[Red Barron]

Since the question just came up, I thought I would post this here- What do you guys think about a pullback entry. I'm not sure as it has already breached support..but, I like what you said ISA about waiting for a higher close tomorrow than today's high. I usually just play it by ear as watching the broad market as you said isa but generally pull the trigger without waiting for a definitive close above previous high. I haven't been around very long so it is nice to read that tip-

Hi Locked in, attached is an example of what I was talking about, using the weekly and daily chart of HAL. I can see two potential pullback entries using the method I suggested in the previous post, where it pulled back to the Stage 2A breakout level at 38 and made a swing low. There where other times earlier in the pullback when it also made minor swing lows, so as I said before it's going to be a judgement call, and will need to take the broad market into consideration as well.

As this is an investor method pullback to the Stage 2A breakout point, the stop loss would have been way down below the prior major swing low, as it's not moved up until price moves up to the swing high following the breakout, which was at 43.96, and so would have only been raised in the last week below the final April swing low.

So using this example, I'd say your GREK etf hasn't given a buy-if candle yet, as it's still making lower closes, and first needs to make at least a higher close than the previous day.

I hope that makes sense, and is one fairly simple method. But I think it might be worth doing some swing trading entry research, as this is one of those grey areas that the book doesn't give any guidance on.

On the daily chart, checkout the candle you identified as the 2nd pull back entry. Why couldn't the candle before it qualify as the 2nd pull back entry? It is green and its close is higher than the previous day's high. Did you disqualify it b/c its tail touched the breakout line? https://stageanalysis.net/forum/attachment.php?aid=1300

[badcharts]

Hi,
I'm seeking guidance for volume on break downs.

Stan says fear is the volume. But I seem to often see good volume on weekly breakdown candles. I like this as I can apply the triple confirmation on stage 4 start.

What are your thoughts?

Regards,

Patrick

Hi, I just started use PreRealTime, the only free charting website that I could figure out how to plot out all the additional indicators that isatrader recommends for a weekly chart (30MA, a couple simple moving averages, Mansfield Relative Strength Performance, MA for Relative Strength, Force Index, MACD). Weinstein uses weekly charts (weekly frequencies/periods). Do you use weekly charts just to do the initial screening and then switch to daily charts when you get close to making the trade/placing the order? If so, what are all the indicator settings you use for a daily chart? The problem I have with weekly charts is the volume indicator. According to Weinstein, the volume on breakout should be at least double the average volume of the previous 4 weeks. But how do you calculate that accurately when the stock is breaking out early or mid week? So early in the week, the volume for that week is unlikely to be double the average of the previous 4 weeks.

You can see the chart settings for weekly and daily on the following thread: https://stageanalysis.net/forum/showthread.php?tid=47

On the other questions, it might take a bit of reading through the threads, but they have been discussed in quite a lot of detail over the years so is worth looking for.

For a quick answer on the volume. If the breakout is early in the week I estimate what the weekly volume might be by the end of the week based on the days volume. The daily volume on the breakout should be at least 3 times the daily average anyway (I use 200 day average volume). So that is usually more than half the weekly average when that happens or even better more than 2x weekly average on that single day, so there a good chance it will make it to the 2x weekly requirement if strong on the breakout day as money tends to follow money, and if it doesn't it a good sign to take an quick exit, as you only want to be in the stocks with A+ potential. As opportunity costs are key.

[isatrader]

Hi,
I'm seeking guidance for volume on break downs.

Stan says fear is the volume. But I seem to often see good volume on weekly breakdown candles. I like this as I can apply the triple confirmation on stage 4 start.

What are your thoughts?

Regards,

Patrick

I may be wrong, but I remember in the past Stan saying that volume on the Stage 4A breakdowns was a less important consideration than on the Stage 2A breakouts, and initial breakdowns are often shorter and sharper than breakouts. However, volume is one of the critical components of the method, so it always helps to see an appropriate increase.

[badcharts]

HI Isa!

Thanks for your input.

Reasuring.

Regards,

PAtrick

Hi,
I'm seeking guidance for volume on break downs.

Stan says fear is the volume. But I seem to often see good volume on weekly breakdown candles. I like this as I can apply the triple confirmation on stage 4 start.

What are your thoughts?

