Ran my ruler over CFE.
I dont want to explain the mechanics of it here, but need to jot a few notes down and here is a semi public place and I feel like I have to put a few of these things out there.
Backtest CFE.
Much of this was backtest which is not always the same as forward test. Another problem can be when the inventor can become less than totally objective in assessing the results. Markets go through different cycles which could mean the next turn in market sentiment could be the last time something like this system ever comes close to fitting. I should also mention, the application of any system is the true test, so it does not matter how well it may fit, it really comes down to how possible it is to trade the system. I have not traded this stock with this system but have traded other stocks with it and am more than happy with the improvement it has added in conjunction with my existing methods
Rather than quote results so far across the markets, I'll confine this to CFE.
Of the significant pivot high points in CFE since 2007..
Pivot on ......Missed Tgt by............ Time window
26/3/07....... 0.5c ......................Within window
25/6/07...... 4.0c .......................within window
27/9/07 not projected (no signal)
26/2/08....... 1.0c ...................... within window
31/3/08 not projected (no signal)
21/7/08.........0.5 ....................... 3wks outside window
16/1/09 not projected (no signal)
23/11/09 .......0.5 ......................within window
20/1/10 not projected so ...6c ..............2mths outside
the last pivot high had no signal and this was a failure of the system because of the significance of the pivot. Not happy with this last result.
predicted next pivot 68 to 74, first time window week of 14/2/11.
Price is there now, will a pivot eventuate ????
Saturday, February 12, 2011
Wednesday, January 26, 2011
PPX 26/1/11
We are all only guessing where price is likely to go in the short term, here's my read of the chart (guess).
looking at a VSA view, currently in a short term down move which affects how I treat differing volume from day to day and compare that with variation in price, from that I attempt to gauge the supply/demand balance and determine the most likely next move.
Monday's wide range down bar on large volume ( highest volume since 23/12) is the most significant bar in the move up from support and therefore has to be treated as dominating the landscape with a bearish tone.
Tuesday saw more selling and what I take from this bar is evidence of increased support for the stock in comparison to a recent instance where price first began to fall and at similar price range if possible. I look on the chart and find 22/9/10(price similar,range of bar similar) and note on that occasion the volume considerably lower yet price moved by about the same amount. This can only happen if there were more buyers willing soak up the available supply. In summarizing this bar,, mood is bearish but evidence of reasonably solid hidden support.
Wednesday, same range as Tuesday with no further decline in price and on increased volume. This bar says to me more sellers entered the market (50% more volume than Tues) yet they were unable to force price lower (same range) so there is even more evidence that the strength of support has increased.
Because supply continues driving price at this point, I remain short the stock and expect a reversal within days once the weak holders who most likely bought on the 19th,20th or 21st are eventually flushed from the stock. I have a covering order at 46c, this represents a short term volatility extreme for a pullback in stocks with a bullish long term outlook. The evidence of hidden strength so far could mean price will not decline to the extent where my order sits, so I am prepared to amend if necessary. I remain long term bullish and happy to continue to follow closely each swing as price progresses towards my eventual 66c target (or beyond if strength remains )
My short position has a stop which would result in a small profit. I need only re-enter a long trade at 54c to equal a buy hold strategy rather than trading the position as I have. The advantage in trading is, it has eliminated the risk to capital if price should continue to fall, and has also given chance to add a greater number of shares for no additional money invested if price does return to uptrend.
Tuesday, January 25, 2011
Risk
I'm currently less than 50% "in" the market and of that, about 40% of the total volatility is to the short side. I measure % volatility as a way to directly compare one trade to another. Funds are deployed depending on risk and volatility rather than a position taken using a certain dollar figure to buy/sell a position. In times where the market shows signs of possible reversal, I try to roughly balance risk/volatility to the long side against risk/volatility to the short side.
I know what I mean even if I dont explain it well.
I know what I mean even if I dont explain it well.
Saturday, January 22, 2011
21/1/11 Weeks End
Has been a great week moneywise but is that the point of all this. Foremost should always be focussing on the methods, the process.
This week I picked up one more gem, it was something said by another VSA trader. Its one thing to theorise the supply and demand balance and something totally different to have practical methodology to take advantage of correct reading.
