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Wednesday, August 16, 2006

ANF - 081606; 15-minute chart




I am leaving for the day, but wanted to post the ANF chart. It is similar to my BRCM trade yesterday, but much "cleaner" and overall a better set-up.

I entered on a break of the ninth bar high which was the NRM, and an inside bar. I sold at the halfway point between the high and the Fibonacci extension (of the previous day's low to the opening range (OR) high).

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14 comments:

dan said...

Great trade. I caught ANF as well, sold too early, bought back in. Could've made a lot more.

X, quick question. My pos. sizing is all messed up. What % of your overall portfolio do you risk per trade? I remember you saying you had a fixed amount for each trade, I'm just curious because I need some help.

Thanks!
Dan.

Jon said...

Checkout UPS. Didn't take the trade but got in FDX later in the day based on UPS.

Like John in the previous post shorted DAKT and got stopped out.

GX said...

LEAP, RACK and ANF my longs for the day. RACK nice and tight 15min bars.

Picked up MLS(15) short break of 2nd bar.

Day trades like today and the quantity to choose from don't get better than this.

John Wheatcroft said...

Great day - picked PETM on the break of the second bar and took it to the top around noon.

Thanks X.

Anonymous said...

Check out TOMO above the Fib extension.

TJ

Anonymous said...

Dan, you might check here:

http://traderx.blogspot.com/2005/11/trading-faq.html

He does not look at risk in terms of his total portfolio.

TJ

dan said...

Thanks a bunch, TJ!

John said...

Hello,

I am posting this question on another thread here too, but wanted to ask everyone where they place their stops.

I seem to get stopped out a lot. I was placing it $.02 beyond the entry candle high/low, using a limit order with $.03 cushion to fill. So if the entry candle high is $10.10 and I'm shorting, my stop would be set to activate at $10.12 with a fill of $10.15 or better.

I found this was not a great way to do it. I can't tell you how many times I see my stop taken out, only to have the price reverse and go my way. The other problem, was that $.03 was never enough of a cushion - invariably the price would hit my stop and move very quickly $.05-.10 beyond, so that I got no fill and would have to scramble to re-enter.

I now set my stop $.06 beyond the high/low of the entry candle with a stop market order.

Is there any better way to do this?

Thanks for the input,
John

KayakHandy said...

My long trades were MEDI and GILD...MEDI was not great but GILD were real good.
Got in on MEDI on the third 15min. bar and promptly got stopped out on the fourth bar for an .07 cent loss but got another set up with a break of the Ninth NRB Exit was at 27.52 with an .08 cent risk which gave a 3.26:1 ratio including the .07 cent stop loss.

GILD was a fantastic long on the break of the third 15 min. candle at $62.97 and got stopped out at 63.82 on the thirteenth candle with .10 cents risk...not to shabby!

John said...

Hi Kayak,

I posted earlier about stops, but wanted to ask you specifically about your GILD trade. On my 15m chart, the 3rd candle has a high of $62.95 and a low of $62.70. If you entered at $62.97 on a break of this candle, shouldn't your initial stop go at the bottom of that candle? That would give you a total stop of $.27. I find that in addition to this, I need to "cushion" the stop because often the price will touch the high/low before moving in my direction. Since I am stopped out quite frequently, I am looking for a better way to manage my stops. (refer to earlier post)

I can't see how you traded GILD with a $.10 initial stop, unless that is simply what you risk on every trade. Since your stops vary, I assume this isn't the case.

Anyway, I would greatly appreciate any insight you can give me. I really want to make this work.

Thanks,
John

John said...

Hi Kayak,

I have a question about your GILD trade. I posted earlier with questions about stops. I can't figure out how you traded GILD off the 3rd bar at $62.97 with a risk of only .10.

By my calculations, your initial stop should have been at least .27 if you placed your stop at the bottom of the entry candle. I find that in addition to placing my stop this way, I need to pad it to keep from getting stopped out. And I still get stopped out quite a bit. I now add .20 extra to the range of any candle - .05 to get a fill going in and .15 if my stop market exit goes really bad. This reduces the number of shares I can take on and makes my stops much, much wider than yours typically are.

