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RE: Stage Analysis Beginners Questions - diaz - 2019-04-17
Hi Isa,
On the US stocks and ETFs watchlist you posted a chart for ARQL. I note that the 30W slope has just turned positive, relative performance positive, and volume looks slightly at the 52W average. This stock also came up in a screener I made recently (which is similar to scan you posted a long time ago), but in my trading software ARQL 200 day ATR came in at 0.28 so I didn't look more into the stock. Just wondering if you still took into consideration stocks which moved the most against their ATR?
Second question is that in my scan VIA came up which is part of DJUSBC. DJUSBC seems like it was in stage 4 since 2014 but VIA and some of the other stocks in the sector look like they've started to turn into early stage 2. I appreciate if you would share your thoughts on it, thanks.
Stage Analysis Beginners Questions - isatrader - 2019-04-17
(2019-04-17, 03:15 PM)diaz Wrote: On the US stocks and ETFs watchlist you posted a chart for ARQL. I note that the 30W slope has just turned positive, relative performance positive, and volume looks slightly at the 52W average. This stock also came up in a screener I made recently (which is similar to scan you posted a long time ago), but in my trading software ARQL 200 day ATR came in at 0.28 so I didn't look more into the stock. Just wondering if you still took into consideration stocks which moved the most against their ATR?
Hi diaz, one of the changes that I've made over the years is to use the 52 week ATR for both my position sizing and my stop loss maximum range. So for example, my maximum stop loss range is 2 times the 52 week ATR. So in the case of ARQL, the 52 week ATR is 0.604 currently, so 2x that would be $1.208.
Looking at the chart the most recent weekly swing low is $4.54, and the 50 day MA is $4.45. Hence, I'd set my stop loss just under the 50 day MA and swing low at about $4.39 and then add the maximum 2x the 52 week ATR size to that. i.e. $4.39 + $1.208 = $5.598
So looking at the current chart the price is 3.34x the 52 week ATR from my maximum stop loss position, and hence it would be a pass for me until it formed another decent swing low and consolidated enough for the 50 day MA to catch up, and then made a further continuation move that was in range of my stop loss.
(2019-04-17, 03:15 PM)diaz Wrote: Second question is that in my scan VIA came up which is part of DJUSBC. DJUSBC seems like it was in stage 4 since 2014 but VIA and some of the other stocks in the sector look like they've started to turn into early stage 2. I appreciate if you would share your thoughts on it, thanks.
It is in Stage 1B, but a few negatives that I can see are the near term resistance from 2018 to overcome, and the very low average volume. I have my scans set to ignore any stocks that don't have volume above 500,000, as I find thin stocks much more difficult to deal with and they tend to have higher spreads.
The 52 week ATR is $2.443 and the last swing low was $30.56, so maybe a stop loss position at $30.39, which would give a max distance from stop of $35.27. Hence with the Stage 2 breakout level at $37.55, the stock would need to consolidate/pullback first to form a higher swing low base for the stop loss position to be raised under before I would consider it personally. As I always consider the risk first these days, as think it's critical to minimise your losses above all else. So, I try to never get into a position that's extended past my maximum risk tolerance, even if that means missing out on stocks that look promising. As there's always other stocks around the corner.
I hope that helps.
RE: Stage Analysis Beginners Questions - Red Barron - 2019-05-05
In Ch. 6 of Secrets for Profiting, Weinstein talks about how to trail your stop. I noticed that when the stock is at the end of S2 or beginning of S3 that Weinstein often raises the stop before the price has gotten back to the previous high (ex. fig 6-23 stop at I and fig 6-24 stop at J). At this stage, it also seems like he raises the stop on minor dips, not just those that are significant (7% or more). Why do you think he seemingly veers from his guidelines during this stage, and without explanation I might add?
RE: Stage Analysis Beginners Questions - isatrader - 2019-05-05
(2019-05-05, 10:41 PM)Red Barron Wrote: In Ch. 6 of Secrets for Profiting, Weinstein talks about how to trail your stop. I noticed that when the stock is at the end of S2 or beginning of S3 that Weinstein often raises the stop before the price has gotten back to the previous high (ex. fig 6-23 stop at I and fig 6-24 stop at J). At this stage, it also seems like he raises the stop on minor dips, not just those that are significant (7% or more). Why do you think he seemingly veers from his guidelines during this stage, and without explanation I might add?
