Archive through July 19, 2007

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gdd3

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Post Number: 122
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Thursday, July 12, 2007 - 03:34 pm:

Thought I would start a new thread here for interested short and medium traders(say 2-20+ day positions)who follow the Traders Action Zone Set-up method for entries. For those who may want to view a very good and concise overview of this method of share trading you may want to look at the following links:-

http://www.swing-trade-stocks.com/

I'll start the ball rolling by attaching charts of 2 stocks that today are giving buy entry point confirmations basis the primary criteria entry conditions as outlined in that link. Coincidently, both stocks are giving their secondary entry points after their initial buy signals about a month ago; and also are both entrants in this weeks "Weekly Stock Picking Comp".

Have a look at AIM and FAR and see for yourselves. Firstly AIM... a close above 36c will confirm entry conditions with initial stop below yesterday's candle low!:-

Secondly, FAR....a close today above 16c with also confirm trading entry conditions with a stop below yesterdays candle low.

Comments, especially contributions(maybe other stocks that satisfy these conditions), welcome.

DOLPHIN

poptop

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Post Number: 423
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Thursday, July 12, 2007 - 04:23 pm:

interesting reading, gd. thanks for that

AIM and FAR performing well today

gdd3

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Post Number: 124
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Thursday, July 12, 2007 - 06:28 pm:

You're welcome, Poptop....only too happy to share knowledge with fellow traders, especially for "Sandgropers"...but a Bulldog supporter???? Hey I know a few "NICK's"(friends and fo)over here but not any that are Bulldog supporters. Still no one's perfect, right,....a bit like the set-ups I have highlighted in this thread.

Cheers
DOLPHIN

tryhay

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Post Number: 685
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Thursday, July 12, 2007 - 07:40 pm:

Hello DOLPHIN,

Trading Action Zone Set-ups is a great enterprise! I have a couple of shares FWIW.

RRS (RANGE RESOURCES LIMITED): Seems to be some problem with options but SP seems set to rise to ATH ~ (say stop at ~ 81.5c)

rrs

And BKY (Berkeley Resources): Broken out and may be going into a new channel ATH ~ (say stop around $1.95).

bky

adzman

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Post Number: 80
Registered: 08-2005

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Thursday, July 12, 2007 - 09:20 pm:

Hi gdd3

Thanks for the charts.Do you think it is vital that these secondary swings need to be accompanied by higher volume than what is shown (for both AIM and FAR) as confirmation that the uptrend in continuing?

adz

gdd3

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Post Number: 125
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Thursday, July 12, 2007 - 11:11 pm:

Hi Tryhay and Adz....Thanks for your responses.

Firstly, Tryhay...RRS actually gave set-up entry points back on June 22 and July 2nd because it satisfied all of the major requirements of this strategy:-
1/. ...Trading action prior to then was between the 10 and 30 day moving ave's.
2/. ...Price action had closed below the 30 moving ave.
3/. ...Williams %R was below -80 the day B4 and turned up on the day.
4/. ...candle on entry days had taken out the high of the previous day's candle...and,
5/. ...the volume on the entry day was HIGHER than the set-up day(previous day)...Hey, Adz, this will partly answer your question!

See chart below...

Now BKY, if you look at the chart below satisfied 4 out of 5 set-up criteria( No. 3 above ...Williams %R...was not down below the -80 zone). However, I have noticed that this is often the case in a stock that has run hard(like BKY did from the 13 of June to June 22nd with out having a corrective day in the run. In this case I pay more attention to the -50 area, or any upward trendline support on the higher lows of this indicator, if the other criteria requirements are in place.

Adz...the answer to your question regarding higher volumes really lies in point No. 5 under the RRS comment but I would add that tomorrows action should be even higher.

Cheers guys...

Dolphin

gdd3

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Post Number: 127
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Friday, July 13, 2007 - 08:46 pm:

TAM is another stock that appeared to satisfy the T.A.Z. set-up and entry conditions...actually on July 5th... but gave further confirmation in today's action(as we hadn't been stopped out from that initial entry day.

Initial entry should have been on Jul 5th as that day and the previous days action satisfied all criteria giving an entry at 28c with the initial stop below 25.5c(low on July 4th). As we have not taken out that low since and after today's action we can bring our stop up to, say 26.5c(1c below the high of yesterday's bar(July 12th). Further confirmation will come if Monday's action goes higher than today's high.

gdd3

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Friday, July 13, 2007 - 08:50 pm:

Sorry, that ofcourse was TMR not TAM! Although I must admit she(TAM) is also in an interesting position!

DOLPHIN

adzman

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Saturday, July 14, 2007 - 12:30 am:

Thanks for the link gdd3. Interesting reading.

I have today printed off most of the webpages I need and will have a good look this weekend and post a few of my picks that fall into the "TAZ" guidelines.

