Friday, 3 October 2014

0004 - Trade Ford Motors (F)

Trade F - initial buy 2014/10/02
This should be - if not immediately stopped - a swing trade.
I'm interested in Ford as it's lost around 20% in a month or so and because it's been smashed cause "poor" sales data. I think, like some other people, that being Ford in the process of lanching 15 news models, monthly sales numbers are not enough now to justifly such abrupt and sharp decline.
Anyway, as chart shows, I've bought around what could be a good area of support.
Setup = R(D)
Tactic = OV(D)
Execution = tried a red to green entry in the first hour, that didn't work out immediately.
Entry price = 14,60
Stoploss = 14,20 (more or less)

Wednesday, 1 October 2014

0003 - Trade WLT

30 September, trade WLT

Stock was inside Reversal n.1 list. As the chart shows, it's been a long daily decline without any significant pullback. Dead cat bounce if you like.

Trade entry 2,28$ , exit 2,22$, shares 1000

1) Setup = R(D)
2) C20(H) n.3
3) open tactic n.4
4) under recent lows 2,18$
5) Ema12(D) or more
6) C20(H)
7) PPs (5min)
8) swing trade

Tuesday, 30 September 2014

0002 - About scans & lists

Let's start saying that a scan can be automated or manual.
A manual scan is the review of the stock in each list, elimination of the ones missed or negated, addition of new items.
Automated scans are done by programming.
They can be done both intraday or after close.

Let's start with REVERSAL setup. What I am looking for:

1) stocks declining 2 days with abnormal range, closing near lows;
2) stocks declining 1 day with a huge gap and huge volume and close very close to the lows;
3) stocks normally declining by at least 3 days above S200(D) (so I can review all kind of trend up declines and evaluate by my eye support/resistance zones)
4) stocks accelerating to the downside, declining by more than 3 weeks in a row and showing no pullback above Ema12(D) or that are into at least a second leg down
5) strong stocks showing a "waterfall". Strong = stock trending above its Ema8(D) and its S20(D)
6) panic declines. Panic = abnormal range/average range ratio developing in not more than 3 hours.

An important concept is "acceleration". If there's a change in slope to the downside, it raises the chance of a better pullback.

Stocks coming out from these scans will go into 2 lists:
A) reversal n.1 (1,2,3)
B) reversal n.2 (4)
C) reversal n.3 (5,6)

I'll refer to this scan as "REVERSAL SCAN" and I'll post stocks that I add and wipe out from my 2 lists.
So beware of this: you'll not see ALL stocks coming out, just the one I select.

Let's review the FLAG setup. What I'm looking for:

1) stock with strong/huge volume on the first push up. I'm ok with "strong" volume with stocks surging up from a prolonged consolidation zone during a long term uptrend. I prefer "huge" volume for penny stocks and all "pumped & dumped" stuff out there.
What identifies strong and huge? a simple ratio between volume and 20 days average that excludes last day. Above 2 and under 5 is strong. Above 5 is stronger and stronger. If I see a ratio of more than 50 I know I'm in front of a pumped and dumped stock or a dramatic change in the destiny of a company. Both worth a look!
All stocks coming out of this scan will be put into the  "VOLUME list" 

Scanning for stocks I happen to like something even if it's not a volume spike or a reversal candidate. These stocks, together with the ones making my "constant list", are put into a "DAY WATCH LIST".

What should be done with items in those lists?
They're all setups. I have to evaluate which tactic to use with them.
Behavior identifies the tactic to be used.
Then look for PPs to trigger the trade, set brakes (stops) and targets (if any).
If a trade is there's already a defined stop-zone...maybe a target zone...I have to do only this:
cause history taught me that what a stock does between entry and target is none of my business. It can go there in a bumpy mode or a slowly-candy mode. I can't predict it.

Monday, 29 September 2014

0001 - Introduction to the blog.

