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General Discussion · Daytraders dont make it poll........
jimhbutton
msg #64814
modified
7/9/2008 4:38:52 PM

Hi Chip,

Good to hear from you.

Thanks for the thread ("I trade just one stock, TRO-style") that you began. It's been a great encouragement and informative.

-----------------------------------------------------------

You asked, "Also, are you trading SPF with it?"

-----------------------------------------------------------

I'm not trading SPF presently. I've been using a modified Bearish scan (with the Run-Pullback feature) to take advantage of the latest down market through short-selling & buying-to-cover. When stocks are dropping like flies I like to ride that strong downward trend till the tide turns. When they eventually start climbing like an F-16 skyward I'll use any number of modified Drop-Bounce Bullish scans to buy & sell. The trend is still my friend.

I won't enter a trade till TRO's "run target" or "drop target" numbers have been reached (as you demonstrated and explained in your latest SPF trade). What I do differently or in addition to that basic formula is that the "run target" or "drop target" number is just one entrance indicator that I'll use. For me the "drop target" is an excellent guide and alert as it captures the typical five-day movement of the stock.

For example, if I am wanting to play TRO's "drop target" then "bounce target" numbers I'll wait till the "drop target" is triggered. Next, I'll FURTHER wait till a few of the stock's technicals let me know that this bearish movement is bottoming out at the latest trough or valley (and optimally around the Low-of-the-Day) before entering a bullish buy position in anticipation of the "bounce target" being reached later.

In my case that means that I'll make sure that the short-term trend (on a 1-, 3-, 5-, or 10-minute chart) is reversing from bearish to a bullish direction -- by monitoring especially the Parabolic SAR indicator and the Directional Movement Indicators (+DI, -DI, ADX) -- before entering the trade.

------------------------------------------------------------------------

Note: I also use the MACD crossover/histogram, the Commodity Channel Index (CCI), and the Variable Moving Averages lines to help nail down this short-term trend reversal from bearish to bullish.

------------------------------------------------------------------------

My goal is to minimize the angst that you described in your latest SPF trade -- felt when entering the trade at the "drop target" and nervously watching the stock continue to descend as it further hunts out the Low-of-the-Day before reversing direction. Technical indicators aid me from prematurely entering the trade allowing me to be slower on the entrance trigger as I continue to monitor the stock as it noses downward in its technically verifiable bearish trend till a bottom trough or reversal is established. Then, in a perfect world, I would be able to get-on-board by entering the trade, ride the tide up to the "bounce target," before disembarking with some $$$.

In summary, by using these confirming technicals at the very least I've bought myself additional insurance from unnecessary anxiety. I am playing the better odds that when I enter the trade at or below the "drop target" this stock is a whole lot closer to the actual "Low-of-the-Day" than atypical days when it flies past the typical "Drop Target" like a dropping elevator.

Another thing Chip, you asked the following question:

-------------------------------------------------------------

"What are you using for a stop loss, to draw that 'pre-set indicator' line? Right now, I feel like this one point -- how to set that stop loss -- is keeping me from being more successful. Without this, I don't really know how much I can lose, and this slows down the trigger pulling."

--------------------------------------------------------------

TRO's "drop target" or "run target" are my general indicator lines that when triggered are then FURTHER modified by the additional input of the technical indicators that I've mentioned. Therefore, my "pre-set indicator" line is actually fluid, depending on an aggregate "buy" or "don't buy, wait" signal provided by a combo of the "drop target" and reversal confirming technicals.

If I play my hand perfectly, and enter the trade with all signals green for liftoff, and the stock then unexpectedly reverses direction on me -- with the technicals and red candlesticks confirming -- and continues its bearish decline, I'll bail if it squeezes me too much and I'm not in the mood to hold it for a later-in-the-day "bounce" or overnight in expectation of cashing in at the next morning's "run target." That's just me and my loss averse personality. I'll take a small loss, bait another hook, and fish for those "drop" & "pullback" stocks that want to behave.

This aforementioned negative experience isn't as common as finding a stock that cooperates with TRO's numbers, weakens in its descent past the "drop target" as it loses momentum and flattens out, reverses nicely with green candlesticks, and allows me to GIGO ("Get-In-Get-Out") with a profit at or near the "bounce target."

If I know in advance what stock I'm going to be trading (e.g., SPF) then I will check a stock's recent reversal points against my technical indicators in order to calibrate them to this stock's unique reversal signature. In other words I can fine-tune the technical indicators' settings (from their defaults) in order to more accurately and quickly discriminate between a simple retracement reading compared to a reversal reading. This tweaking of the technicals can be worth its weight in gold as the one-size-fits-all default settings are usually to broad, general and vague to give me critical discernment necessary to distinguish when to wait before entering a still down-trending stock or when to exit when my position is reversing.