Regards,

Patrick

I may be wrong, but I remember in the past Stan saying that volume on the Stage 4A breakdowns was a less important consideration than on the Stage 2A breakouts, and initial breakdowns are often shorter and sharper than breakouts. However, volume is one of the critical components of the method, so it always helps to see an appropriate increase.

[isatrader]

On the daily chart, checkout the candle you identified as the 2nd pull back entry. Why couldn't the candle before it qualify as the 2nd pull back entry? It is green and its close is higher than the previous day's high. Did you disqualify it b/c its tail touched the breakout line? https://stageanalysis.net/forum/attachment.php?aid=1300

Hi Red Barron, sorry for the slow reply, I was away on a skiing trip last week.

Don't be too literal with my markups, as I'm far from perfect and are just my estimations.

If you read the brief Q&A I did with Stan on the following post https://stageanalysis.net/forum/showthre...623#pid623 you'll see that all he says is that he suggests doing secondary buying when a stock pulls back close to the breakout point, and you then see it stabilize near that level. - which can be interpreted in multiple ways. For me I like to see two days of higher lows following a pullback for a bit of additional confirmation that it's stopped declining in the short term, but others may have different ways. So the method is a bit ambiguous on this, and it's up to you to decide when you think a stock has stabilised or not on a pullback.

Another technique I've been using for this is to go down the timeframes to a 2hour chart and use the weekly stage analysis chart settings on that time frame and wait for a Stage 2A breakout on the 2 hour timeframe with a good volume increase of course on the new breakout. This has been a good technique for me as has kept me out of some stocks that went on to have deeper pullbacks or even continued declining. A recent example of this 2hr chart pullback technique is AZ.TO - which as you can see, had good bounce in February that might have encouraged you to enter as a pullback entry, but as you can see it continued declining back towards the swing low again over the following weeks, and has now rebounded again. Now if you go down the timeframe to the 2hr chart, you'll see that it's now formed a Stage 1 base on that timeframe. So as you can see, this technique would have kept you out of this stock for the last month while it's still churning. But would get you back in with a low risk entry point if it went on to breakout again on the lower timeframe.

           

[Red Barron]

Thanks for the reply. Skiing in the Alps in March sounds awesome. I'll have to study that new technique you're using to confirm pullback entries.

You posted a couple weeks ago that you like to make sure a stock is above its Ichimoku cloud, on the weekly chart, before before buying it. Using that standard sure does eliminate a lot of stocks from consideration, especially those breaking out into Stage 2. Standard settings for the Ichimoku indicator are 9, 26, 52. I think I read somewhere that those settings are applicable regardless of the chart you're using. However, using those settings for a weekly chart will yield a cloud that is at a very different level than on a daily chart. Also, changing the time frame of the chart also changes the cloud. For example, displaying a 3 month chart vs a 1 year chart.

What Ichimoku settings do you use for the weekly and daily charts? Do you change the settings if you change the chart's time frame?

Thanks

[isatrader]

Thanks for the reply. Skiing in the Alps in March sounds awesome. I'll have to study that new technique you're using to confirm pullback entries.

You posted a couple weeks ago that you like to make sure a stock is above its Ichimoku cloud, on the weekly chart, before before buying it. Using that standard sure does eliminate a lot of stocks from consideration, especially those breaking out into Stage 2. Standard settings for the Ichimoku indicator are 9, 26, 52. I think I read somewhere that those settings are applicable regardless of the chart you're using. However, using those settings for a weekly chart will yield a cloud that is at a very different level than on a daily chart. Also, changing the time frame of the chart also changes the cloud. For example, displaying a 3 month chart vs a 1 year chart.

What Ichimoku settings do you use for the weekly and daily charts? Do you change the settings if you change the chart's time frame?

Thanks

I use the same standard settings on the weekly charts (see attached). But I'm only using it for the weekly charts as I'm using it to help identify long term resistance only. As for the timeframe changing the data, that sounds like a problem with your chart provider, as the cloud shouldn't change, and hence means that they are not including all the data depending on the timeframe you are using. But with the weekly chart you should have at around 3 years showing on the chart, so the data for it should be good enough, even if your chart provider is doing this.

   

[Red Barron]

Page 287 of the book mentions the "new high-low indicator". Stan much prefers to use this indicator when it includes common stock only. Anybody know where I can find this indicator/info for common stock only? Stan mentioned Investors Business Daily and MG Financial as sources, however, I'd like to get the info for free.