A few thoughts on chat room team idea

[hi5]

Just a few initial thoughts.....

A clear strategy is essential for consistent returns
Focus on 4 stocks max
Review stock selection and strategy weekly
Preparation is the key
Know s/r levels both intraday and daily, - horizontal, trend line, fib etc
Know the swing
Entry conditions will be strategy dependent
Know target, breakeven & risk:reward ratio of every trade before entry
Stops - must be set before entry
Entry to be individual responsibility
It would make sense if everyone is working in the same time frame otherwise s/r levels may not apply
Indicators - personal preference but must be consistent with stock behaviour
It is NOT imperative to trade if required entry conditions not present.

Different personal objectives may make team operation difficult - personally I would prefer to focus on stocks that could give 30+ points per trade. This would rule out cheaper stocks (<£3)

Daytrade or position? Both preferably. My preference is for position trading - but happy to try both. Not interested in scalping. Happy to hold overnight if target requires.

Strategy?
Pullback - swing between s & r
Reward/risk 3:1 min
don't fight the daily trend - long or short - but not both

Comments welcome

Dave

 

[Jazz]

Hi Dave
Been thinking about this as my own strategy for a while,
just cannot stop myself getting distracted by keeping a watch list of far too many shares.
I have a big bouncers list of shares to trade, but even that has 29 stocks in it and with only 1 screen keeping track is tricky.
I do use the microscope on advfn though so all charts on one screen, but still too many really.

I was going to pick 2 tech & 2 ordinary, but keep changing my mind as to which ones.

Main ones are:
LOG (obvious first choice)
PSON

RTR
WPP
JMAT
CCH Nice moves
SHP
CAT (nasty spread, but on consecutive up/down days can go well)

Any thoughts
Best wishes
J

 

[hi5]

Hi Jazz
My favourites at moment are LOG,CTM,BARC and RTR

WPP looks interesting but same sector as RTR
JMAT,CCH,SHP & CAT - vols all a bit thin

29 on the watch list - DEFINATELY too many

Yes, one screen is very difficult - I'm struggling with 2 - seriously looking at getting a 3rd but space a problem.

what timescale do you prefer?

Dave

 

[Hill Farmer]

Hi5,

Could you explain your Risk/reward ratio of 3:1. Thanks.

 

[Jazz]

Hi5

Inside T10

I hear what you say re vols, really need 2-3 consecutive good days on them, but they do all have large moves.

J

 

[hi5]

Hi Hill

Reward/risk ratio is defined by the distance down to support vs. distance up to resistance (if you are going LONG)
Example: if support is at 1000, resistance is at 1100 and the price is currently at say 1025, then it's +75 up to resistance, -25 down to support, so you have a 3 to 1 reward/risk ratio. There's 3 times the chance of winning versus losing.

If you are going SHORT (because the price is just below resistance) just switch the figures round. i.e if price is currently 1075 for the above stock, then it's 25 up to resistance and 75 down to support. A 3:1 reward/risk ratio again.

This is a fundamental part of risk management and should be considered before every trade. Obviously the ratio is a personal choice but 3:1 is good IMHO.

Dave

 

[Hill Farmer]

Hi5,

Thank's for the very clear explantion.

 

[sukhibraich]

David

good stuff.

I liked your idea/explaination about Risk & Reward ratio.

I am watching RTR & STAN.

Sukhi

 

[MX]

Good post Dave

As you know I have been thinking along the same lines I feel that all these volatile stocks are pulled around by the ftse and the Naz. Keep a eye on these and trade the stocks of your choice. the advantage of stocks is you have L2 to assist in your trading.
I am setting my screens up to watch the above stocks support and resistance levels all marked on the charts.
I will also set up news alerts on the stocks and as you say follow the market direction.

Lets hope it pays off.

Cheers Jeff

 

[ChartMan]

See my bit on NDX support /resistance too under "US Trading..."

 

[MX]

Notes on LOG Price 1130 27th March

Following the break of pivotal support at
1220/1200 – which would have confirmed that a 15-month top had been completed prices dropped and almost instantly reached the support at 914/900. A rally is now in progress
and is struggling to reach the old break down area and resistance at 1200/1220. Any strength towards this area
should provide a good selling opportunity – to be followed by a more stable and persistent decline that should
retest 914/900. Whilst a close above 1200/1220 would negate the immediately bearish outlook it would need a
further advance above 1600/1610 before the technical evidence turned bullish.

Support 914/900 800/790

Resistance 1200/1220 1255/1260

MX

 

[MX]

Notes on WPP 762 27th March

The recent challenge of resistance at 790/810 from the old breakdown area appears to have failed. Prices
recoiled from this area quite sharply yesterday and whilst unable to clear 810 on a closing basis the stock looks
vulnerable. No clear support is evident until the key band at 690/688 and WPP seems increasingly vulnerable to
a re-test of this area. Any closing break below this key support band
at 690/688 would indicate a severe deterioration in technicals and an acceleration of the medium-term
downtrend. In the event of a close beneath 688 the retreat would be expected to fall back to support at 670/660
initially. Any such action would also threaten an extended medium-term decline to support at 550/548. In order
to negate the immediate bearish threat a rally and close above resistance at 790/810 is required. However, to
signal a move into clearly bullish territory a close above resistance at 880/890 would have to take place too.


Support 690/688 627/616
Resistance 790/810 835/840


MX

 

[Cigar]

Excuse my ignorance, but whats the reasoning behind this thread. Are you thinking of buying together as a group, or sharing pooled information?

 

[MX]

Yes sharing a idea we have discussed in the trading room. Also sharing info, ideas, methods ect.

What the whole boards about really but perhaps a bit more specific ..


Jeff

 

[titus-uk]

Excellent stuff - always good to read opinions and learn from them....keep it up please!

Mark

 

[Cigar]

A good idea to pool info and thoughts, as long as others make the effort with their thoughts.
Probably need 2 separate threads running, 0>2 day trading and 2>20day trading.

I'll offer my views on AIE, on a 2>20day basis.

(I don't hold the shares but its high on my watch list)
(My usual strategy is to search for bullish divergences, then wait for buying volume, usually on FT100's)

Now ~153p

Support 3 times at 148, next level at 130

Horiz. Resistance maybe 178, 195, 210

Fib retracement from Jan peak to recent low of 149
38% 174p
50% 182p
62% 190p

R/R 50% retrace/recent support = 29p/5p ~ 6:1

Volumes have been high over the last 3 days, but according to iii, there is a fair bit of selling going on.

I'm watching closely

Any views welcome