Finally, thanks again to TRO for his filter building magic and for his benevolence in sharing his expertise with the rest of us.



General Discussion · Stop & Reverse...
jimhbutton
msg #64774
7/7/2008 10:56:55 PM

TrendSurfer wrote:

"I'm a price purist when it comes to trading, all my decisions come from the price action on the charts, including the fear and greed they reveal on a daily basis. I've learned over the years to ALLOW NOTHING to influence me other than that."

The best books that I've ever read on the simplicity of just prices for stock trading were written by a StockFetcher poster, Jayesh Patel, titled:

(1) "Profit from Prices: All You Need for Profit in Stock Trading is Stock Prices."

(2) "Profit From Price- Innovative approach to stock market trading."

His books can be perused @ the following Amazon.com addresses:

http://www.amazon.com/Profit-Prices-Need-Stock-Trading/dp/1434805131/ref=sr_1_1?ie=UTF8&s=books&qid=1215485070&sr=8-1

http://www.amazon.com/Profit-Price%252d-Innovative-approach-trading/dp/B0012BRUPO/ref=sr_1_2?ie=UTF8&s=books&qid=1215485202&sr=1-2

Jayesh Patel's StockFetcher scans listed in his books can be found by typing in pateljr in the Forum Search function.

His informative website is @ http://www.profitfromprices.com/

His ideas have influenced my own trading style immensely.

jhb



General Discussion · Daytraders dont make it poll........
jimhbutton
msg #64635
modified
7/2/2008 10:45:28 PM

Hi miketranz,

"Jim,can you explain in plain English basically how this system works. Where and when are you entering? Are you buying the open, buying the close? Is it basically a pullback filter for strong trending stocks? Thanks, Mike...."

TRO uses this filter to monitor SPF, apparently the sole stock that he trades long on a daily basis. As he states on page 23 of his "Run, Forest Run" thread:

"(6/27/2008 6:01:26 PM): ...I just trade the same stock everyday. I wait for the drop target for my entry and wait for the bounce target for my exit. If I hold overnight, then I want to exit at the run target."

The next day he wrote the following: "(6/28/2008 3:53:25 PM): ...I trade SPF. I wait for the price to hit the drop target, then I enter on the bounce meaning price is going up. I look to exit at/near the bounce target. If I am holding overnight, I look to exit the next session at/near the run target. I'll make 1% or more per trade. It's that simple. There are people making a TON OF CASH using the RFR filter. Some make a lot more than I do. But since I am busy with other things, I keep my SPF trade simple and profitable..."

I believe that you can adapt (or cannibalize) RFR's run-pullback and drop-bounce feature and insert it into just about any other type of filter and strategy which will then give practical targets for any number of entry or exit points -- depending on the system that you personally develop and are comfortable with. However, tempering this opinion of mine and keeping the run-pullback and drop-bounce feature in the context of RFR filter TRO wrote:

"(6/29/2008 1:32:21 AM): ...I write filters that find stocks that behave a certain way STATISTICALLY. Then I trade according to how those stocks behave. RFR stocks behave a certain way. I have spelled out how I trade them. If I am flat and SPF doesn't hit the drop target, then I wait for the next day. If you don't see your stocks on the RFR list, then they are NOT RFR stocks... RFR stocks are NOT FADE THE GAP stocks. FADE THE GAP stocks are not RFR stocks... You asked about the PULLBACK TARGET. I don't use it for entry or exit. I use it to see if the stock is behaving normally or abnormally..."

Mike you asked, "Where and when are you entering? Are you buying the open, buying the close?" You can do either. As far as the filter's originator TRO had the following to say about entry and exit points (from Page 4 of the “I Trade Just One Stock, TRO-style” General Discussion StockFetcher Thread):

"(4/14/2008 2:03:20 AM): ...Someone asked about ENTRY TRIGGERS. I use a 30 minute candles and go long on green candles. The reason I use 30-minute candles is because SPF is a NYSE stock and the price usually follows the normal reversal periods: KEY TIMES DURING THE MARKET DAY FOR TRADERS: As you will see, there are key times that we look for during the trading day as being pivotal. Most days, the action centers around those times. Other times of the day are more suitable for a trip to the gas station or lawn bowling. Here are the pivot times we look at for signs of life (all times are EST): ..."

I encourage anyone to go to this post and read the remainder of what "The Rumpled One" wrote. Also, on page 23 of the "Run, Forest Run" thread I compiled a handful of TRO-isms that really helped me get a handle on what this filter had to offer. That particular post is listed @ "jimhbutton (6/28/2008 1:14:06 AM)."

