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Watchlist stocks -> what time of day to enter? - bluemosaic - 2014-09-03
With your watchlist stocks, how do you manage them from watchlist to purchase?
For example, Dixons CarPhoneWarehouse has gained 3 pts today and I am looking at it just after the market has opened thinking 'should I order now or wait for the market to settle nearer 11am UK time or wait until almost close to see what volume was like for the day and then open the order. I am thinking latter .
I could put an order in for the buy but then you cannot determine volume and also the spread at that time of day may be wide
Thanks!
RE: Beginners Questions - Tryst - 2014-09-03
(2014-09-03, 07:24 AM)MalcolmSm1th Wrote: But in this instance I see a recent high that the price has dropped behind and I would wait until it was breached. I have never personally had any success with buying on pullback and in most of my cases they end up as Buying On Forthcoming Meltdown.
- Malc
For the record, I am not in this trade. It was just a question to understand peoples take on trade management.
Re. above, 'Buying ON Forthcoming Meltdown' is that a quote taken from somewhere? That is a exactly the fear of buying on a pull back. I guess, and as Isatrader commented on, all the boxes must be ticked to minimize the potential of butting on meltdown.
What I have also found when looking at the continuation charts that Isatrader has posted on the UK sections is that the ones that do break out (in a continuation of stage 2 and not from a stage 1) and then fail/meltdown are ones that are a bit later in their stage 2 advance.
There is no perfect solution to this I don't think, and a lot of it is down to getting the preparation part of it as best you can, but then when in the trade you have to be nibble and proactive to come when you think you need to. A lot to do with intuition too.
RE: Beginners Questions - MalcolmSm1th - 2014-09-03
To be honest it's a quote from my log book. I may have nicked it from elsewhere without knowing about it.
To ne honest I am finding the Weinstein methodology hard, but that's more my make-up being an Aspie as I am finding the rules hard to fathom out. Yes, I get the general gist of it but when it comes to pulling the trigger or jumping out find that I am having questions about the method ("Does this mean that I should do that, or does that indicate this? What does this grey area mean?") but I am following every thread and have, somewhere, all the printouts so I am trying to learn.
Anyway, those two books which you recommended: I do thank you very much for that especially as they are helping. They're just another variation on the theme and from these books I am able to transcribe a set of rules for myself. And because of this I am able to enter the markets with more confidence and a little more success at the moment.
Intuition is a good thing as well. I am finding I am getting more reliable at trying to figure out as to what's going on. This is perhaps down to practise rather than intuition. Trying to work out the story behind that tick for that day or that week is helping a lot with the context of a share's price movement. Which, of course, is independent of any methodology.
Anyway, when I have time I intend to make a screener set of routines for ShareScope but, at the moment Real Life is in the way. When I get that done this is will be with, iniially, the Morales and Kacher methodology (if this isn't heresy) and then I would like to get what I feel are the Weinstein screeners in as well and, if it's permitted, I would like to post them here on the Members' Section because I know that I am not the only ShareScope user on here.
Right back to Real Life.
Hwyl
Malc
RE: Beginners Questions - theory6453 - 2014-09-03
(2014-09-02, 10:42 PM)Tryst Wrote: What Theory6453 touches on, with the stocks that rise sharply, the 10 week MA is what acts as the path of support. From what I am seeing, the first touch of the 30 week MA is potentially the start of a stage 3 forming, which could then be a continuation of stage 2.
Hey Tryst... Just wanted to comment on what you said about the 10 wma = support and 30 wma = start of Stage 3... I think that can happen in some cases however imo I wouldn't look to that as any type of rule.
I've attached a chart of SNXFX. This fund is up around 60% over the last 2 years and has broken the 10 wma multiple times and either touched or come close to touching the 30 wma multiple times while still continuing to climb higher and higher.
I got "tricked" into thinking this same thing last year when I read Jesse Stine's Insider Buy Superstocks and his concept of the 10 wma being the "magic line". I can tell you from experience that this magic line was violated just as often as it held. Not to say that the 10 wma won't often offer support, b/c it definitely can and will sometimes... just saying be careful and imo don't stick to that as a hard and fast rule.
What I'm thinking about now is potentially developing some kind of ratio between the 10 wma and 30 wma so if the difference between the 10 wma and 30 wma is greater than say 15% or 20%, then maybe I will use the 10 wma to set my stops... and otherwise I will use the 30 wma. I still need to think it over a bit before deciding if this is something I would like to implement, but this discussion is driving some great ideas and conversation and I'm really enjoying the dialogue.
Cheers,
Mike
RE: Beginners Questions - MalcolmSm1th - 2014-09-03
In the books that I have been reading (the Morales & Kacher ones) they've said something that I fundamentally agree with. And that one is to treat the moving average line as a zone rather than an absolute and definite line.
Let something drift over it and don't worry. If it heads further south the next day then be more concerned about it. In other words let the thing breach the line but if the next day it continues to do so then it's time to get out.