On page 185 he talks about this in the last paragraph, about getting more aggressive with raising your stops once a stock moves into this higher risk zone, where a potential Stage 3 top might be starting to form. So you need to learn to identify the early signs of a potential Stage 3, and should look to protect a position more aggressively when you do see signs of it.
RE: Stage Analysis Beginners Questions - cdahlstedt - 2019-05-16
I am having trouble with scaling in, in the book he sates that he puts in an initial position as the price crosses the 30MA then as the breakout occurs he waits until the pull back and then adds more as its going up to the previous high? does this sound right??
RE: Stage Analysis Beginners Questions-IBG.TO - briansmith456 - 2019-05-27
Hello all,
I was hoping some experienced traders could comment on IBG.TO (IBGI Group on TSX) as it seems to me it is breaking out stage 2 (above resistance and over 30 ema on weekly with good weekly volume). I have attached a chart.Â
Thank you,
Brian
RE: Stage Analysis Beginners Questions-IBG.TO - isatrader - 2019-05-27
(2019-05-27, 01:48 PM)briansmith456 Wrote: Hello all,
I was hoping some experienced traders could comment on IBG.TO (IBGI Group on TSX) as it seems to me it is breaking out stage 2 (above resistance and over 30 ema on weekly with good weekly volume). I have attached a chart.Â
Thank you,
Brian
The main negative that I can see is the very large amount of resistance overhead still. See Chapter 4 (page 96) for an explanation of why this could be a problem. As the Stage 1 base is quite small compared to the Stage 4 decline that it had in 2018. I'm not saying it can't do well or that you shouldn't buy it, as you should make your own decisions on trades that you place always, just that the method recommends focusing on the higher quality setups that meet all of the requirements from the book, due to the opportunity costs.
My recommendation would be to get rid of the MACD, RSI and weekly pivot point indicators from your chart, and add the weekly ichimoku cloud instead, as it will help you learn to identify where the long term and time based resistance is and clean up the price action so you can see it more clearly.
My personal preference is to never buy a stock that is still below the weekly ichimoku cloud (resistance), as it's often too early and means you may end up holding a stock for much longer while it chops around in a larger Stage 1 base or very early Stage 2. It doesn't mean that it won't be a successful investment necessarily, but due to the time required when there's large resistance, the risk of failure is higher, and often your money could have been better allocated elsewhere during the same time period (opportunity cost).
See the Stage Analysis Study Guide - Questions and Answers thread for detailed examples.
RE: Stage Analysis Beginners Questions-IBG.TO - briansmith456 - 2019-05-27
(2019-05-27, 02:39 PM)briansmith456 Wrote:(2019-05-27, 02:09 PM)isatrader Wrote:(2019-05-27, 01:48 PM)briansmith456 Wrote: Hello all,
I was hoping some experienced traders could comment on IBG.TO (IBGI Group on TSX) as it seems to me it is breaking out stage 2 (above resistance and over 30 ema on weekly with good weekly volume). I have attached a chart.Â
Thank you,
Brian
The main negative that I can see is the very large amount of resistance overhead still. See Chapter 4 (page 96) for an explanation of why this could be a problem. As the Stage 1 base is quite small compared to the Stage 4 decline that it had in 2018. I'm not saying it can't do well or that you shouldn't buy it, as you should make your own decisions on trades that you place always, just that the method recommends focusing on the higher quality setups that meet all of the requirements from the book, due to the opportunity costs.
My recommendation would be to get rid of the MACD, RSI and weekly pivot point indicators from your chart, and add the weekly ichimoku cloud instead, as it will help you learn to identify where the long term and time based resistance is and clean up the price action so you can see it more clearly.
My personal preference is to never buy a stock that is still below the weekly ichimoku cloud (resistance), as it's often too early and means you may end up holding a stock for much longer while it chops around in a larger Stage 1 base or very early Stage 2. It doesn't mean that it won't be a successful investment necessarily, but due to the time required when there's large resistance, the risk of failure is higher, and often your money could have been better allocated elsewhere during the same time period (opportunity cost).
See the Stage Analysis Study Guide - Questions and Answers thread for detailed examples.
Thank you kindly for your prompt response. This is really good advice you offer (I just started looking into the ichimoku charts but forgot to add for this chart. It clearly shows on the weekly the big cloud resistance which could make for tough slogging higher.)
I agree based on your comments this is not a great setup (sure it can go higher) as may still be to early in its basing phase.
Regards,
Brian