Jul 31, 2008

TTEK saves the day

Went long TYC and TRN and was stopped out of both. Why??? Who the hell really knows. But I suspect it was because I entered at or near the fib. ext. based on the :15 OR. My trade earlier this week in KFT was the same thing. I will not enter any B&B trades at or too close to the fib. ext. What's too close? I figure around 2R is far enough away (a little under 2R will do as well).
Also went short AKAM on a break of the 12:09 bar low but it didn't work out. However, I didn't get hit that bad.
My saving grace today was TTEK. Entered long on a break of the 1:21 bar high which had taken out the 27.86 pivot high on good volume. Now, I probably should've been stopped out on this as well but I didn't place my stop before price moved against me. My new exit strategy calls for me to set my stop once price closes below the last pivot high (for longs). In this case, the 1:36 bar close below the pivot high of 27.86 and I should've placed my stop .02 below that bar which did not get hit. Price rallied after that drop and I decided to exit my position just below the fib. ext. Had I not made those stupid trades in TRN and TYC I might have had the cojones to let this trade ride a bit... possible beyond the fib. ext. I most certainly would've made about .30 more sticking to my exit strategy. Whatever... I was happy to make back my losses.



Jul 30, 2008


Took a quick loss in a GDX B&B trade. Shorted on a break of the 10:30 bar low (3-min). A look back on that trade and the volume wasn't what I would like it to be leading up to my entry. I look for lower volume and as you can see... volume was kicking up.
I then turned my attention over to GRMN. I initially missed a good setup off the 3-min chart on a break of the 11:54 bar low (red arrow, line) which took out the morning pivot low that set up at 37.69. It had a bunch of room to fall down to the fib. ext. so I kept monitoring.
I entered on a break of the 12:45 bar low which took out the previous pivot low at 37.01. My price target was just above the fib. ext. which is where I ended up exiting all my shares. Even though price subsequently dropped further down, I made the right call to exit where I did because if I waited, I most likely would have exited at 36.49 or so... giving up considerable profit.
There were a ton of stock candidates in my watchlist today and I had a difficult time filtering through them all. So I ended up just focusing on stocks that had a very high relative volume number. That's probably a good approach to remember.


Jul 29, 2008

Did well, but...

Not nearly what I should've done. Traded SAP (twice), AKS and CL. Got stopped out of my first SAP entry which was off the 10:24 bar high. 57.85 was decent resistance and my entry broke that area on good volume. I then traded AKS off a break of the 10:39 bar high. Things went wacky and fast. I was up quickly and really was just settling into the trade and looking forward to managing it. I was up almost 1 point before the shit hit the fan. Luckily, I moved my stop up to 58 and for some reason it was triggered and I exited at 58.16. At first I was pissed, but then the stock plummeted and I would have certainly lost more. Still bummed I was up .97 in the stock and ended up with a loss. I need to do a better job of locking in profits but the price action was all over the place.
After 11am I flipped over to the :15 charts and set my trendline alerts at the ORH/L of each stock. That's when I saw SAP again. But this time, I flipped back to the 3-min chart and saw a nice breakout bar. Entered long off a break of the 11:33 bar and started managing my exit. I was happy to make back my earlier losses but I was certainly hoping for a whole lot more. A one point move would've been perfect. Again, dinner called so I moved my stop to 58.68 and a sell-limit order at 59.24. Wouldn't you know it??? The damn stock stopped me out at 58.70 (although I don't see where price reached 58.68... should I talk to IB about it?). Still, it was a nice gain but the stock did end up moving up to 59.41.
I then entered CL off a break of the 12:45 high off the :15 chart. Nice strong bar with volume that finishes above the ORH. Can't say I really effed things up but I switched over to the 3-min chart to manage my exit... a new strategy I'm working on. I exited when price dropped below 73.84 as it was setting up to be a failed breakout. Looked like a good idea at the time. Decent profit but had I kept my exit rules I normally have off the :15 chart I would be sitting very pretty.
Overall a nice, active day. The more B&B trades I make the more I can realize what I'm potentially doing wrong and the more confidence I'll have.




Jul 28, 2008

Red again

Sucks being red but if there was a silver lining with today's trades it's that I was able to enter 2 base and break trades in the morning, flip over to the :15 charts at 11am and place two more trades (albeit in the same stock). Oh, and I also cooked dinner throughout all this.

The B&B trades were SID and KFT (red arrow with KFT is a potential second entry that I missed). Both started off with a quick bump but then turned on me for a loss on both. In hindsight, the relative volume for both was not good at all. Something I need to remember in the future.

I ended up shorting HAS off a break of the 11:45 bar low. This is not my typical entry bar as it had a long lower wick but after looking at so many B&B setups for the previous week or so I really liked this bar's volume and the fact it looked like a reversal. I was stopped out for a tiny gain off a break of the 1:30 bar high after moving my stop. I then re-entered on a break of the 1:45 bar low (red arrow) and came within .05 cents of my target (just above the fib. ext.) before price moved against me and I ended up breakeven.

This felt like a very tough day but I can certainly handle these kinds of losses. Still, I feel real good about the way I handled my trades... spotted them and took action. Did it all at a manageable pace with a new trading strategy. I'm gonna go out on a limb here and predict that this week will be one of my best in a long time. I can feel it.



Jul 27, 2008

Best of both worlds

In reviewing my weekly charts and looking at both the base and break setups off the 3-min chart and my normal setups off the :15 chart... something interesting occurred. I realized that the earliest signal off the :15 charts occurred at 11am and a lot of my B&B occurred before this time. So, I'm going to see how things go if I look for B&B trades till 11am then switch over to the :15 chart from there.