You also asked, "Is it basically a pullback filter for strong trending stocks?" It can be if shorting is your game.

jhb








General Discussion · Daytraders dont make it poll........
jimhbutton
msg #64634
7/2/2008 9:47:31 PM

SFMc01,

In "Filter Exchange" under TRO's "Run Forest, Run" thread you will find it mentioned first (I believe) on page 17.

jhb




General Discussion · Daytraders dont make it poll........
jimhbutton
msg #64623
7/2/2008 2:14:30 PM

I find that using TRO's basic run-pullback & drop-bounce "Run Forest Run -- Travel Guide" filter gives the necessary 5-day average target points on my daytrades.

He coaches to wait till the stock either hits the target run or target drop before entering the trade in the reverse direction (i.e., toward the average 5-day short pullback or long bounce target). To this I make sure that the run or drop trend has indeed crested or troughed and is reversing before entering short or long.

This system also leaves the trader with the option of holding overnight -- if the short pullback or long bounce targets aren't met -- and exiting next day when the stock hits the morning run or drop target instead.

TRO's advice of charting in advance the horizontal target lines is well taken. It allows me time to prepare overnight in anticipation of the next morning's action. TRO's use of these horizontal target lines is exclusive of technical indicators; insuring that no squiggly indicators are harmed -- lol.

In contrast to TRO's style I find that another huge necessity is in being able to accurately determine when a run or a drop is reversing in contrast to retracing. This is the difference between continuing in a trend for $$$ versus bailing prematurely during a simple retracement. That is where technical analysis is extremely helpful (esp., Parabolic SAR, Variable Moving Averages, Bollinger Bands, DMI, MACD, CCI, OBV, Williams %R, and RSI) when used on different time scale charts (e.g., 1-, 3-, 5-, 15-, & 30-minute).

More important than all of the above is to have a zero tolerance for losses in the hope of preserving all-important trading capital. When the stock verifiably moves against me -- by breaking through pre-set indicator lines that I've learned to trust through practice, practice, practice -- and I don't have a reverse short or long play in place ready to be triggered, then I immediately and mercilessly exit the trade with as small a loss as possible. Keeping the losses small and manageable, while learning the art of continuing with the runners or droppers till they reverse, is where money is saved on one hand and where money is made on the other.

Filter Exchange · Run Forest, Run
jimhbutton
msg #64429
6/28/2008 1:14:06 AM

Hi Alf (& TRO),

I've been really enjoying the daily accuracy of TRO's latest Run-Pullback and Drop-Bounce creation on various stocks and have taken the liberty to compile some of his helpful comments posted in various places throughout these forums. Hopefully they'll help clarify some fuzzy areas for others as they have for me:

WHEN TO ENTER AND EXIT A TRADE: DAILY REVERSAL PERIODS

---------------------------------------------------------------------------------------------

(From Page 20 of “Run Forest Run” Filter Exchange StockFetcher Thread)

Waldr (6/21/2008 6:31:35 PM):

TRO, I was just wondering if you ever apply stats on the time axis.

Say I like to know what would be the best time to statistically to get in to SPF. I guess intraday historical data software and filter would be required but I was just wondering if you apply stat's to the time axis so I can better fine tune my entry.

thx. in advance.

TheRumpledOne (6/21/2008 7:06:10 PM):

I do NOT apply statistics to time when trading stocks, only FOREX.

The reason I don't is the stock market has an open and a close. You can look at a volume chart to see when stocks (usually) are most active... the first and last hour of the day...

(Please go to page 20 of this thread -- "Run Forest Run" -- to read the rest of TRO's extensive answer)

------------------------------------------------------------------------------------------------------

(From Page 4 of the “I Trade Just One Stock, TRO-style” General Discussion StockFetcher Thread)

TheRumpledOne (4/14/2008 2:03:20 AM):

SPF making lower highs, lower lows but white candles.

Someone asked about ENTRY TRIGGERS.

I use a 30 minute candles and go long on green candles.

The reason I use 30-minute candles is because SPF is a NYSE stock and the price usually follows the normal reversal periods:

KEY TIMES DURING THE MARKET DAY FOR TRADERS

As you will see, there are key times that we look for during the trading day as being pivotal. Most days, the action centers around those times. Other times of the day are more suitable for a trip to the gas station or lawn bowling. Here are the pivot times we look at for signs of life (all times are EST): ...

(Please go to Page 4 of the “I Trade Just One Stock, TRO-style” General Discussion StockFetcher Thread to read rest of TRO's extensive answer)

------------------------------------------------------------------------------------------------------

(From Page 6 of the “I Trade Just One Stock, TRO-style” General Discussion StockFetcher Thread)

TheRumpledOne (5/1/2008 3:54:46 PM):

I use a 30 minute chart to trade SPF.

