Pavilion103's LIVE ASX Momentum Setup Trading Thread

[debtfree]

SEN

Pav suggested he was going to consider my comments.
To clarify my comments on the chart
I would have moved to B/E if the current bar was taken out.
It wasnt so I presume Pavs stop of .8 was!

I read your comments and understood (to my thinking) that if the bottom of the last bar on your chart was taken out you would take your S/L to B/E. 2 days later it did that so I knew if you were in this trade at that point you would out at B/E. Have I read your comments properly?

By the looks of Pav's spreadsheet in his Trailing Stop column he has .072 which is roughly the line you drew with the words 'Pattern failure'

I'm not sure what has happened.

 

[tech/a]

I read your comments and understood (to my thinking) that if the bottom of the last bar on your chart was taken out you would take your S/L to B/E. 2 days later it did that so I knew if you were in this trade at that point you would out at B/E. Have I read your comments properly?

By the looks of Pav's spreadsheet in his Trailing Stop column he has .072 which is roughly the line you drew with the words 'Pattern failure'

I'm not sure what has happened.

No I move stops when new lows or highs are formed (in stock trading)
Taken out has two connotations I guess.
I knew what I meant---why didn't you??

Anyway PAV knew what I meant.
PAVs last comment was stop to .8
I guess that's where it was!

 

[Wysiwyg]

One more....
Plenty to keep us going

That is Drillsearch (DLS).

 

[pavilion103]

I never know how to trade those. As you can see it's different from all my other setups. More speculative.

I'm going to take Tech's thoughts on board and move my stop there.

Happy for input. I admit I'm a bit lacking in understanding with these ones.

"I'm going to take Tech's thoughts on board and move my stop there"

Not sure if I can get much clearer than that!

 

[debtfree]

Sorry for more questions Tech but I've just got to learn this stuff, it's important for me.

I have added the graph of SEN you put up earlier. You say this is a pattern failure, is this because the bar on the 4th Feb (black arrow pointing to it) broke out above the horizontal pattern line then came back into the pattern, destroying the pattern thus making this a pattern failure. So at that point you would have then put your S/L at the line you drew with the words Pattern failure. Have I got this right?

Also I have put a red line under the new low (13th Feb) that formed after the share starting moving upwards, a new high was made after this date, is this what you are referring to when you say 'a new low above the buy stop'?

Taken out has two connotations I guess.
I knew what I meant---why didn't you??
Can I have another go at this .... you meant, taken out the top of that bar? As I said at the start, sorry Tech.

Thanks in advance for all your help.

Apologies to Pav, this trade threw me a little.

 

[tech/a]

The line is the point where price would have to trade or lower to call it pattern failure.
The bar I was talking about is the very last bar on the chart.
Following the lows after some correction.

 

[debtfree]

The line is the point where price would have to trade or lower to call it pattern failure.
The bar I was talking about is the very last bar on the chart.
Following the lows after some correction.

Ok, many thanks Tech for your input, time and patience with me .. I appreciate it. Also thanks Pav.

 

[pavilion103]

Latest update going into the weekend

 

[Nortorious]

Nice work Pav. I'm enjoying following this thread and seeing how the portfolio is performing. I actually had API going back awhile bought in at 0.76 I think and sold when the market was dicey at 0.89.

Still a nice little earner but the 1.30+ is making my trade look like a buffoon... especially when I ignored my rules and tried to predict the overall market was headed down (before I changed my opinion and caught the rally back up on other stocks.. phew....)

 

[pavilion103]

Hi everyone following.
I posted in the futures thread about some minor health issues/stresses I've faced in the past month or so.
Complete overload, reoccuring virus, bad stress symptoms. My schedule is way over the top.

I am not sure what to do about this thread as I was really enjoying this and it appears it was beneficial for many.

I will give my final thoughts on this and let you guys know. Apologies, but I am running myself into the ground at the moment!

My intention is to take a break from the forum for a little while and return fully charged.

 

[peter2]

I'll volunteer to carry on with Pav's momentum portfolio, provided there is enough interest.
PM me if you want this portfolio to continue. I'll need to see >5 PMs. OK?

I should warn you that I'm daffier than the duck for taking this on and I'm much more conservative (risk adverse = tight arsed) than Pav.

