EWZuber
1,373 posts
msg #42854
- Ignore EWZuber |
4/9/2006 10:14:53 PM
keithgki, Yes. That is what I would be looking for. But if you are using EoD(end of day) charts one needs to remember that the days candlestick is not valid information to trade on until is has been printed, or finalized.
One mistake that I see people make all the time is that they take a position based on end of day charts but place the order while that days candlestick is being made.
If one is going to do that I advocate using intraday charts to make the actual entry, the hourly chart at a minimum. You may look and find that the Hourly Chart is already overbought and in a consolidation pattern or worse, in distribution.
This is why you will see a lot of candlesticks with intraday spikes that moved above resistance but closed below resistance. No need to get caught up in that holding a position that is underwater, IMO.
Intraday charts are traded just like the demonstration chart I supplied labeled, 'daily-chart-entry-exit-strategy.'
All JMHO
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keithgki
13 posts
msg #42855
- Ignore keithgki |
4/9/2006 10:21:57 PM
so, in order to trade using eod charts, you would have to wait until the next day to be sure that it closes above resistance?
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EWZuber
1,373 posts
msg #42859
- Ignore EWZuber |
4/10/2006 5:08:08 AM
keithgki, yes. The same is true in all time frames.
For instance, a support or resistance level is not confirmed violated on a 5 minute chart until the candlestick for that 5 minute period is complete and the next candlestick has just begun. Same for Hourly, Daily, Weekly, Monthly Charts.
For an example lets look at ATML which made a brief new 52 week high on Friday. Someone waiting for the stock to break above short term resistance at $5.30 might have bought in right at the open on Friday morning thinking it was an omen of better things to come. However if they held on they are now in a position that is underwater.
(granted it was not a compelling entry point to begin with but please bear with me)
On this Hourly Chart it is easy to see how even this poor entry could have made a small return and got the trader out before he ended up a bag holder.
Also take a look at a Daily Chart to see the morning spike that lured in some traders.
Best price out on a break of support using the Hourly Chart was about $5.30.
(It is important to note that exiting at a double top near $5.45 would also be a viable strategy.)
There will always be some sort of pattern that developes at the bottom and the top of a cycle. Recognizing the pattern and watching for a resolution to the pattern will typically indicate the future direction. At times you may need to go to the 5 minute chart to see short term patterns emerge.
This is pretty much the case with this ATML chart. This topping pattern is easy to see in the 5 minute time frame, not so easy on the Daily or Hourly Chart.
Using the 5 minute chart we get in an tad earlier and exit considerably earlier, this seriously mitigates our risk, IMO.
Basically what I'm advocating is using daytrading techniques to enter a longer term position. The position will mature naturally as long as support is not violated, IMO.
(Note, this can be a tricky balancing act when the PDT rule governs your trading frequency).
http://server4.pictiger.com/img/217971/picture-hosting/atml-hourly-chart-ii.jpg
http://server4.pictiger.com/img/217972/picture-hosting/atml-5-minute-chart.jpg
Upload Images for FREE with www.PicTiger.com
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keithgki
13 posts
msg #42865
- Ignore keithgki |
4/10/2006 10:29:55 AM
EWZuber, thanks again, what charting service do u use that provides real time, intraday charting?
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EWZuber
1,373 posts
msg #42868
- Ignore EWZuber |
4/10/2006 11:40:56 AM
They are free with an Interactive Brokers account. They are really decent charts now too. With options for time/price and a 50 period MA in all time frames.
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keithgki
13 posts
msg #42869
- Ignore keithgki |
4/10/2006 12:01:28 PM
EWZuber, thank you so much for sharing your knowledge. i actually just realized that my scottrade account has intraday candlestick charting with different inicators. i have been applying some of your intraday stochtastics techniques to nsol and necx so far today, and have able to predict good entry and exits points. i can see how powerful this technique is in gaining good entries and exits. all i need now is the 25k for the day trading account :).
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keithgki
13 posts
msg #42871
- Ignore keithgki |
4/10/2006 12:45:39 PM
actually, now that i look at it and read the fine print, the charts are delayed 15 minutes, but still getting good results. im sure with some real time data, it can be predicted even better!
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EWZuber
1,373 posts
msg #43850
- Ignore EWZuber |
5/18/2006 12:42:29 PM
Entered PTSC at $0.645. Watching to see if the position can mature past a daytrade. Suspect it may try to close the week above the 25 WK.MA at $0.685 and confirm it as support in that time frame.
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EWZuber
1,373 posts
msg #43856
- Ignore EWZuber |
5/18/2006 4:02:09 PM
Closed at $0.72 as it broke TLS on the 5 min. chart. Hourly Chart needs to complete the distribution phase. Only needs to close above $0.68 to confirm 25 WK.MA as support.
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EWZuber
1,373 posts
msg #44108
- Ignore EWZuber |
5/23/2006 5:26:39 PM
PTSC may close the week above the 25 WK.MA at $0.68 but the Weekly Chart stochastics look like it wants to eventually drop down and test the 50 WK.MA at ~$0.40.
No follow through on Daily Chart so far but could still happen.
Short term it has been weak, breaking through the 25 HR.MA as support and barely holding on to pattern support formed of the first move higher last Thursday at $0.70.
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