a shade early but it
could be worth a shot.
What I like best about it. Is the cycle
about each month to month and a half.
Bottoms in early march, late April, early June,
late July, (it looks like another one is just about
due.
I also like that it bounced off previous
resistance. The level of approx. 26.75
was resistance in Feb. 2007 and May
and July 2007.
Tomorrow will probably be the first real trading
in this. (with everyone back fron vaction)
Thanks
diceman
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Registered User
Joined: 7/28/2007
Posts: 118
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Great feedback. It's interesting to see how people recognize different strengths and weaknesses in a potentiol trade.
Allenbarry I agree, the new support is one of the things that caught my eye to start with. I think it is fairly weak as it has only been tested once, but the stock appears to be in a short term uptrend. Unfortunately I have a day job and will not be able to see how this one opens before I make the decision. The consensus appears to be be this one might be a touch early, so I'll check this one at lunch today, if it heads in the right direction I'll enter a trade.
Scottnlena I should probably quantify "doing pretty well". Only 5K in the trading account, so that is what I am paper trading with. Doing well to me so far means the 3 trades I have entered I am up 2 out of 3, not by more than a couple hundred in a week, and number three is still active. As a newbie I call that pretty good. I cannot tell you how aware I am that I am just a hanger on in this market. I also have read enough from all of you to know that losses are coming, It is my job to minimize them. No ego here....
Diceman, Nice job explaining another thing about this stock that I liked, which was the cycle it seems to be in. My eyes caught it, but you explained it such that I will look for this type of cycle again...
G.
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Registered User
Joined: 3/21/2006
Posts: 4,308
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I would be inclined to agree with Alenbary on this one, First price tested the highs of 2004 and now it is bouncing off what I consider to be strong support (It held as strong resistance for February,March and July)
Anyway I have drawn a trendline in my chart to show the support level and would actually play it just as Alenbary suggested.
I also see Dicemans indicator (cycle) on the daily is showing clearly what Diceman has eluded to. (IMO) this would make for a good swing entry followed by a common sense stop loss. Beware of a bad day for the nasdaq, it will open weak but might rebound...
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Registered User
Joined: 3/21/2006
Posts: 4,308
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Correction the resistance held for February, May, and July.
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Registered User
Joined: 7/28/2007
Posts: 118
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I checked BWINB at lunch and it looks like all of you made the right call to wait for the open to see if it got any action...I checked at lunch today, and no action. I would have gotten in here too early and had to wait for it to move up. I still believe it will move up, the old resistance/now support is still in place, my stochastics 5,5,3 is divergent, and looks like Diceman indicator is close to helping with the decision......
BTW is it my newness or does it appear that when the stoc5,5,3 and dice indicator agree it is usually a good entry (long)? Not by themselves of course, but it seems to be a good place to start looking....Thoughts?
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Registered User
Joined: 12/21/2004
Posts: 902
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Grizzled - that's looking to me like it might be forming a pennant on the daily chart - which is generally a continuation pattern - meaning that it would probably break to the downside from here.
On the other hand, if you open your weekly to zoom=4, this appears to be part of a handle on a cup that was just completed that started back in Dec 2004 - and what a nice tight base. If that's the case, though, I would figure that the handle still has a couple more weeks, at least, to form before it does anything. It could conceivably go as low as around 26 or so and still be a handle.
Notice, also, on the weekly, how there was definite resistance at 27.70 on the way up, that didn't hold as support at all on the way down. Just sayin'
I can't offer guidance on a 5,3,3 stoch - I've never used that setting and I rarely use stochs. But be aware that the Diceman Indicator just indicates a "Decision Point" where *something* will happen - but there's no guaranty that it will be up or down from there.
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Registered User
Joined: 7/28/2007
Posts: 118
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Hohandy,
Interesting viewpoints. I do see the pennant. Is that a stronger pattern than the new support at around 26.85 in the context of looking for a pivot point?
I never would have spotted the cup an handle pattern. Should I be looking that far back when validating a trend to catch a swing in?
I also see the relevance in the resistance that the weekly chart reveals....Dangit...just when I think I am beginning to understand.......
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Registered User
Joined: 12/21/2004
Posts: 902
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Grizzled - I have no real feel for how a recognizable chart pattern does when it meets support/resistance. Nothing is ever a certainty, just I know that flags and pennants are generally continuation patterns but not always - maybe the exceptions are when they hit support/resistance. Someone else may have more to offer on the subject.
It's always a good idea, when a stock catches your eye, to open up the various zoom levels and the weekly and the monthly chart and see what it looks like "in the big picture". Sometimes you really can't see the forest for the trees unless you look at the longer time frames and over a longer period of time. Takes just a minute and is a good due diligence sort of thing. You never know what you might find or what ideas it might give you in your trading. A general rule is you look at the long-term for overall trend and the short-term for entry. And I think that also holds in swing trading.
I'd like to ask you another question as to how you happened upon this particular chart, Grizzled. What particular factors are you looking for and how many other stocks fit what your criteria?
The reason I ask, is that when I'm looking for short/medium term trading, which swing essentially is, I'm looking for a stock that has the potential to maximize it's return during that period. I don't know what kind of scaling that you're using on your charts, but I use a log scale - if you don't, switch to a log scale on a daily chart for a minute and put it on zoom=6, which will show you 3 months worth of data.