I have always done similar then making trend lines or lines of support or resistance. I purposely get sloppy with I throw those lines onto the page and I don't get hung up with the fact that my line goes through a price line or just misses it. It's a zone thing as M&K say which I have always subscribed to.
An example is one of my stocks that I own was Evraz (EVR.L). That plunged down through the 10MA yesterday and as such I haven't been in a rush to get out as I would have done years ago because yesterday was the first time it fell below the line. It was noticed that it's gone below the line and now today it's recovered (I guess that either peace has broken out in the Ukraine or Abramovitch is selling steel to make Russian tanks) from that drop and rose today to get to what will be this year's high mark.
Hwyl
Malc
Malc
RE: Beginners Questions - Tryst - 2014-09-03
(2014-09-03, 02:07 PM)theory6453 Wrote: What I'm thinking about now is potentially developing some kind of ratio between the 10 wma and 30 wma so if the difference between the 10 wma and 30 wma is greater than say 15% or 20%, then maybe I will use the 10 wma to set my stops... and otherwise I will use the 30 wma. I still need to think it over a bit before deciding if this is something I would like to implement, but this discussion is driving some great ideas and conversation and I'm really enjoying the dialogue.
That is a good idea actually. The space between the MAs and the sloping angle of the MA could potentially increase the probabilities of knowing which MA will act as support. I am going to load up my laptop and post a chart on L.CEY in a moment as it had a relatively strong recent run up and that halted with a technical pattern (double top) and corrected around 15/20% right down to the 30 week MA Where it has since reversed and gained 10%.
One thing I have noticed with equity charts, esp on the LSE, is that they are heavily based, technically, around the MAs, and less so on proper technical chart patterns.I was taught by a futures commodities trader and there that makes no use of MAs but is more technical patterns and trend lines (horizontal and sloping)
(2014-09-03, 04:59 PM)MalcolmSm1th Wrote: In the books that I have been reading (the Morales & Kacher ones) they've said something that I fundamentally agree with. And that one is to treat the moving average line as a zone rather than an absolute and definite line.
Let something drift over it and don't worry. If it heads further south the next day then be more concerned about it. In other words let the thing breach the line but if the next day it continues to do so then it's time to get out.
I have always done similar then making trend lines or lines of support or resistance. I purposely get sloppy with I throw those lines onto the page and I don't get hung up with the fact that my line goes through a price line or just misses it. It's a zone thing as M&K say which I have always subscribed to.
An example is one of my stocks that I own was Evraz (EVR.L). That plunged down through the 10MA yesterday and as such I haven't been in a rush to get out as I would have done years ago because yesterday was the first time it fell below the line. It was noticed that it's gone below the line and now today it's recovered (I guess that either peace has broken out in the Ukraine or Abramovitch is selling steel to make Russian tanks) from that drop and rose today to get to what will be this year's high mark.
Hwyl
Malc
I completely agree with what you say re. zones. I use them more so on sloping trendlines but you do see it on MAs. Buying or selling momentum can take the price beyond a MA or support/resistance line.
I have been watching EVR since isatrader posted that on this website recently. However, my chart of it shows that the 10 week MA was not breached and that the price rebounded just before the price touched the 10 week MA. See chart below. Can you please also attach your chart so I can? Are you using a simple MA which is based on the closing price?
RE: Beginners Questions - MalcolmSm1th - 2014-09-04
Oh my apologies. I meant the 10day MA rather than 10week MA.
To clarify I am using the simple moving averages.
- Malc
RE: Beginners Questions - Tryst - 2014-09-04
(2014-09-03, 07:27 AM)isatrader Wrote:(2014-09-02, 10:42 PM)Tryst Wrote: Hi all,
just touching a bit on what was last discussed here, knowing when to get out of a trade either in full or lightly, and how to use the MAs as a determinant.
Looks at the chart below of L.GLEN. Lets say that an initial trade was placed (a toe in the water so to speak) on the breakout of resistance at around 348 early July, now what would peoples next trade location be based on this chart? Would it be:
a) the next touch of the 10 week MA?
b) the retreat on low volume back to support (prior resistance)?
c) or something else?
Personally, I'd say c) in this case as although GLEN.L broke out into Stage 2A; it did so on only just slightly better than average volume, and then there wasn't any improvement in the week following, and then it pulled back on similar volume on the third week after only making a tiny bit of headway. So that's not the kind of price action I'm looking for, as I want to see a stock explode out of the gates at the Stage 2A breakout point on heavy relative volume - 2x the weekly average is a minimum requirement. Ideally you want to see 3x average weekly volume or much more even as you've got to always be considering the opportunity costs of each trade. You then want to see the stock trade higher for multiple weeks.
Hi Isatrader, do you ever see this kind of volume multiples on FTSE100 Companies? So breakouts on such mammoth equities still brings with it 3-4x volume?