Why 30 min? Because the BIG BOYS usuallly reverse direction on the 1/2 hour.

Just trade with the candle color. Looks simple, sounds simple and it is simple UNLESS you complicate matters.

Indicators? Just HORIZONTAL LINES on my trading chart:

PREVIOUS CLOSE
OPEN
HIGH
LOW
PREVIOUS DAY'S MIDPOINT
CURRENT DAY'S MIDPOINT

I buy at x.x0 or x.x5 and sell for a nickel or more. Sometimes I'll hold overnight. I also will average down.

The trick is NOT TO BE GREEDY. A nickel on a $5 stock is 1 percent.

Do that once a day and you more than double your money in a year. Get rich slow and steady.

Today SPF open $5.06 and High $5.33 Low $4.99 (so far).

DON'T MAKE THIS COMPLICATED!!

-------------------------------------------------------------------------------------------------------

(From Page 12 of the “I Trade Just One Stock, TRO-style” General Discussion StockFetcher Thread)

d27283 (6/13/2008 8:13:49 PM):

Hi TRO,
I'm starting out with $500 and trading crossing ma's..... oh yeah and reading alot. What would I need as a minimum bank roll to run like Forest ?

TheRumpledOne (6/14/2008 12:06:43 PM):

There's more than one way to answer that...

1) If you want to daytrade, then by rule you need $25,000 minimum

2) you can "beat the system" by holding over night. If you buy an RFR stock at/near the bottom, you can hold overnight, hopefully sell at the pop, and then buy back in near the bottom again. You can make up to 3 daytrades in a 5 day period in a margin account before being labeled a PATTERN DAY TRADER. Only use a daytrade to escape or to take huge profits...

The biggest obstacle to achieving this is YOU! I don't know you personally, but, in most cases, people are in their own way. They are NOT satisfied with just making $10 a day starting out... they want more! They see what they could have made had they only traded some other stock. So then they hop around and miss more opportunities then they catch. Instead of being focused on their account they stick their nose in other people's business.

When you are trying to GROW an account, it's not the dollars, it's the PERCENTAGE! What do banks pay in a year? 2%? 3%? 4%? 5%? What's the reason you are not satisfied with making that in a day? Is waiting a year or two to have a BIG PILE OF CASH too long to wait?

Trading the same stock, day after day after day after day is BORING. AND IT SHOULD BE! You should be doing the same thing (that works) each and every time you trade. THIS IS BUSINESS. You don't have to be creative just consistant. You don't have to think, you have to execute.

If you want EXCITEMENT go to Vegas…

You will be tempted to stray from this method.

Can you really only trade the same stock over and over again, day after day, week after week, month after month?
Can you wait for 4 or more hours to place ONE TRADE?

Can you wait for YOUR PRICE or will jump the gun only to see that you could have entered at your price a few minutes later?

Will you be tempted to put the latest SQUIGGLY LINE indicator on your chart or can you stick with a few horizontal lines?

TRADING IS SIMPLE... I never said it was easy.

(I encourage you to go to Page 12 of the “I Trade Just One Stock, TRO-style” General Discussion StockFetcher Thread to read TRO's complete reply)

-------------------------------------------------------------------------------------------------

(From Page 21 of “Run Forest Run” Filter Exchange StockFetcher Thread)

Chip (6/23/2008 11:24:02 AM):

TRO, today (6/23/08) SPF (so far) has not hit it's drop target, but has hit it's run target (and then some). Is there a reasonable way to realize that it is in 'Run-Mode', rather than 'Drop-Mode'?

TheRumpledOne (6/23/2008 11:58:15 AM):

If daily candle is GREEN then RUN.

If daily candle is RED then DROP.

Simple.




General Discussion · I trade just one stock, TRO-style
jimhbutton
msg #64198
6/23/2008 12:10:49 AM

TRO & Chip,

Thanx guys.

What a great thread. I appreciate your contributions.

jhb

General Discussion · I trade just one stock, TRO-style
jimhbutton
msg #64167
6/22/2008 1:31:01 AM

TRO or chip,

You've both used the term "TP" in your posts and in spite of scrolling through reams of threads I've yet to find a definition. I'm sorry my ignorance is showing but could you help me? Does it mean:

(A) Toilet Paper? (lol, I couldn't resist)
(B) Trade Price?
(C) Turning Point?
(D) Target Price?
(E) Other?

Filter Exchange · Run Forest, Run
jimhbutton
msg #64148
6/21/2008 2:00:59 PM

Thanks TRO & Chetron

Filter Exchange · Run Forest, Run
jimhbutton
msg #64137
6/21/2008 12:20:04 AM

TRO,

What does the PB in "PBTgt" stand for?

I've guessed the P has something to do with Profit, and the B with Bounce.

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