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:


greytrader said...

Took CEC same entry, same result. Its like we have the same watch list :-)

3 min charts are pretty fast. Must use a short list to keep up.

Anonymous said...

base & break is also random. You will find a whole lot of stocks that fail to break.
3 mins charts that you show is highly risky..and it is far away from 5EMA.
There are lots of swindlers out there..be careful.

Trader M.D. said...


What also helps is the Best of Blog section @ HCPG's site.

I've also noticed that as soon as the day begins, I sort their watch list by % gainers to % losers so I know immediately which ones are moving in the direction of their trigger / base setup.

The most important thing is a solid base / stop point (or stop out on a reversal), and the volume as you noticed.

Good luck. It's a great service.

bl said...

Some interesting 30" charts: cnh4 cec7 aet3 pss6

Tom T. said...

oonr7 - looking forward to see how you B&B trading goes - I still do not understand how it works - to me it looks like a sloppy x-trade setup you have a gap up and then when price clears OR high again after consolidation prior to the ORH then you get in?

I had a question about the HCPG - is finding B&B setups reliant on HCPG's proprietary email alerts or do you think you could create a scan that could locate similar setups?

OONR7 said...

gt: yeah, weird how that happens :)

anon: there are no guarantees but I like how the charts setup on the 3-min chart and the generally smaller h/l spreads on entry (lower risk). Timed correctly... B&B are very profitable. Have to disagree with your 5ema statement as price would be closer to the 5ema off the 3-min chart compared to a longer timeframe.

tradermd: I need to check out that section. I like your tips regarding the watchlist but I also find my current gapper watchlist contains a lot of candidates as well. I think the nature of gappers (heavy volume) works well with B&B trading. Trick is keeping the list short. I think I may sort my list by relative volume and just look at the top candidates.

tom t: I look for an obvious intraday pivot point and look for some kind of consolidation or shallow base along that line and then wait for it to be broken on increased volume. Sometimes that intraday point point area is the ORH/L... sometimes not.

There really aren't a whole lot of X similarities as B&B trades do not need to occur with gappers.

With all that being said, I'm not rushing into anything and still need to learn and see more setups before I can build up my confidence.

TraderAm said...

Hello 00nr7.

Good stuff, I'll look forward to see how you get on with HCPG. From what I've read about them, they are a very good service.

Just for info. I did have a look at them a while back (last year). As I understand it, they use Daily charts analysis (so done on previous night) to get watchlist and then use 3 min charts for entry on a B&B as you say ?

Since they use 3 min charts, I think the watchlist can only be aorund 10 or so stocks.

It wasn't really for me (yet) as I find 3 min charts too quick for my liking. But using Daily charts with intra-day entry does seem to give them good consistency, so defintely a good thing to add to your arsenal.

OONR7 said...

traderam: we'll see how it goes. I'm thinking of sorting my regular watchlist by relative volume and paying attention to the heavy volume stocks. I will also set alerts at the first intraday pivot areas and wait for that to be crossed. This way... I don't have to monitor every stock, just the ones that have triggered the alert.