Best Thread How To Make Money Trading The Markets.

[RubenE]

Hi Richard,

Okay thanks for the reply. So basically if I'm correct then position sizing to match the maximum allowed loss becomes even more crucial on the bigger timeframes using this method, because you also have to discount overnight swings. Still interesting to backtest, thanks for the inspiration.

Best regards,
Ruben.

 

[RubenE]

Today I think I spotted this setup on the 5 minute chart of the stock AKZA.AS. It would have made about 50c a share in about 35 minutes. P.S. if I'm not supposed to post charts in this thread please let me know and I will remove it.

Best regards,
Ruben.

 

[Mr. Charts]

You've got it Ruben

The problem with overnight/multi-day plays is that the stock can gap against you unpredictably so your potential risk is also unpredictable.
Richard

 

[Mr. Charts]

to "jg"
I have answered your question but the email has bounced back saying you only allow incoming from listed senders.
Richard

 

[danielion]

Hi Mr. Charts,

Thanks for the transparency and the great posts. Hey, earlier in the thread you mentioned that slippage is rare. I have never encountered more than about a 5 cent slip on my sell/buy stop for a stock like goldcorp. But I am concerned about what could happen. Could I see a 50 cent or so drop someday, and what is my best defence against this. A stop then limit order further down? Funny on the charts I noticed a bar down through my sell stop once about 20 cents and yet I wasn't liquidated untill about 5 minutes later. Will you normally see the big players sell and buy their large lots slowly. Thanks for the help?

Dan

 

[Mr. Charts]

Dan, There could be several reasons for this. Sometimes a block trade prints off away from the current price. This can cause a spike on the candle and fool the unwary into thinking that a hammer has been formed by price being forced down further with extensive selling then buying pressure coming in and pushing the price back up. Such a standard widely held belief is often simply wrong.
All my stops are mental, I never put stops in the market, but I am very self disciplined and know my worst case loss before I enter a trade. Often I do not wait for a stop loss or trailing stop to be hit before exiting. If level 2 T&S tell me price/demand/supply is moving against me I will often exit before my mental stop. In other words my stops are "worst case" and I won't sit and watch myself lose money or gain less money by waiting for a stop to be reached before exiting.
Sometimes, of course, level 2 T&S tell me nothing and are just "noise", or to be more precise, are insignificant.
Hope that helps,
Richard

 

[Cburg]

Hi Richard,
Thank you so much for the great thread! I was wondering if you could share with us how you set up your stock scan? What categories and values do you usually use? Thanks a lot!
Best regards,
Cburg

 

[Mr. Charts]

That depends on which scanner you use.
You are looking for big risers/fallers which are clearly trending. on the day.
Volume depends on the time of day - and what sort of day it is. For example a low volume day like today still produces candidates for this particular set up so you might only be looking for 300k after the first 30 mins of trading. On a normal day you'd look for maybe 500k by 1000 ET.
Richard

 

[simba00000]

Excellent thread Mr. Charts! I emailed you, hopefully you get it and look forward to hearing back from you soon.

Best Regards, Chris

 

[Mr. Charts]

I always like to read the pre-market news as that helps me draw up a list of potential stocks.
Today it seemed to me as if the shipping stocks might produce an opportunity.
I don't trade the news as such, I trade the reaction to the news if one of my several set ups occur and is then triggered on level 2 T&S.
This example is similar to the particular set up I've discussed in this thread, but it is a variation.

The other point I'd like to make is that many feel that taking trades shortly after the market opens is somehow dangerous. It isn't, provided you have a rigid stop loss and your position size is closely related to the stocks movement and the buy/sell pressures are readable.

The image is from my private site. Please don't ask to join it, it is by invitation only and not open to the public.

Richard

 

[Mr. Charts]

This is the trade which that pre-market effort produced.
Entry was on the red X hairs and the image taken at the time of exit.
The reason I didn't wait for the exit candle's low to fall below the low of the previous candle (that inverted hammer-looking one) was that level 2 T&S told me the price was highly likely to fall further. In fact it did do so and dropped to 16.09 after my exit.
Profit 34c on that first trade alone. That's $340 on a 1000 share position size and of course pro rata for smaller and larger positions.
Richard

 

[Freeman.ayres]

The other point I'd like to make is that many feel that taking trades shortly after the market opens is somehow dangerous. It isn't, provided you have a rigid stop loss and your position size is closely related to the stocks movement and the buy/sell pressures are readable.

Richard

Hi Richard!

Thank you for sharing your wisdom with us. There is an statement (marked in blue)that got my attention in the quote before and a question arose: How do you relate your position size to the stock movement?

Thanks

 

[nile_croc]

Richard,

Thanks very much for the trading insight. That's why these forums are so great, lots of good ideas.

Thanks again

 

[candles]

Hi Richard!

Thank you for sharing your wisdom with us. There is an statement (marked in blue)that got my attention in the quote before and a question arose: How do you relate your position size to the stock movement?

Thanks

Maybe he is talking about adjusting your position size based on the typical volatility of a stock?

 

[Mr. Charts]

Thanks for the comments and emails.
Freeman, I'll address your question in detail when I get time.
Richard

 

[thevinman]

This is the trade which that pre-market effort produced.
Entry was on the red X hairs and the image taken at the time of exit.
The reason I didn't wait for the exit candle's low to fall below the low of the previous candle (that inverted hammer-looking one) was that level 2 T&S told me the price was highly likely to fall further. In fact it did do so and dropped to 16.09 after my exit.
Profit 34c on that first trade alone. That's $340 on a 1000 share position size and of course pro rata for smaller and larger positions.
Richard

Hi Mr. Chart,

GNK was a very nice play. I did a similar set up play in VRSN, but a little later in the morning.

I have a question about the current volume. You entered the set up in the 6th minute. What should for you be the minimum current volume on a stock before you enter the set up? Would you have entered on only 20,000 shares coming through or 100,000 shares? Or do you also take relative volume into account?

I ask this because I always put the current volume in my powerscanner on 400,000 to begin with. I don't know exactly when NYSE stock really open for trading, but when this amount of volume comes through I know they are open for business.


Cheers thevinman

 

[Mr. Charts]

Hi Mr. Chart,

GNK was a very nice play. I did a similar set up play in VRSN, but a little later in the morning.

I have a question about the current volume. You entered the set up in the 6th minute. What should for you be the minimum current volume on a stock before you enter the set up? Would you have entered on only 20,000 shares coming through or 100,000 shares? Or do you also take relative volume into account?

I ask this because I always put the current volume in my powerscanner on 400,000 to begin with. I don't know exactly when NYSE stock really open for trading, but when this amount of volume comes through I know they are open for business.


Cheers thevinman

Hiya Piet,
This is getting very detailed, but I'll email you when I've got some time in the next few days.
Best wishes,
Richard

PS This stock was on my pre-market list anyway; it wasn't found on a scanner.

 

[simba00000]

Mr. Charts,

That is brilliant. I am looking to tweak (and optimize performance) one of my strategies which is almost identical to the main one on this thread. Fantastic thread, thank you!

Chris

 

[Mr. Charts]

Glad you find it useful, Chris and FL gator man

Freeman, I haven't forgotten and will answer

Piet,
You have email

Richard

 

[Mr. Charts]

Another one from today - they are around every day.
I found this one by scanning. Obviously it would have been more profitable had I ran the scan a couple of minutes earlier, but hey, easy money is easy money and I'm never greedy.
Short on the X hairs as always and exit at time of screenshot. I didn't wait for the usual chart exit signal as I could see a probable bounce coming on level 2 T&S.
Richard