This is purely an educational exercise to illustrate the ups and downs of a portfolio. When there is risk capital available I'll be hoping to get trading suggestions from the ASF community. I'm not going to do all the work. OK?

As an example of what you might expect this is the portfolio at the EOW 6/3/15. There have been a few down days since then and the current P&L is lower.

So, PM if you're interested, otherwise this thread waits for Pav's return.

 

[peter2]

Keep the PMs coming. Don't you want to know what happened during the week and the effect of a few down days?

This sort of paper trading exercise is essential for beginners to get a little market experience without losing money. The market will deliver plenty of surprises as we go along, some good and some bad. We have to know what we are going to do at all times. You can create your own trade management what ifs... if you follow this thread.

If/then examples:
IF: You are thinking about trading shares
THEN: You will learn heaps following this thread.

IF: You participate by suggesting a trade opportunity.
THEN: You'll learn even more.

The "Duck" is on board and I'm sure Pav will appreciate the "assist", but I'm not doing it for them.

Are there others out there interested enough to PM me to go ahead?

 

[peter2]

Not enough interest from less experienced members yet, so I'll add a little more information about my trading style.

Firstly, before I show you the money I have to review the trading facts of life. I cut my losses quickly, use tight trailing sell stops and profit targets to get the numbers I need to be profitable. The numbers are W%, Ave Win (AW) and Ave Loss (AL).

Win %: I can't do much about this number. Sometimes its easy and other times it's not. My estimate for this number is 50% (random).

AL: If a breakout trade doesn't go up immediately then I know its in trouble and I'll take an early (smaller) loss than the initial risk (1R). Sometimes I take a slightly larger loss after bad news. That's trading. The estimated AL is ~0.7R.

AW: So what size win do we need to make a profit. Obviously >1R would be enough, but I like to see >1.5R as a minimum. Focusing on >1.5R helps me let the good trades go higher as every successful portfolio needs a few larger than normal winners. My estimate for the AW is ~1.4R. This is twice the AL.

These numbers create a positive edge and I'll let you calculate how much. Edge = (W% x AW) - (L% x AL)


Secondly, my trade management style will be different to Pav, tech/s and others. You should have already noticed in my first portfolio pic that I monitor risk closely. I watch the amount of capital that I'm risking and the total portfolio risk (heat). I have limits on these risk levels and work within them to prevent me from risking too much. These limits are designed to keep me comfortable as I trade better when I'm not concerned about the losses.

Pav started this 50K portfolio with a trade risk of 1%. I'll continue that but I'll impose a limit of 6% when I'm bullish (XAO going up) and 4% when I'm bearish (XAO going down). This means I'll start more trades (up to 6) when the market is going up than when it's going down. Portfolio heat is the total risk in the portfolio. This includes both open profit and capital risk. I monitor this to ensure it doesn't get too large. I don't want a draw down of 20%, not even 15%. I try to trade without losing more than 10%, so this becomes the portfolio heat limit.

Look at the risk values on the first pic I posted. Both the capital at risk and portfolio heat are above my comfort levels. Yikes, that is too much at risk for me. I wont be starting any more trades until the risk gets under my limits.

Pav used leverage and currently the portfolio has ~77K invested. I'll be keeping this to 50K. I won't use leverage until the portfolio has earned that privilege (fully invested in profitable trades and risk capital available).


ps: Interesting, that the first PMs I received were from experienced traders/investors. I love their passion. Are there less experienced members with the same passion for the markets ? I'm keen. How about you?

 

[peter2]

Thank you for your expressions of interest. I hope you enjoy the challenge as we proceed.

Portfolio update: I will routinely post the current portfolio at the EOW in a similar format to tonights update. Trades closed are listed on top, under the header. (Do you like the header Joe?). I will only show those trades that were closed during the week. The stats will NOT include the open trades. The open trade details should be obvious and they are sorted by risk at their trailing stops (TS). The best trades will be in green once their TS is at BE or better. The portfolio managers role is to be fully invested in profitable trades.

This is what happened during the week (so far).

Notes: My application of the sell exit stops is different to Pav's. My exits will be triggered by a close below the trigger level. The exit price will be the next day's open price. This allows me to manage every trade at the EOD and place the sell orders before the market opens. I have managed this weeks trades as Pav listed and posted my modified TS (exit) prices.