I'll still have my trendline alerts in effect and once they're hit I will flip over to the 3-min chart to see if there's any potential B&B setup. Sounds complicated but it's really not.

Jul 25, 2008

Learning curve

For me, the trickest part of B&B trading is determining exactly where the base is. I think part of the problem for me is I'm trying to find a base on every stock in my watchlist and I really should just look for an obvious basing pattern and then stalk the stock.
I traded BMC today for breakeven but it really should've been a nice winner for me but I didn't recognize a new base that was setting up. I originally set my baseline at 33.52 which was the first intraday pivot point of the morning on the 3-min chart. I then made what I believe was the mistake in the trade and moved my baseline to the next pivot point of the day which was 33.11. Since my original baseline did not prove to be resistance and was later broken again I should have never moved it in the first place.
What I'm thinking, and I may be wrong, but a baseline should be an area of support or resistance where price touches on at least 2 occasions. So, essentially, my baseline should consist of two pivot points at the same price. With this rationale, 33.52 was the most obvious baseline and an area to look for a breakout. Now if you look between 11am and 12pm you'll see a new baseline appear at 33.18 with 3 pivot point areas. I didn't this and ended up paying for. Had I caught it, I would have entered on a break of the 12.06 bar which would've lead to a nice profit.
I ended up entering on a break of the 12.12 bar on huge volume and things looked good originally but then price spiked up... then down and I ended up exiting the position for breakeven.
All in all, a good learning experience despite no profit. However, I really do feel that my recent B&B discovery in addition to focusing on volume is going to really help my trading out tremendously. Another observation... there weren't a whole lot of B&B setups today like there have been the past few days. Oh, and JNPR was another nice B&B trade late in the day off the 3-min chart (2:45 bar).

Jul 24, 2008

No trades

Not really by choice that I didn't trade... my trading software wouldn't boot up. Called IB and they said it was my ISP that was blocking the TCP or some shit like that. After asking the guy 3 times (since I waited 10 minutes) if there was anything he could do the best he came up with was for me to call my ISP. Remember, I live in France - the land of no customer service. In fact, if you actually want customer service it's gonna cost you .34 euros a minute just for the right to call.

So, after fumbling around and becoming extremely frustrated with not being able to even find the customer service number I thought I would use IB's online chat service. Long story short.. Raymond fixed me up in a jiffy after making a small adjustment to my .ini file.

I didn't even run my scan till 11:40.
However, I did go through a little exercise and looked at the charts up till 10:15 and placed my alerts as if I was going to actually trade. It was good exercise as it helped me formulate a routine that I can follow every day. In any case, I missed one very good B&B trade that I'm pretty sure I would've taken. It was AMZN... here's the chart:

Jul 23, 2008

More crap

Took CEC off a break of the 11:15 bar high and was stopped out a few bars later. I'm finding a lot of my losses occur on entry bars where the volume does not exceed the previous bar's volume. Some folks don't really look at volume when using X's system... but I'm starting the think that I should.

Which leads me to something else. Base and break trades. I recently subscribed to the HCPG newsletter (free monthly trial) and they had a really nice email that explained the B&B trades that they suggest. It all revolves around volume... heavy volume, heavy relative volume. The entry is also based on increased volume. Kinda makes sense. If you're long... you want more buyers coming in... sellers for shorts. I'm still getting my hands around the essence of B&B trading and how to properly spot and prepare for them. There's a little realization that I may have to 'suspend' my current style of trading in order to fully ingrain myself with B&B trading. Right now I'm looking at B&B trades off the 3-min chart and setting trendline alerts at what I think are the base areas so I don't need to flip around too much. However, going over my watchlist again tonight - yes, the same watchlist I used for gappers - I found a ton of opportunities. Here are just a few charts:

Jul 22, 2008

What else... a loss.

Shorted SNDK off a break of the 12pm bar low after my order never triggered from the previous bar (both were NR7s). Stopped out a few bars later. I was thinking of SWKS (12:30) but didn't like the potential reward at the fib. ext.

In days like these where good entries are hard to come by I just keep telling myself that it only takes one good day to make everything good again. Stay the course... stick to the plan.

Jul 21, 2008

Back from vacation

Of the three weeks I was on vacation I traded maybe 4 days tops and only executed one trade (a loss). I really did miss trading (although it doesn't seem I missed much). Got back to Paris today... took a nap and woke up around 11am EST. Figured I'd go through my trading routine to see if anything showed up worth trading. I ended up trading CHIC off the 12:30 bar low but was stopped out a few bars later. Liked the setup and played it right but it just didn't move in my direction. Let's see how the rest of the week holds up.

Jul 10, 2008

Late post... missed trades

I always feel like I'm going to have at least one good day a week of trading. So far this week... there have been very little opportunities even if I had traded a full day. Today, as usual, I stopped trading at 12pm. There was only one trade that had me really wondering whether I should enter and that was ZUMZ. I really contemplated entered off a break of the 11:30 bar low but price hadn't close at or below the ORL (only off by .01). It was an NR7 on decreased volume as well. The next bar presented another good entry which I should've entered but thought the h/l spread was larger than what I like for a $14 stock.

Later in the day I see JCP had a nice short opportunity on a break of the 2pm bar low. This week... JCP has been about the only legit trade I have missed. Would've been a nice gain too. I try to look at the positive and say that trades were out there that would've made my week and I (nothing else) missed them. Don't think I'll be trading tomorrow either.

Jul 9, 2008

Vacation trading

I've actually been trying to trade since Monday but nothing has really interested me. Granted, I've decided to only trade till 12:15 or so in order to salvage a good part of my vacation day.. so that limits things a bit. I think yesterday I had an order in that was never triggered but that's it.
Trading today but not sure about the rest of the week.
Hope you all are doing well.