[isatrader]

TLW.L - Stage 1B. Potential for a Stage 2A breakout attempt above long term resistance

       

[Smellypunks]

TLW.L - Stage 1B. Potential for a Stage 2A breakout attempt above long term resistance

I saw this one differently to you. I saw May as a breakout and August low as point B which went a bit below the April low and 30w ave. A similar pattern on DLAR at the breakout.

[isatrader]

TLW.L - Stage 1B. Potential for a Stage 2A breakout attempt above long term resistance

I saw this one differently to you. I saw May as a breakout and August low as point B which went a bit below the April low and 30w ave. A similar pattern on DLAR at the breakout.

The A point you've marked up is too early imo, as it hadn't had enough basing time to work through long term resistance, as turned out to be the case. Yes technically it was a Stage 2A breakout attempt. But it immediately failed the following week and fell back into a Stage 1 and began to form a broader base, which it's now trying to make it's second Stage 2A breakout from. Plus the B point you've marked would have stopped out the A entry also.

[isatrader]

FPM.L - Another Stage 1B, with potential for a Stage 2A breakout attempt

       

[pcabc]

TLW.L - Stage 1B. Potential for a Stage 2A breakout attempt above long term resistance

I saw this one differently to you. I saw May as a breakout and August low as point B which went a bit below the April low and 30w ave. A similar pattern on DLAR at the breakout.

The A point you've marked up is too early imo,... <snip>

This is very interesting. I have third opinion and have been in TLW.L since the start of the month. See the chart below, look at the second arrow. The first arrow is from my virtual portfolio, please ignore. I viewed TLW.L as breaking out from a trendline in the beginning of the month.
   

As stated elsewhere I'm not doing as well as I was hoping so perhaps I'm trying to get into trades too early. And perhaps Isa's use of Ichimoku stands him in good stead. Understanding the reasons for the divergent opinions might be educational.

[isatrader]

This is very interesting. I have third opinion and have been in TLW.L since the start of the month. See the chart below, look at the second arrow. The first arrow is from my virtual portfolio, please ignore. I viewed TLW.L as breaking out from a trendline in the beginning of the month.

As stated elsewhere I'm not doing as well as I was hoping so perhaps I'm trying to get into trades too early. And perhaps Isa's use of Ichimoku stands him in good stead. Understanding the reasons for the divergent opinions might be educational.

I think as you can see from my posts over the years that when I started using the method (see the original thread on trade2win website http://www.trade2win.com/boards/technica...lysis.html) I also would have identified the same point as Smellypunks, and got in at that point many times. But as my research into the method developed over time I came to realise that the opportunity costs that Weinstein talks about in the book are critical for success, as you only have finite resources at your disposal in your portfolio, and so you need to utilise your money wisely. And I determined that the best way for me to do that was to try and focus on finding the best quality stocks that meet the four key requirements of the method. i.e. the price action setup; volume increase on the Stage 2A breakout week and following; strong relative performance versus the market and above a flattening or rising zero line, and the often forgotten resistance to get through.

As you know I find ichimoku clouds useful for visualising long term resistance on a weekly chart, for both levels and time based resistance. And favour always buying a Stage 2A breakout that occurs close to or above the resistance zone. As buying below it just gives you one more obstacle to get though and virtually all the best quality A+ setups occur above it imo.

Stage 2A breakouts often occur under the resistance zone, but unless the other three components are exceptional and showing A+ characteristics, then I wouldn't touch them these days. As TLW.L is a great example of why, as stocks that have had long Stage 4 declines will often rebound up significantly from their ultimate low, but then lose steam as they meet resistance from the people that suffered and held on through the entire decline and are attempting to get out even or for a smaller loss. that's when the real Stage 1 basing phase begins in earnest imo, as the desperate hangers on gradually get out and new people start to get interested in the developing base.

[Smellypunks]

This is very interesting. I have third opinion and have been in TLW.L since the start of the month. See the chart below, look at the second arrow. The first arrow is from my virtual portfolio, please ignore. I viewed TLW.L as breaking out from a trendline in the beginning of the month.