The method in question treats signal bars as a bullish or bearish depending where price action is situated either trading above or below the extremity of the bar.
I think I can develop this further by adding my volatility multiple to give earlier entry points . The distinct advantage of this is being able to narrow initial stops and therefore increase position size without increasing initial risk.
As for the markets, the coming week could be the week to show the way for the new direction move which has been developing for weeks.
I need to be patient and wait for the confirming signals. This is my biggest problem lately, as the skills have improved the time I have to wait for the market to react is lengthening.
This week might be all about waiting for opportunity to come to me, patience patience patience
This week I picked up one more gem, it was something said by another VSA trader. Its one thing to theorise the supply and demand balance and something totally different to have practical methodology to take advantage of correct reading.
The method in question treats signal bars as a bullish or bearish depending where price action is situated either trading above or below the extremity of the bar.
I think I can develop this further by adding my volatility multiple to give earlier entry points . The distinct advantage of this is being able to narrow initial stops and therefore increase position size without increasing initial risk.
As for the markets, the coming week could be the week to show the way for the new direction move which has been developing for weeks.
I need to be patient and wait for the confirming signals. This is my biggest problem lately, as the skills have improved the time I have to wait for the market to react is lengthening.
This week might be all about waiting for opportunity to come to me, patience patience patience
Monday, January 17, 2011
Away to a good start, trading account is currently up 9% since the 1st Jan. The long term account is mostly cash. Have been taking profits as stocks pop up and will remain cash if the market continues to show signs of distribution phase occurring.
I guess I should put a few of my trades here, have been posting a few to Sharescene but would be easier for me to look back and review if placed here as well.
One trade which has been detailed on SS as it has developed is worth transferring the past posts over here is PPX
PPX 15/12/10
Very interesting to have this situation of multiple days 1 tick spread, it is obvious that (for now) there are no owners prepared to sell lower than 41.5 and no buyers prepared to pay up through the 42c level. Also the volume sold down matches the buys bought up today
The low volume confirms the lack of supply and considering the time this stock has spent in downtrend, it might be fair to say that all impatient sellers have exited.
Once the bidders realize that nobody will sell to them, the impatient ones among them will start to buy higher and a swing high will start.
The only spanner in this outcome is if a big player wants to test once more that all selling is done, if you are big enough and already have accumulated across the base Oct/Dec, you could throw enough onto the market to tip price below current levels and see if you trip any final stops.
I love a chart at this point, wish I could find one just like it EVERY day.
PPX 16/12/10
I'll take low volume breakouts off a sideways base which had signs of no supply,, any day.
IMHO
If you had a base which showed demand overwhelming supply,sure, you need high volume on the break to show the market there is sufficient demand to overcome the still available supply.
However coming off a no supply base, a rise on low volume is more sign that low supply continues even at higher prices.
Once price rises by 1 or 2 times the existing average range, supply increases as short timeframe swing traders begin to fill the bid with shares purchased prior to the move. Often you see an increase in volume in the afternoon on a rising stock, could be the daytraders selling into the demand prior to close. I believe there was sideways from 3pm yesterday with about 170k worth of selling. Earlier in the session, the rise from 42 to 44 on low vol was all due to no supply.
Supply could arrive today, 45 was my swing high target and wouldn't be surprised to see another test of support soon
PPX 20/12/10
bought 1/2 back 43.5, looking for 42 for the balance. Out Friday at 45 target mentioned earlier
PPX 21/12/10
This is pretty much how the pattern goes.......so far.
Shakeout and accumulate, when eventually the push lower costs more to move down than he's able to pick up on the lows, that will be the point where a new trend begins.
Yesterday 1.9m to range 3.0c
Today 3.2m to range 2.5
Dump 1m at 3.20 which triggered about 600k in stops and sells (1m dumpee... av say 41.5c)
3.40pm 200k of buyers into the next wave of panic
3.50pm 600k and only 1 tick move... someone buying into that supply
4pm match 570k no decline in price..someone still buying (dumpee.. buy back av say 40.25c = a no cost average down)
Probably be able to buy the remaining panic tomorrow at 5c less than he had to pay two days earlier.