Any insight would be appreciated.

Sorry if this is a repeat, but I didn't see this post go thru earlier.

Thanks,
John

John Wheatcroft said...

Stops - nasty question. There are sixty three thousand ways to set them but what they all come down to is = how much risk do you want to take? There is no good hard and fast rule to follow. I'd just use a dime per decile after the first dime. So for 1 to 10 dollars it would be a dime and then add a dime every increment after that. So a 20 dollar stock would have a 30 cent stop and so on.

But again that's just a rough rule of thumb and the only thing that matters is how you feel about the trade.

Anonymous said...

Stops are what every trader has to figure out on their own. Mine are always based on technical levels. I ask myself the question, "at what point was this trade be invalid?"

That is where I put my stop. A lot of times it is the opposite extreme of the candle I enter, other times it is another technical area - for example, a swing high or low, a re-cross above an OR high/low, etc.

I don't agree with just arbitrarily putting a fixed stop on every trade - for example, .30. It doesn't make sense. You have to look at the point where the trade is not longer valid, then adjust your position size accordingly like X talks about in his Money Magt rules.

TJ

KayakHandy said...

Hi John,
Normally you would be right and .27 cents would be the logical stop if you only use the 15 minute charts.

However, many times I use the 3 minute and 1 minute charts also to get an okay entry and tight stop. This backfires on me sometimes also, I think we all get whipsawed every now and then.

In (volatile chopppy markets) like we have seen since May 11th" 'I like to keep my stops very tight on long positions and I loosen them up a bit on short positions. The reasoning is stated above...choppiness(is that even a word)LOL.

I find that in choppy markets" 'short positions tend to be much more fluctuant than long positions. So I look to the left on charts and kind of figure a quick average(if there seems to be a pattern of the near past) of high and low valleys and guesstimate where a good stop would be.

On long positions in choppy sea's I try to set tighter stops...it's just a risk control factor that I use. In very bullish low volatile markets I open the stops up quite a bit. Many traders would tell you that I am NUTS for opening the stops up a little more on short sales but I have found that I get whipsawed much less often and the positions reverse back to my favor in choppy markets. The same holds true for highly fluctuant stocks that look like they are about ready to break down to oblivian.

In the case of GILD my order was filled on the 13th minute bar of the 4th fifteen minute candle at a price of $62.97... I used the 9th or tenth minute bar low of the 4th fifteen minute candle to set the stop at $62.87 for .10 cents risk.

It was a very bullish day in a choppy market. I could have set a loose stop but I know how fast things can change during Options experation week.

One other common method that I would use on a trade like GILD to set a tighter stop would be like this. Using the 15 min. chart... The engulfing bullish but low volume third candle range was from 62.70 to 62.95" 'a .25 cent range.

I would divide that .25 cents by 2 = 12.5 cents, then round up to .13 cents. Now subtract that .13 cents from the high of the third 15 min. candle, 62.95 - .13= $62.82. That $62.82 would be a logical place for a stop but we are not done yet.

Most people think in round numbers so they may place a limit order as low a $62.80 that might get matched and filled by some bastard specialist" 'so I would go lower by .03 - .04 to 62.77 or 62.76 for the stop.

Okay now our order fills at .02 cents higher than the the third bar at $62.97" '62.97 - 62.77 = .20 cents risk" 'get the picture? still .07 cents tighter per share than the logical .27 cent stop.

It takes hundreds of times longer for me to write this than it does to figure in your head and make the trade...Hint" 'I prep the orders and use alerts whenever possible to make life easier. when using 15 min. and 30 min. charts this is very easy to do but when going down to 3 and 1 min. charts it can be a pain in the butt and you have to be quick.

Helpfull hints: Examine some charts of bullish and bearish stocks, look to the left and make pretend long and short trades on both types" 'keep an eye on volume spikes to see where the Pros get in and exit" and where good spots for stops are. You will learn alot from this exercise.

Hope this helps.