About me and what's in this blog:

Hi, my name's Andrea. I'm 36 years old.
This blog will not entertain you with long posts.
It's about me, a trader. Fighting in the arena since the end of 2008. Not yet very profitable. Not a loser either.
It's about a disciplined approach to technical analysis.
It's about focus, discipline, method, order, repetition, because I believe that history repeat itself.
As a good traders said: "trade well, profits will follow."
All I'll write is just the essential, not a word more, I won't waste my time or yours.
Beware, I'm on my journey, I'm not steady, not consistent. I'm not an active trader jumping in and out of stocks. Not yet.
I built my trading plan by my own.
I've taken inspiration from a few good books among the bunch I've read.
I'd like to mention Dave Landry 2 old books and Stan Weinstein 80's book above all. And Larry Williams whose 60's and 70's books inspired my first interest in this world.
Pristine free stuff is very good stuff, if you're already an experienced trader.
I'm boring. I like defined things or at least a clear idea of a plan.
I'm not arrogant as I seem, as a matter of fact I'm very friendly.
Well, see you! Hope you'll enjoy what you'll read on this blog!

Trader A.

About my trading plan:

My setups are basically 2, they are identified by the time frame:

W = weekly  ; D = daily  ; H = hourly  ; 5 = 5 minutes (1 = 1 minute and so on)

- R = Reversal
- F = Flags or continuation 

R and F can pop in different technical landscapes. It could be in a strong uptrend, in a volume play, in a strong downtrend, is a climax down day or climax up day or just in the middle of nowhere if I like the price behavior.

My tactics are 2:

- OV (oversold, overbought. It means to get into the trade while it's still declining)
- C20 (cycles based on averages. In deeper details I'll refer to C20(a), C20(b) and C20(c))
They are defined with the time frame as well. Ex. OV(H) = oversold hourly chart

My price action patterns (PP) are numerous, I'm not going to reveal them, but you can spot them easily by yourself and discuss them in private with me if you wish.

My exit tactics are the reverse of my entry tactics and exit PPs are the reverse of bullish PPs.

My stop loss is usually a technical one, it's based on the technical pattern or cycle phase. It's never a fixed number, because I lost a decent amount of money stopping out at exact numbers (for example 100$ not a penny more not one less) in sensitive zones.
Important: each trade is based on a defined setup and has a chosen tactic, each tactic has its "natural stop".
So, if I don't stop a bad trade, it means I am breaking my rules and I deserve to lose.

My trades are based on a sort of "multiple screen" analysis.
On of the most important thing to follow my trades is reading the time frame of the setup and of the tactic used.
The tactic time frame is the "main screen" or "main time frame".
I use inferior time frames to fine tune entries and exits.
I use superior time frames to spot setups and get an idea about targets.

How a trade must be archived into the database:

I have a large archive of trades but from now on they'll be archived in a much more precise manner:
1) setup
2) entry chosen tactic
3) entry execution pattern, number of shares, price, time, "intraday play" / "open play"
4) technical zone to execute the initial stop loss (initial = period of time in which the trade doesn't gain or in case things go crap immediately)
5) target (if any)
6) exit tactic
7) exit execution pattern, number of shares, price, time
8) type of trade: intraday (few minutes to few hours); swing trade (few hours to few days), core trade (few days to few weeks)

How every day should be organized:

1) 9:30 - 10:00 - check out chosen setups + scan 2 min volume gap up + 15 minutes high volume starts
2) 10:30 - 12:15 - scan strong declines that print an abnormal day range in a short period of time + check out Day trade up list for first pullbacks 10:30 time zone
3) 11:15 - 13:00 - scan for OV setups + check out DAY TRADE UP list for middle day pullbacks
4) 15:00 - 15:30 - scan for OV setups and final push down plays
5) 15:30 - 16:00 - scan for high volume up days. They're going into high volume lists to check in the next day up to 2 months.

How are lists organized:

1) VOLUME list (setups for flags, for pullbacks, for renewed high volume)
2) REVERSAL list 1,2 and 3 (already followed stocks + intraday scan reversal)
3) DAY TRADE UP list (setups chosen before the opening bell + intraday scans of rising stocks)

Each item on each list should be checked every 30 minutes if not less. Why?
I use alerts but I always miss opportunities that end up to be the best ones. That's why.

About my posts:

I'll post charts using freestockcharts, but I use Prorealtime software cause I use some proprietary indicators and need programming my scan as I like.