These guys can keep doing this till they have transferred our account dollars into theirs.
Just my opinion how this game is played. Think I mentioned a few posts back 38.5 possible.
Yesterday and today did not go exactly to plan (its the market..what else should I expect). I had expected price to make a step stair down from the 45c level to prior support @40.5ish.
If things had gone to plan there may have been an opportunity to gain another cent or so, lower average as price bounced down the stairs.
With the pattern being a possible base formation (called "crossing the creek". refer VSA/Wyckoff), I'm not interested in being short, so the only way to scalp a little more is to own some and look to sell the minor bounces as price comes back down. So I split my buys according to my method and hope it bounces in the right places to allow the plan to work.
I'm relying heavily on reading of the chart and having the volatility stay within the parameters I've been monitoring, otherwise it all turns to poo...
Yesterdays drop range was about double the volatility I had anticipated and today was also a wider range than hoped for.
I've been forced to scramble now, sold today at (1.75c loss 41av),then bought the close 40c.
I still see 38.5 as possible and more likely now that more supply has emerged when induced by the dump. I would be happy if price is unable to be driven to there. I believe strength is visible on the down bars and weakness is seen on up bars.
If price drops below 38.5 plan B.
Its a little hard to write some of this stuff, you sort of need to know a bit more about my money management and trading style and at same time I'm not willing to divulge what I consider is my "edge", that is also part of the whole picture.
At this stage I've decided on a $ amount to invest in trading this stock, see if I can get set then scale into a bigger trade using profit to finance the risk
11/01/11
So far, I'm comfortable staying in this trade, seems like a normal attempt to test lower limits of supply and I still would not be surprised to have part of the test include some trade breach below the 40c level in an attempt to drain any stops on the part of weak holders.
If it is correct that a big player has a campaign in progress (and I believe this to be the case), he will want to ensure he has flushed out whatever final supply that exists in the hands of anxious sellers.
This is necessary for the next stage of his campaign of advancing price from the low created when supply is finally exhausted.
Even the big players can not know exactly when there will be no more sellers left, all they can do is continue to push price lower as they accumulate.
Sometimes they know in advance of the general market that good news is coming, this ties in with a common accumulation strategy of using the news as the initial boost from the low to advance price towards their planned profitable sell level.
16/01/11
Price action in the last couple of days is showing progress with the least line of resistance now appearing to be to the upside.
Here's how I am reading what's happening.
The 12th Jan indicated no supply was left at the 40c mark, after the 40.0c low of the day before.
Next day on 13th Jan, the gap up 1/2c is significant because it suggests the lack of supply was noticed by some traders, who are now becoming more eager to buy than there are sellers availabe to sell. Am not saying all gap up opens should be read as similar, it has to be read in context with what has preceded the gap.Price closed on the high and whilst there was not huge volume, a quick check of the intra-day chart shows almost no selling down with demand gradually eating through the limited supply throughout the day. Around 3.10pm a sell test had no follow through with price back above 43c.
Then the 14th Jan around 11.00am a sell back down to 42.5c was on extremely low volume suggesting there is still no supply even at the higher level. Demand continued to exceed supply for the rest of the day, again closing on the high.
I'm more confident that the next test of strength will be above the 40c level. Accordingly I have now raised my stop closer to that level which, has allowed me to add to this position due to the reduction in risk. If price action continues to show strength on each test of lows, I will one more time, add to this position, again controlling risk by lifting the stop. A next test back to 41.5 or 42 fits my plan prior to a possible explosive expansion in price.
I guess I should put a few of my trades here, have been posting a few to Sharescene but would be easier for me to look back and review if placed here as well.
One trade which has been detailed on SS as it has developed is worth transferring the past posts over here is PPX
PPX 15/12/10
Very interesting to have this situation of multiple days 1 tick spread, it is obvious that (for now) there are no owners prepared to sell lower than 41.5 and no buyers prepared to pay up through the 42c level. Also the volume sold down matches the buys bought up today
The low volume confirms the lack of supply and considering the time this stock has spent in downtrend, it might be fair to say that all impatient sellers have exited.
