My challenge for myself this year – starting with a very very small account, and having to deal with (or maybe not?), the PDT rules. There are ways around it, I’m employing 2 of those ways, but the trade sizes then must be kept extremely small. Doing a small account is something I’ve never done over my trading career, so there has been plenty to learn, and I’m really enjoying the challenge and the experience. All of this was discussed in the conference call recently. The way I’ve set this up and approached this, I am avoiding the PDT rules, small position sizing, but I do a lot of trades.
How do I keep – on a very high % winning basis – constantly/consistently finding/recognizing, and much more importantly then trading, the #1-5 top stocks of the day? – HARD WORK. Period. Many of these trades have been posted and discussed in detail, on the website. Are you studying studying studying these? If not, you do not deserve to succeed.
READINESS-TO-MOVE (RTM):
I have a system, strategy, approach which I had – recognized something, a pattern, repeating, then I started watching it, tracking it, developed it and honed it – and it took a long time, and I’m still honing.
On 4/5, VTL was by far the #1 stock of the day, up 200% at one point. Yet it was not on my stock list written up on 4/4 coming in for the day for 4/5, but it was added to the list before 9AM on 4/5. I was bullish. Period. FOR A FEW HOURS. Period. I did 2 buys and 3 sells. Up 11%, up 40% up 65%. And again very small positions, less than $900. Yet up over $400 on VTL for the day. How? Because I correctly recognized the RTM. And it’s a very volatile stock. It was by far THE strongest stock in the US…for a few hours. I love volatility, and very very strong trends.
As to the other stocks on the list – I will discuss those other stocks in a separate post, but that list coming in was – in 2 parts, part #1 had long positions in – XOG up 10% sold 1/2, ZYNE up 17% sold all, REPH barely up scratched, TYHT down 6%, I was actually up 10% in TYHT but did not take it and lost about 6%. Part #2 – I did not come in long – CVM the #3 stock of the day up 21%, MRNA bought the bko all time-high at 23.30 on Friday up 12%, and DNR up 9%.
Recognizing the winning potential of a technical situation:
Now as to VTL – there is so much outstanding discussion on the charts below – but why did I add it to my list? Because it met all my characteristics for a potential big runner. What are those characteristics? No one taught me this. I learned it 100% myself. It’s just about working hard. The point is that I believed the TREND was UP – strongly up. Period. And in hindsight, was that correct?………There were several bkos and pre-bkos during the day, incredible trading stock and beautiful setups. How many setups do you see? Do you even recognize any? If not, you have learned ZERO from my lessons.
And what did I say in chart #1?…….. So in hindsight, was I correct?…….. Then how to recognize that in real-time? Again, you either pay a lot of money to someone who’s outstanding at recognizing it, or you work your ass off and figure it out yourself. Or a combination of both I guess.
Chart #2, already took 1/2 profits, too soon like usual, but kept 1/2, still very bullish. So why then even have sold any?
And then when I saw what VTL did on the subsequent bkos, and the beautiful 1,2,3 reaccum, I firmly believed the trend was still strongly up, it convinced me it’s going to .74. Where did I get .74? – and realize it was around .47 when I targeted that. Truly great recognition, as it turns out.
So with all this, I decided to add back in at .4750, and YES that is a SPRING at the #3 low, and NO that red volume is NOT bearish, it’s bullish. And to the idiots who teach “green volume good, red volume bad”, they are CLUELESS.
Look at my comments in chart #3, great recognition of a CUP/HANDLE formation. And in hindsight, was that correct?…….. Again, how to become excellent at recognizing this in REAL-TIME? I bought into the CUP, but did not know for sure if it would form a C/H. Anybody who recognizes this competently consistently will have a few options of using a trigger to enter. I use several trigger approaches.
Chart #5, yes the C/H worked well, it started running again, it was starting to approach close enough to .74, I sold 1/2 again. Chart #6. sold the rest. I was concerned about THE top coming in. And remember, at .4750, I believed it was going to .74…in one day. Pretty darn close, enough room to believe and thus allow me to sit for a big run.
Rest of charts = LEARN to recognize a top.
Took some time to find the .74 resistance. My scanner missed VTL, turns out my volume filter was set too high. Great trade, nice real time recognitions, thanks for sharing.
Couple of trades in there again today Dave, once I decided the trend was up again for this morning, all bounce setups. I’ll recap later. As to the volume filter too high? VTL was by far the top volume of the day, if volume set too high, and VTL not showing up, then nothing should have showed up. Tell me the specific parameters for your filters. We’ll go thru it again. Remember I only use 3 filters, very simple – volume, moved up throughout the day, price between .05-40, and % change greater than 6.
I’m trying to deepen my shallow understanding on bounces and trade setups for bounces.
According to my limited understanding about bounces, a single dip is enough for a bounce trade.If so, where and how to choose a place for a limit order when trading for bounces?Are supports necessary?
“it convinced me it’s going to .74. Where did I get .74? – and realize it was around .47 when I targeted that. Truly great recognition, as it turns out.”
Indeed very impressive.
If I said is EZ to digest this stuff I would be lying.
BTW thanks for the help and the posts as well.
Raphael, and then how easy do you think it is to be the one to develop an extremely solid setup…from scratch. Do you know how lucky you are that I have developed these different setups and am doing posts about them? And do you have any idea how many POTENTIAL specific setups I had to discard because they did not prove to be high enough probability? Do you know how much of my life I have put into this business? And do you wonder why so few people become excellent traders?
And remember, it was the SELLOFF that convinced me VTL was going to .74, I made that decision at the LOW of the move, not in a rear view mirror.
Just keeping going over and over this stuff. When I developed this stuff, I kept going over and over etc each single situation multiple times and it started coming together. There are many many parts to bounce setups. Parameters, springs, waves, where are we – trend-wise – in relation to a (THE?) top, the time frame involved. My main “secret” about bounce trades – the TREND may not be up anymore, I truly am not sure when I switch to bounce setup mode, BUT I am extremely confident that the MOMENTUM is still up. There is a stupid idiot saying used by trading “masters”, they claim that “the momentum always tops before the price tops”. That is total bullshit understanding of how markets actually do move. There is the current momentum, but there is also the UNDERLYING LEFT-OVER momentum. I discovered that for myself, and tried to figure out how to profit from it.
My trades in VTL today were, to me, bounces only. BUT, getting 15% profit trades on “bounces”, is that worth mastering the setup?
Go over all of these comments.
Thanks for the feedback. I set my scanner volumes per your reco’s on the last Conf Call, but apparently I had my max volume too low. With the low price of VTL I wrongly assumed it was the min volume filter, D’OUGH! For now I eliminated the volume filter altogether so I won’t miss anything, and plan to avoid the issues with too large of a bid/ask spread. Is that a bad plan?
Nope don’t do it that way. You need the volume filter, because you want only THE MOST ACTIVE stocks. You want momentum and liquidity. You want my volume parameters? We did go thru them before. I’m not putting it out in public. Write Stevie if you want them. Also, hopefully then today you saw ATAI, which I traded today, and SHLDQ and SSLJ, have not yet traded today.