Thursday, 27 March 2008

Trades 27/March/2008

Watchlist:
ALL,AUY,AZ,BHP,CAG,CCU,CTRN,DRYS,JASO,LII,NVS,ORCL,PHH,
RBN,SAP,SCHL,SPWR,SRE,STP,STX,UBS,UTIW,VLO,VRTX,WSM,XL

I didn't find much to trade today, but all it takes is one good winner.

PHH (gap down)

Very weak first candle is followed by a green doji like small candle. The 3rd is a weak red candle which breaks the OR and closes weak. This is our trigger for short.

Entry: 17.28 Stop: 17.65
Fib Ext: 16.78
1R=16.91 2R=16.54 3R=16.17

After entry we just went sideways with choppy action for the rest of the day. We never closed above the OR so there was no reason to exit the trade. We closed our postion at end of the day for a small gain.

UTIW (gap up)

Gap up and a very strong first candle which blows by the previous day's high. After a quick look above the OR we retrace back into the range of the first candle. We then form a base and begin a climb with the ema providing good support. The 9th is a NR7 just below the OR. The 10th is a strong green candle which closes above the OR and also closes strong itself with ema close by. This is our trigger for a long.

Entry: 17.88 Stop: 17.62
Fib Ext: 18.42
1R=18.14 2R=18.40 3R=18.66

The candle after entry is excellent and adds to our confidence in this trade. It is bullish and closes strong above the next whole number. After that it is just a case of waiting as it trends up nicely. We take partial at the Fib Ext (around 2R) and leave the rest to run. I closed the rest of the position near the end of the day at 19.40 for an excellent profit.

SAP (gap down)

After gap down the stock is weak and breaks the OR on the 3rd candle which also closes weak. This is our trigger for a short.

Entry: 49.02 Stop: 49.38
Fib Ext: 48.20
1R=48.66 2R=48.30 3R=47.94

Starts ok as it falls after entry and we move to breakeven after 1R is reached. However then the stock reverses and we are stopped out at breakeven.

5 comments:

Victor said...

I can't believe you found UTIW. Super!!!

What is your est. success % (including paper trade) for entries far from 5ma like SAP, PHH.....?

TraderAm said...

Victor.

Good question.
I haven't done that sort of breakdown analysis (i.e. est success% of each individual pattern).
However having said that, I am constructing a performance table of my trades. This is taking a bit of time as i have lots of trades to work thru. But when I'm finished I will post it and add to it on a monthly basis.

Thanks

OONR7 said...

nice trades. I noticed UTIW didn't gap up above yesterday's high. Did it still appear in your scan? I more than likely nixed UTIW for that very reason and I'm curious about your thought process of what stays and what goes.

TraderAm said...

oonr7.

The gap scan I use is from IB (I think we have discussed this previously). There is no criteria I set to say that the gap has to be above yesterday's high/low.

It's just a list of stocks which have gapped. Around 2% or greater and vol>150,000 and price in range $15 to $180.

So from this list (which can be big) I go thru the charts in the first 15-20 mins after open. If the stock is trading within yesterday's range after first candle, then I discard it. If the stock has gapped within yesterday's range but the first candle is strong/weak enough to take it out of yesterday's range then I keep it on my watchlist.

It would be true to say that I prefer the stocks which have gapped outside the previous day's range and in fact these were the majority of my trades when paper trading and Jan this year. Recently though gaps like UTIW seem to be a more regular occurrence.

It's a numbers game as well as I only watch 20 to 25 stocks generally. Yesterday the gap up stocks from IB were limited in number, only a few had gapped past previous day's high, so this meant reading further down the gap list to find candiates. The gap down list was much bigger and I doubt I would have added the same pattern on a gap down as my "quota" would have been filled earlier.

I should mention that I always endevor to include both gap up and down stocks in my watchlist everyday.

Bit long winded, but I hope it makes some sort of sense :-)

OONR7 said...

yeah, I know where your scan is from, but we haven't really discussed the criteria for keeping or removing stocks from our list. I've grappled with whether I want to keep stocks just like UTIW or solely stick to stocks whose open is at least above or below the previous day's high/low. Frankly, I'd rather keep a small watchlist on certain days than have a long watchlist every day. With my rules, I would not have traded UTIW anyway but I may give stocks whose first candle is strong/weak and closes above/below the previous day's high/low a second look. Thanks for the detailed info.