As stated elsewhere I'm not doing as well as I was hoping so perhaps I'm trying to get into trades too early. And perhaps Isa's use of Ichimoku stands him in good stead. Understanding the reasons for the divergent opinions might be educational.

Thanks ISA, I am going to be using Ichimoku Cloud going forward. It looks like it would have saved me on PSON which I put into my daughters ISA a few weeks back.

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MYSL - is making a point B pull back.

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LPA - making a continuation breakout after moving sideways for two years.

[pcabc]

I think as you can see from my posts over the years that when I started using the method (see the original thread on trade2win website http://www.trade2win.com/boards/technica...lysis.html) I also would have identified the same point as Smellypunks, and got in at that point many times. But as my research into the method developed over time I came to realise that the opportunity costs that Weinstein talks about in the book are critical for success, as you only have finite resources at your disposal in your portfolio, and so you need to utilise your money wisely. And I determined that the best way for me to do that was to try and focus on finding the best quality stocks that meet the four key requirements of the method. i.e. the price action setup; volume increase on the Stage 2A breakout week and following; strong relative performance versus the market and above a flattening or rising zero line, and the often forgotten resistance to get through.

I may be impatient on the price build up. I may be mistaking the rapid rebound after a long stage 4 that you mention later as the time I should be in, as stage 2A, not part of stage 1.

Volume is a tricky one. It seems only to give clear signals on smallcaps and smaller. But here spreads are higher and on the very smallest as well as volatility is large and liquidity is limited. I've tried using a volume oscillator as used by the TRENDadvisor method, but I'm not sure if it is quick enough for rapid breakouts. I ought to look into this more but I wonder if the signal is well buried in noise nowadays?

A couple of issues regarding opportunity costs, I've not been good at banging out if volume does not clearly confirm over the week following the buy. Also I've noticed that I have had some good risers that don't generate significant pullbacks to generate close stop loss positions or good trendlines meaning I have stocks 20+% above their stop loss positions. When stocks start going sideways I can be stuck in them a long time either waiting either for a continuation or to wait a long time to loose a large proportion of the profits to date. This was particularly evident with my gold miner positions earlier in the year. I made good gains but I had to wait a long time going sideways and make significant drops from the peaks before stop loss positions were hit. Perhaps this is just the way it goes sometimes.

I prided myself in producing a close approximation to the Mansfield Releative Strength. However, I notice you plot the Relative Strength overlaid with a long term MA of the Releative Strength as your zero line. Also noting that you have discussed this with Stan Weinstein (result!) with the rising 'zero' being a sensible criterion. I'll have to give that a go.

As you know I find ichimoku clouds useful for visualising long term resistance on a weekly chart, for both levels and time based resistance. And favour always buying a Stage 2A breakout that occurs close to or above the resistance zone. As buying below it just gives you one more obstacle to get though and virtually all the best quality A+ setups occur above it imo.

I've not used Ichimoku myself. I've reviewed my current positions and some recent failures. TWL.L was virutally an exception. Most other picks were above the cloud when I got in. Although one or two, e.g. RIO.L, should have been bought later as that one was within the resistance. Something I have observed is that if the top edge of the cloud is support then I've got into some positions well above that support. Unsure if that is important. Ichimoku is something to add to the screener.

Stage 2A breakouts often occur under the resistance zone, but unless the other three components are exceptional and showing A+ characteristics, then I wouldn't touch them these days. As TLW.L is a great example of why, as stocks that have had long Stage 4 declines will often rebound up significantly from their ultimate low, but then lose steam as they meet resistance from the people that suffered and held on through the entire decline and are attempting to get out even or for a smaller loss. that's when the real Stage 1 basing phase begins in earnest imo, as the desperate hangers on gradually get out and new people start to get interested in the developing base.

TLW.L is on the top edge of the weekly cloud, so no point in selling right now unless there is a rapid drop, it looks like it might break through the resistance. Wait and see.