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     gdd3
Member
Username: gdd3
Post Number: 215
Registered: 09-2002Rating: N/A
Votes: 0
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| | Friday, November 16, 2007 - 10:59 am: |  
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Thought I would start a new thread here on a common trading pattern that a lot of conservative T.A.ers seem to like to identify as a possible "change in trend" set-up and confirmation?
That is, some sort of bottoming pattern has been confirmed ...either a double bottom, triple bottom or a false breakdown(knee-jerk low)...followed by a breakout to the upside of the bottoming pattern. BUT where to from here and how best? to trade when looking for that change in trend ...remember, from a conservative point of view. Nothing new here, just one trader's point of view(AND DEFINITELY A VIEWPOINT AND NOT TRADING ADVICE).
I'm calling it a "3 to 1 REWARD/RISK TRADING". By this I mean that if entry is achieved at about the "breakout" point on retracement(BLUE LINE) you could risk(WHITE LINE) a little as 1/3 of the possible/probable minimum target(PINK LINE). Have a look at the current positions of these three stocks...TAM, VPE and VLA... to illustrate potential trades. They represent similar bottoming? trading patterns mentioned above.
Remember, potential entry is around the BLUE line, stop below the WHITE line with a possible/probable exit point at or above the PINK line(the minimum trading pattern's measured move)...hence the 3 to 1 Reward/Risk trade.
TAM
VPE
VLA
Cheers
DOLPHIN
** Remember, this is just one trader's point of view and not to be interpreted as trading recommendation...make your own decisions!
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tbreak
Member
Username: tbreak
Post Number: 128
Registered: 06-2004Rating: N/A
Votes: 0
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| | Friday, November 16, 2007 - 08:32 pm: |
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Risk/Reward is a good thread to start. Apart from a Weinstein type setup for coming off the bottom of a stage 1. I am not sure how conservative it is in trying to pick a bottom.
I am tending think more and more these days charts patterns are just symptoms of what the condition of the stocks is. So why not jump aboard something that is moving in the right direction.
I'll traded ya, Your 3 picks for mine 
All 3 has been showing accumulation and I think there FA are pretty solid.
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gdd3
Member
Username: gdd3
Post Number: 217
Registered: 09-2002Rating: N/A
Votes: 0
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| | Monday, November 19, 2007 - 11:30 am: |
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Hi tbreak...thanks for your comments (and challenge). Wont accept to "swap" our stocks because yours are in an "unfair" position...i.e. the trend is clearly up!
I did state in my opening sentence in my earlier post,
"...a trading pattern...to identify a POSSIBLE "change in trend" set-up and confirmation". The emphasis here is on the word "possible". Allow me to clarify(and/or explain)in a bit more detail of what I was trying to illustrate.
A possible(short-term) 3/1 reward/risk trade can be identified once a stock has traded out of a "bottoming?" pattern, as illustrated, if the retracement(within a few days of the breakout) occurs back into the zones suggested. I should have mentioned that the breakout traded above the 150day moving average(dark blue line)...in VLA and TAM's case both have achieved close(s) above the 150 day MA...which I like to use as my long-term trend indicator. I'll also point out here that I concur with your comments that this maybe "bottom" picking stuff or a Weinstein Stage 1 set-up scenario as the 150day MA's have not yet turned up(rising as in your examples).
Tbreak, also, I hope you will see I was simply trying to illustrate a possible short-term trade scenario based on a "measured move" of a particular charting pattern(or as you correctly state...a stock's particular symptom at a particular time) to limited risk V's reward. I also liken this to Peter Stiedlemeiers(spelling?) MARKET PROFILE** analysis where he looks at possible market action within and outside "value areas" to identify possible/probable next directions(and often stating the % likelihood of the move occurring related to risk/reward) What happens at, around or after the measured move target(or indeed below the "stop" area) has been reached/breached is incidental. Or should I state, another picture to be resolved and considered....hence my lack of commitment to take up your challenge to "swap stocks".
Cheers
Dolphin
P.S....** MARKET PROFILE, to be fair to Peter, is a trading format designed, primarily, to trade the FUTURES markets (not Stocks and Shares) but I found it very useful in my Futures Trading days trading the SPI, Soy Beans and Bonds etc. and still find the "principles" useful in identifying what is perceived "value"(based on market action) in a stocks price.
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danielc
Member
Username: danielc
Post Number: 144
Registered: 09-2003Rating: N/A
Votes: 0
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| | Monday, November 19, 2007 - 11:53 am: |
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would like to add one i am in and has been mentioned in the same breath as WOR,code NMS really starting to break to the hi side. I think this is a great idea for a thread and really like the shape of all charts mentioned . am in IDL and have a big possie at an av of .56 , have just bought more at .74. oh here are a couple you might consider MLX great consolidation patten primed fr break out and AGM appears to be a possible 5 wave triangle before break out . There appears to be somthing going on between these two , common thread is nickel and same chinese partner and the tassy connection. best good idea for thread.
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tbreak
Member
Username: tbreak
Post Number: 129
Registered: 06-2004Rating: N/A
Votes: 0
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| | Monday, November 19, 2007 - 04:51 pm: |
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I am with ya gdd3, from your first post
"pattern that a lot of conservative T.A.ers seem to like to identify as a possible "change in trend" set-up and confirmation"
The conservative part confused me. Was thinking the way Colin posts in his diary might be one example.
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gdd3
Member
Username: gdd3
Post Number: 219
Registered: 09-2002Rating: N/A
Votes: 0
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| | Monday, November 19, 2007 - 06:52 pm: |
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Fair comment, Tbreak....I shouldn't have used the term "conservative". I mean, how do you define "conservative" anyway???? For example, short-term(S/T) to some(me for example) is a whole lot different to, say a Colin or a Peterloh, as you correctly point out.
I will say this though. In regard to my examples above, some, more aggressive S/T traders, may have "punted" and entered much earlier than I am suggesting...even as early as the first break above the first higher high or a crossing of the faster M.A.'s(i.e. market action is still within that pattern structure illustrated)....both entries not suitable to either of us I'm assuming.
As a bit of a laugh(at myself) I picked TAM for this week's entry in the Weekly Comp. and wouldn't you know it, it went down today and the other two, VLA and VPE, both went up!(VPE already has reached its measured target). Still, I did say its a 3/1 reward/risk trading...I just went for the apparent "risk" part of the trade scenario and should have gone for all three(if the comp. would allow it, ha! ha!) and I'd be in front!
Cheers
Dolphin
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gdd3
Member
Username: gdd3
Post Number: 220
Registered: 09-2002Rating: N/A
Votes: 0
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| | Tuesday, November 20, 2007 - 06:49 pm: |
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BGD and APG are maybe two more stocks that we may consider in this thread as both appear to have "double bottomed", bounced to close(s) above the 150day M.A. and now retracing/retraced back towards our "set-up" zones.
In APG's case the possible measured move is variable as the double bottom trading band could be represented by either the top brown line or the light blue line. I like the fact that it gapped above the six month downtrendline(yellow) which should provide good support and possible entry opportunity(if she pulls back again over the next few days). However, its now looking that APG wants to move forward above 12cents first though.
BDG...is now on watch for any further pullback to abt 33.5c for a possible entry trade.
Remember, light blue lines are 3/1 entry zones, brown lines...the bottom pattern measurement bands; white lines out "stop" warning trigger, and the pink lines represent our possible(minimum) upside measured move of this type of strategy.
Our previous submissions; TAM, VLA and VPE are all still active with VPE already meeting minimum "measured" move.
Cheers
Dolphin
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