Now the way log scaling basically works, is that they divide the chart area into 12 equal areas with 11 horizontal lines. They set the uppermost of the scale depending on the highest price in the time period, and the lowest on the lowest price in the time period. So basically, take the upper and lowest price in the 3 months, and divide by 12 - and that will approximate the number in the bottom left-hand corner in red under the price scale.
Notice in BWINB, at zoom=6, that number is 1.42%. That is roughly how much percentage the price movement from one horizontal line to the next will equal. In order to get 10% return, your price will have to cross about 7 lines - more than half of the chart. You'd have to open the daily chart to zoom=2 - 16 months worth of data, before that log number goes over 2% - meaning about 26% price movement from top to bottom. One way of looking at it - if it takes that long to get 26% movement in the stock, is it really a good candidate for short-term swing trading looking for a decent return? Check out, for example, SWIM, which I posted about earlier - 3.73% on zoom=6. It wouldn't take a whole lot of relative movement to get my 10% compared to BWINB. I myself never consider a stock with a log of less than 2% - but that's me.
When evaluating stocks, if you have a bunch that meet your criteria, it's a good idea to go with the stock that has the higher log numbers. There's more versatility in the stock (a potentially good and bad thing), but if you have gone through your indicators and feel that that particular stock is a good swing candidate on the long side and is likely to go up, then that volatility is a good thing.
Hope this makes sense.
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Registered User
Joined: 7/28/2007
Posts: 118
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HH,
I did what you suggsted and zoomed 6, I see what you mean. That took me out of several potential trades I might have considered. The volatility I guess is what you need to make swings happen.
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Registered User
Joined: 7/28/2007
Posts: 118
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You asked;
I'd like to ask you another question as to how you happened upon this particular chart, Grizzled. What particular factors are you looking for and how many other stocks fit what your criteria?
Essentially I am using the HNC Long set up scan he taught in an earlier post.
My scan is set up as follows using the HNC formula;
XAVGC3 >= .995 * XAVGC5 AND XAVGC3 <= 1.005 * XAVGC5 AND XAVGC3 >= .995 * XAVGC8 AND XAVGC3 <= 1.005 * XAVGC8 AND XAVGC3 >= .995 * XAVGC10 AND XAVGC3 <= 1.005 * XAVGC10 AND XAVGC3 >= .995 * XAVGC12 AND XAVGC3 <= 1.005 * XAVGC12 AND XAVGC3 >= .995 * XAVGC15 AND XAVGC3 <= 1.005 * XAVGC15 AND XAVGC3 > XAVGC60
Watchlist-All Stocks
HNC Long Opps- True
Price Per Share- 5.29-45.59
Total Volume Last 13 Weeks- 50-99 Market Rank
Optionable Stocks- True For liquidity, or so I hear.
Today the scan gave me 57 stocks to look at. The ones I liked the best and had a >2% reading on the log scale (i'm learning) are;
CCMP
PWAV
FOXH
BOOM
SVR
EXPE- I would watchlist this one
FDRY- watchlist
EMC- watchlist
PBG- I liked visually but it's log reading was too low.
EAC-Good visually low reading on log scale again. However it has some enticing swings. My novice eyes tell me it is in a rectangle pattern?
I have been looking at stoch5,5,3 for entries, especially if the diceman indicator agrees, Not sure how good this is, but it does seem to be workable. It looks like I could get whipsawed some and also miss an initial big move up from time to time, but too inexperienced to avoid that with anything other than good stops. See link below;
My problem is as I read and learn I am drawn on to another post, or topic in a book, or this formula and that indicator. I have way too many scans and need to learn some simple entries. Suggestions?
BTW I have purchased a basic book on chart pattern recognition and trendline drawing. Thanks for all your input. Us rookies need all the help we can get!
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Registered User
Joined: 12/21/2004
Posts: 902
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Exactly, Grizzled - I said "versatility" in that last sentence, but meant "volatility". A swing trade depends upon movement - turtles don't really swing too much. Just make sure that you are confident in your indicators and entry and stops so that the volatility works for you, rather than against you.
Another thing I should mention is to pay attention to average daily volume in the stocks you want to trade - if a stock is too thinly traded, you may have a hard time exiting your position profitably. You're likely to have problems in a stock trading just 20k shares a day as BWINB did today. Most people set a minimum threshold of maybe 50-75k/day (and often even more) for their trades. It's a good idea to set up some kind of PCF or EasyScan criteria that sets something like a 45 or 50 day moving average of volume, and screen out anything below whatever threshhold you decide upon from your consideration.
Notice how that support area got taken out today - definite break to the downside from the pennant.
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Registered User
Joined: 7/28/2007
Posts: 118
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Sorry about the giant chart, I posted that instead of the link......
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Registered User
Joined: 12/21/2004
Posts: 902
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Grizzled - I've found for me that I like to really get into one indicator or chart pattern, and really play with it in every possible way until I'm really comfortable with it before moving on to something else. When I first started, for example, I concentrated on cup-and-handles and then moved on to other patterns and indicators one by one. For the past several months I've been fixated on MACD-H and have come up with several interesting ways to use it and bore this forum with it. At some point I'll get excited about something else and turn to that. In the meantime, every single pattern or indicator has remained in my arsenal. I've been doing this for several years and am still learning. There's way too much to try and master everything at once - concentrate on one at a time and your confidence level will increase as you gain slowly gain expertise one by one.
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