Breakout Trading using Time and Sales

[evostik]

Amit,

A question about the mechanics of your trade exit using IB and TWS.

For background, I am still currently paper trading Mr Chart's methods, and have over the last few weeks reeled myself back in from making too many trades in what were breakouts but without the momo and occasionally on a chart that was more messy than I'd prefer. I'm generally trading from about 1:00pm to 3:00pm ET (I live in Australia and this is the couple of hours before I go to work!) so there is no doubt chop in the markets at this time and I figure if I can trade consistently here, then trading in the first 3 hours should be a more pleasant experience.

On TWS, I enter trades off the market depth window, then once in I immediately create a closing stop order. This order then appears visually as a horizontal line on my linked chart which I transmit then I simply drag to the price I want it to trigger at, for example the opposite end of the previous candle. I know a random block order away from market could trigger my stop but it is a risk I am willing to take at present. If the price action is volatile I adjust stop level to take this into account, to avoid getting whipsawed.

I was just wondering if you would like to share how you manage your exits, or if anyone else would like to provide feedback or constructive criticism on the method I've described

Cheers,

Aaron

Hi Aaron.

I know you are after a reply from Amit but FWIW I basically do the same as you describe but I use Charttrader on IB TWS rather than the Depth Of Market. Rarely do I get stopped out by a block trade below the Bid/Ask but I guess its a matter of deciding what one is most worried about. When swing trading my position size is somewhat smaller than when scalping so I am much less concerned with having a STOP transmitted and in place. But when scalping (hence greater position size) I (maybe wrongly?) stress about losing internet or whatever at exactly the wrong time!

I also reckon that US lunch is tough to trade so its extra hard for you on that basis.

Anyway, good trading,
Steve

 

[amit1986]

Thank you, Steve.

 

[amit1986]

Results so far (all position sizes are 1000 shares):

HBC: +9 cents per share
HBC: -3 cents per share
HBC: -6 cents per share
CIE: +5 cents per share
WLL: +42 cents per share

The WLL trade was based on Mr. Charts' setup on rising candles on the 3-minute chart. If anyone is interested, I can post a chart.

 

[evostik]

Results so far (all position sizes are 1000 shares):

HBC: +9 cents per share
HBC: -3 cents per share
HBC: -6 cents per share
CIE: +5 cents per share
WLL: +42 cents per share

The WLL trade was based on Mr. Charts' setup on rising candles on the 3-minute chart. If anyone is interested, I can post a chart.

Hi Amit

Nice trading. WLL was clearly a 'reversal play' as it opened gap down.(?) I was wondering if you generally have an amount of time you now wait after open before you would enter? I assume that T+S reading was quite important to you here so you got in/out at the right time? Or maybe you 'just jumped' onto momentum for entry?

Did the fact that the first candle was a reasonable 'hammer' draw your attention to WLL or was it just the general % size of the gap down?

As I said, nice trading and Thanks Again
Steve

 

[amit1986]

+2 cents per share SWKS breakout...jumped on board as the futures were ticking higher and so was this stock...got out as it weakened...really very choppy

 

[amit1986]

Hi Amit

Nice trading. WLL was clearly a 'reversal play' as it opened gap down.(?) I was wondering if you generally have an amount of time you now wait after open before you would enter? I assume that T+S reading was quite important to you here so you got in/out at the right time? Or maybe you 'just jumped' onto momentum for entry?

Did the fact that the first candle was a reasonable 'hammer' draw your attention to WLL or was it just the general % size of the gap down?

As I said, nice trading and Thanks Again
Steve

Steve,

I didn't think of it as a 'reversal play'. I simply saw the trend as evidenced by the rising candles, minor break of whole number, minor retracement, and then trend continuation. I generally don't like trading first breaks of whole numbers, especially on wide-spread stocks like WLL, but wait for the second break of the whole number. In this case, I saw momo building quickly under the whole number, so went long.

As per above, I don't wait for a specific time to play this kind of setup. I am perfectly aware that as it tries to close its gap, there could be sellers coming in. Keeping that in mind, I simply focus on the order flow for an exit. Momo gets me in; momo gets me out.

 

[ChocolateDigestive]

Results so far (all position sizes are 1000 shares):

HBC: +9 cents per share
HBC: -3 cents per share
HBC: -6 cents per share
CIE: +5 cents per share
WLL: +42 cents per share

The WLL trade was based on Mr. Charts' setup on rising candles on the 3-minute chart. If anyone is interested, I can post a chart.

great trading sir.

 

[amit1986]

great trading sir.

Thank you. Will reply to your PM after I finish trading.

 

[amit1986]

really annoyed with myself for having missed a good trade on IP...I actually watched it break with modest momo but didnt take it...not a good decision.

 

[Dom1]

Do you think time-sales is more useful than level2 for reading momo?

 

[amit1986]

Do you think time-sales is more useful than level2 for reading momo?

When I started out trading, I was only using time and sales. But after sitting with Mr. Charts and taking his course, I realized the importance of level 2. Haven't looked back since. They both complement each other.

 

[amit1986]

what a boring choppy market

 

[amit1986]

-3 cents per share KMI break out...got stopped out on the 1-minute chart

 

[amit1986]

+3 cents per share KMI break out...tried it once again...it's a strange stock...very strong buying pressure but still struggling to move up

 

[amit1986]

+4 cents per share KMI breakout...scalped it again

 

[amit1986]

-5 cents per share KMI breakout failed
-7 cents per share KMI breakout failed

 

[amit1986]

+12 cents per share KMI reversal trade.

Saw selling pressure building, so shorted. Had enough of KMI.

 

[amit1986]

Done for the day. Good trading to all!

 

[Mr. Charts]

Good stuff today despite the choppiness, Amit Well traded, sir !

....and some damn good posts !

I didn't like the feel of KMI in the end either !


Talk tomorrow
Richard

 

[amit1986]

Good stuff today despite the choppiness, Amit Well traded, sir !

....and some damn good posts !

I didn't like the feel of KMI in the end either !


Talk tomorrow
Richard

Thank you, sir. You had an incredibly good day yourself. Small, modest profits for myself today, but not too bad.