Once the bidders realize that nobody will sell to them, the impatient ones among them will start to buy higher and a swing high will start.
The only spanner in this outcome is if a big player wants to test once more that all selling is done, if you are big enough and already have accumulated across the base Oct/Dec, you could throw enough onto the market to tip price below current levels and see if you trip any final stops.
I love a chart at this point, wish I could find one just like it EVERY day.
PPX 16/12/10
I'll take low volume breakouts off a sideways base which had signs of no supply,, any day.
IMHO
If you had a base which showed demand overwhelming supply,sure, you need high volume on the break to show the market there is sufficient demand to overcome the still available supply.
However coming off a no supply base, a rise on low volume is more sign that low supply continues even at higher prices.
Once price rises by 1 or 2 times the existing average range, supply increases as short timeframe swing traders begin to fill the bid with shares purchased prior to the move. Often you see an increase in volume in the afternoon on a rising stock, could be the daytraders selling into the demand prior to close. I believe there was sideways from 3pm yesterday with about 170k worth of selling. Earlier in the session, the rise from 42 to 44 on low vol was all due to no supply.
Supply could arrive today, 45 was my swing high target and wouldn't be surprised to see another test of support soon
PPX 20/12/10
bought 1/2 back 43.5, looking for 42 for the balance. Out Friday at 45 target mentioned earlier
PPX 21/12/10
This is pretty much how the pattern goes.......so far.
Shakeout and accumulate, when eventually the push lower costs more to move down than he's able to pick up on the lows, that will be the point where a new trend begins.
Yesterday 1.9m to range 3.0c
Today 3.2m to range 2.5
Dump 1m at 3.20 which triggered about 600k in stops and sells (1m dumpee... av say 41.5c)
3.40pm 200k of buyers into the next wave of panic
3.50pm 600k and only 1 tick move... someone buying into that supply
4pm match 570k no decline in price..someone still buying (dumpee.. buy back av say 40.25c = a no cost average down)
Probably be able to buy the remaining panic tomorrow at 5c less than he had to pay two days earlier.
These guys can keep doing this till they have transferred our account dollars into theirs.
Just my opinion how this game is played. Think I mentioned a few posts back 38.5 possible.
Yesterday and today did not go exactly to plan (its the market..what else should I expect). I had expected price to make a step stair down from the 45c level to prior support @40.5ish.
If things had gone to plan there may have been an opportunity to gain another cent or so, lower average as price bounced down the stairs.
With the pattern being a possible base formation (called "crossing the creek". refer VSA/Wyckoff), I'm not interested in being short, so the only way to scalp a little more is to own some and look to sell the minor bounces as price comes back down. So I split my buys according to my method and hope it bounces in the right places to allow the plan to work.
I'm relying heavily on reading of the chart and having the volatility stay within the parameters I've been monitoring, otherwise it all turns to poo...
Yesterdays drop range was about double the volatility I had anticipated and today was also a wider range than hoped for.
I've been forced to scramble now, sold today at (1.75c loss 41av),then bought the close 40c.
I still see 38.5 as possible and more likely now that more supply has emerged when induced by the dump. I would be happy if price is unable to be driven to there. I believe strength is visible on the down bars and weakness is seen on up bars.
If price drops below 38.5 plan B.
Its a little hard to write some of this stuff, you sort of need to know a bit more about my money management and trading style and at same time I'm not willing to divulge what I consider is my "edge", that is also part of the whole picture.
At this stage I've decided on a $ amount to invest in trading this stock, see if I can get set then scale into a bigger trade using profit to finance the risk
11/01/11
So far, I'm comfortable staying in this trade, seems like a normal attempt to test lower limits of supply and I still would not be surprised to have part of the test include some trade breach below the 40c level in an attempt to drain any stops on the part of weak holders.
If it is correct that a big player has a campaign in progress (and I believe this to be the case), he will want to ensure he has flushed out whatever final supply that exists in the hands of anxious sellers.
This is necessary for the next stage of his campaign of advancing price from the low created when supply is finally exhausted.
Even the big players can not know exactly when there will be no more sellers left, all they can do is continue to push price lower as they accumulate.