Cheers

joshua

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Saturday, July 14, 2007 - 11:47 pm:

Thank you for sharing that link, DOLPHIN.

poptop

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Sunday, July 15, 2007 - 06:54 pm:

It's messy, but I wonder if it would work on a weekly time frame using 10 and 30 week moving averages

gdd3

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Monday, July 16, 2007 - 02:15 am:

Hi Poptop...
Interesting thought but I have my doubts. However, as I never really considered the T.A.Z. in anything other than a daily time frame I willing to accept that you couldn't rule it out completely....just make sure all supporting indicators and volumes are also in weekly time frame.

Having said that here are my concerns, particularly with reference to your example posted, DON.
1/. Remember, the 10 day and 30 day M.A.'s relationships are only one of the 5 criteria required in the set-up. To have all the other criteria(see my post July 12th at 10.11pm above)may not come about all that often...especially the Williams %R below -80.
2/. If you do get all the criteria in sync you have to wait for Friday's close to strictly wait for confirmation....ie, there are going to be many occasions during the week that, I.C. weekly charts for example, are going to show that all criteria are in place BUT THE WEEK HASN'T FINISHED YET so those indicators are only saying IF WE DO FINISH AT THESE LEVELS ON FRIDAY it will be thus! Hence confirmation can only be given at the close on Friday!
3/. The T.A.Z. set-up is designed to assist in entry and exit strategies with "managable" stops and utilising a trailing stop exit once in the affirmative. I think by applying the same stop principles to a weekly bar chart would mean wider stop necessities(if you were going to follow it to a tee!)...but, hey that may be more acceptable to some traders?? Just have a look at the two examples(DON & TGS) I have attached to see for yourself.
4/. I think a real problem would be that you may have to more flexible with the Williams%R indicator and not be particular on the -80 rule...may -65 or even -50 once the market is trending. Who knows?

Anyway, lets have a look at DON first:-

The "1st possible buy", back in Nov 06 had some reservations...(a) Williams%R not below -80, and (b)the 3 preceeding bars had closes below the 30period M.A. However, it has produced the best result only stopping you out in Jan. 07("sell").
The "2nd buy" in March was stopped out in April but again we had to "fudge" our entry rules as the entry candle had less volume than the set-up candle.
The "3rd buy" is probably the best so far...but, if we are to apply all entry criteria, we would be in only at 38c(the high for last week) but our stop should still be below 30c. Yes, sure you could argue that maybe you could have entered earlier once we took out the 34c high of the previous week but the volume for that week was less than the set-up week. Anyway, as I said, it this buy is the best(mechanically) of the 3 buys.

Have a look at TGS Weekly, to maybe give you some confidence to pursue this a bit more(Note that I have drawn what I think has been 3 good structural buy zones for this market over the past 2 years):-

Buy 1 and 2 produce good moves B4 being stopped out(trailing stop method).
However, what I have shown as a "3rd buy" wasn't stickly a "buy" because not all criteria were satisfied(more than 3 days below 30 period M.A., and eventually a -ve crossover of the two M.A.'s BUT it has produced the best move so far if, again, you entered by fudging the rules. Having said that, a Daily Chart of TGS has given you 3 entry points since that "3rd Weekly Buy...No!" area, two being stopped out with 1 point loss but the 3rd is still active from last Monday's open at 62c.

This has been an interesting exercise, Poptop, but for me I think I will be sticking to the Daily format as I think there are too many varibles using the weekly time frame, and if you are looking for a truly "mechanical" application for this strategy set-up it appears there has to be some adjustments(and a bit of fudging) to be made. Any, I hasn't to add, I like to have "tighter" stops initially that a Daily Chart provides to give me a better risk/reward ratio.

Have a great week!

DOLPHIN

adzman

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Monday, July 16, 2007 - 08:40 am:

Hi fellas

Good reading dolphin. I have had a quick read only and will need to go over a few more times and take some notes but I like the simplicity of this discipline.

I am going to paper trade this system for a while to see how it goes.

Here are my thoughts on 4 stocks that are in the zone, and have posted one that has already bolted after seeing your original post mid last week (MWE) which would have been winner if I had the spare cash. They are all in the materials sector given the sector is displaying good relative strength.

I am sure one could pick this to pieces and welcome comments to learn. Maybe the candle setup for entry are not right??

CVN
1) Retracement on low volume, doji on support. Correct candle setup?
2) Within 10 and 30 day SMA
3) Williams turning up
4) Support at 19c (stop loss at 18.5). Has retrace more than 60% noted on chart (bad calculation) and possible head and shoulders?

I suppose this now needs increase in volume to confirm entry.

MLI at 50% fib retrace and at support, needs volume though. Willams turning up from below 80.

TNG, similar to MLI with doji and hammer at 50% fib level retracement. Williams turning up from 80. Do we need another higher low to confirm entry here?

RSP has the volume after hitting support but Williams is sideways. Does it need a higher low today for an entry?

MWE below has already bolted but is a good example I think of a TAZ set-up.

Cheers

Adz

gdd3

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