I'm not hiding the stock codes. We are all adults and this is NOT a tipping service. I may or may not be trading these opportunities and may manage my real trades differently than what is posted here.

This weeks sells:
WHC: Sold at exit stop 1.57 for a full (1%) loss.
SAI: Sold at exit stop (4.13). Trade earned dividend (0.075) which partially offsets the full loss.
GPT: Sold as market touched our TS price. This is why I prefer to use a close below exit trigger and keep my sell exit orders out of the market.

Sell exits (TS) updated:
API: Great trade, currently >3R. moving TS up to close <1.35 to lock in profit.
I'm going to place a sell order at 1.54 and grab the +4R result if it trades at/above this level.
NAN: Exit trigger moved to close below 1.65, locking in some profit.
PAN: We have two open trades (?). Exit both on a close < 0.51.
SEN: Raising TS to close <0.082 (Break even).
CAJ: Raised exit stop to close <0.90
APN: Exit on close <0.90
SYR: Exit on close <4.20
AGF: Exit on close <1.11

 

[tech/a]

Peter.

Like your approach!

I don't know if you've ever done this but I note you will move your trade to a sell
earlier if the stock isn't moving in your direction quickly enough (You can see its in trouble).
I do similar.

Another thing I do is move my initial stop to B/E as soon as the initial trade has been tested with a pullback
(Higher Low) and then I start trading with a trailing stop ---which I crank up closer the steeper the rise.

I find it drops back draw down dramatically.(Be as a dot ball is better than a few runs in the oppositions camp!)
Can increase trades as I do get stopped out more often.
Helps maximize profit (More runs for than against!)

 

[craft]

Solid gold Peter

I hope Joe sticky’s this thread – it’s bound to become a classic.

I also hope you have got interest from some of the FA investors. Because if they have never been exposed to a well risk managed trading portfolio, there will be a lot to learn here (with a much faster feedback loop than available through FA investing) that will be useful to their own endeavours – we are all in the business of managing risk and rewards.

 

[peter2]

PM Comments: (PM is Portfolio Manager)

Currently the portfolio has accumulated seven losses (-5.3%). It's normal for a portfolio to accumulate losses before the profits appear. It takes time for the profits to form and we don't let the losses get bigger than planned. I'm sure that this frustrates beginning traders when they start unless they've done some preparation. However I don't like to get too many losses as they add up and I don't want to see them accumulate faster than the open profits. Start slowly.

The portfolio has some cap risk available (6% - 4.6% = 1.4% available = 1 trade). However seeing that the portfolio is -5.3% and there is another -5.3% in open risk I might be patient and see what develops during the week.

I've just noticed that the portfolio is slightly over its 50K limit, so there is no cash available at present. IMO the use of leverage is not justified at this time.

The best attribute for a portfolio manager is patience.

New trading opportunites: I routinely scan the market for any one of four price patterns and I'll be on the look out for some potential setups. I'll discuss my setups much later.

I'd like to invite the members to post any setups that they see in the stock specific threads to allow further discussion. If I like the setup I'll trade it in this thread and give the poster kudos for the find.


ps: My immediate goals: Support Pav, support ASF, see this portfolio to a respectable profit,

OK? Any questions as we continue ?

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

tech/a: You will notice that we think alike in many trade management aspects.

eg. The trade in AGF, its a fund and unless it takes off (which it hasn't) I'd rather buy another break out trading opportunity.

 

[Nortorious]

Trade opportunity with CYC should it close out Friday above 0.633.

Will post in the CYC thread the chart etc for discussion as per Peter's desires.

High risk from a stop placement but good force behind it for further upwards progress.

 

[skc]

My intention is to take a break from the forum for a little while and return fully charged.

Pav, a great thread but not nearly as important as your own wellbeing. Enjoy your downtime (it gets rarer as you get older) and we all look forward to you coming back fully recharged.

I'll volunteer to carry on with Pav's momentum portfolio, provided there is enough interest.

Thanks Peter2. Heaps of great stuff complementing Pav's methodology, especially in the area of risk management on a trade-by-trade and portfolio basis.

 

[peter2]

It was brought to my attention that Pav's #28 setup (DLS - post #57) broke out today and closed near its high.

If I include it, it might seem that I'd put it in because it started well. I won't, but credit to Pav for the setup that has triggered and started well.