Sometimes they know in advance of the general market that good news is coming, this ties in with a common accumulation strategy of using the news as the initial boost from the low to advance price towards their planned profitable sell level.
16/01/11
Price action in the last couple of days is showing progress with the least line of resistance now appearing to be to the upside.
Here's how I am reading what's happening.
The 12th Jan indicated no supply was left at the 40c mark, after the 40.0c low of the day before.
Next day on 13th Jan, the gap up 1/2c is significant because it suggests the lack of supply was noticed by some traders, who are now becoming more eager to buy than there are sellers availabe to sell. Am not saying all gap up opens should be read as similar, it has to be read in context with what has preceded the gap.Price closed on the high and whilst there was not huge volume, a quick check of the intra-day chart shows almost no selling down with demand gradually eating through the limited supply throughout the day. Around 3.10pm a sell test had no follow through with price back above 43c.
Then the 14th Jan around 11.00am a sell back down to 42.5c was on extremely low volume suggesting there is still no supply even at the higher level. Demand continued to exceed supply for the rest of the day, again closing on the high.
I'm more confident that the next test of strength will be above the 40c level. Accordingly I have now raised my stop closer to that level which, has allowed me to add to this position due to the reduction in risk. If price action continues to show strength on each test of lows, I will one more time, add to this position, again controlling risk by lifting the stop. A next test back to 41.5 or 42 fits my plan prior to a possible explosive expansion in price.
Tuesday, December 28, 2010
Looking Forward to 2011
Thought this might be a good time , while i'm on a break for Christmas, to put down some goals for the coming year.
The last four months of this year have given me a great deal more confidence. I'm becoming more relaxed with my VSA charting and am noticing the readings often correct.
In 2011
I'm looking to increase the trading account by 150% and to trade the investment account to a 50% increased value by end December.
The results for the last 2 months especially, suggest these targets to be realistically getable. If market conditions turn bearish for extended periods, there should be greater opportunity to increase the trading side to compensate for lack of investment account opportinities. All I need to do is be patient, wait for correct entries, make sure I dont short-cut the system, stage into trades and trade a greater portion of the trend than I have been this year
The last four months of this year have given me a great deal more confidence. I'm becoming more relaxed with my VSA charting and am noticing the readings often correct.
In 2011
I'm looking to increase the trading account by 150% and to trade the investment account to a 50% increased value by end December.
The results for the last 2 months especially, suggest these targets to be realistically getable. If market conditions turn bearish for extended periods, there should be greater opportunity to increase the trading side to compensate for lack of investment account opportinities. All I need to do is be patient, wait for correct entries, make sure I dont short-cut the system, stage into trades and trade a greater portion of the trend than I have been this year
Thursday, October 14, 2010
Chasing my tail today, scrambled to re-enter a few positions which I had bailed earlier this week. No great damage from missed profits, however very annoying that I had stops set at realistic distance back from price action and in a moment of emotional trading, I closed out perfectly good trades.
My current method of trading is as follows.
Once a chart is selected for entry using Volume Spread Analysis
Position size is determined by setting a maximum loss, (currently at 0.5% of account value)
determine 3x or 2x the ATR then divide the max loss by the ATR multiple = #shares to buy.
Before placing the order check that a target at least 2x the max risk is realistic.
Place the order, immediately set a stop once order is filled.
Place text and visual marks on chart to help manage the trade.
Include/// Date of entry// Entry price// Initial stop// Target// ATR #
Each potential trade must have the calcs listed in the workbook and a brief note in the diary on reasons for entry before the end of the day's session
My current method of trading is as follows.
Once a chart is selected for entry using Volume Spread Analysis
Position size is determined by setting a maximum loss, (currently at 0.5% of account value)
determine 3x or 2x the ATR then divide the max loss by the ATR multiple = #shares to buy.
Before placing the order check that a target at least 2x the max risk is realistic.
Place the order, immediately set a stop once order is filled.
Place text and visual marks on chart to help manage the trade.
Include/// Date of entry// Entry price// Initial stop// Target// ATR #
Each potential trade must have the calcs listed in the workbook and a brief note in the diary on reasons for entry before the end of the day's session
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