Oh yes ..... fear of losing your profit is a whole different beast. It's interesting you mentioned the "confidence" factor and past trades to "reaffirm". I dusted off Mark Douglas "Trading in the Zone" this past weekend. One of his points is that no matter how certain you are about the position - at the end of the day you don't really know the outcome. You also don't know the order of your winners vs. your losers. You can only develop an overall % expectancy over a series of trades. I know that I find myself at times thinking well guys like Douglas haven't seen the kind of analysis we're doing in a thread like this. But I think that mindset can become a trap as anything can happen in markets. What has compounded the problem is watching a stock like AMD or SFIX go on to hit PnF targets well after I sold out. This has led to me operating the assumption that the others will run up just as fast - even in the face of an obvious historical top like we've seen with DLTH or NVTA. This is not a knock in any way shape or form on this brand of analysis because it's quite clear how powerful it is. I thought I was ready to let positions sit out there and breath for however long it takes, but it has led to too many poor executions. Let's also consider I'm not scaling out enough and not doing things like selling options against my position to lessen the damage on serious pullbacks. It's not normal for me to be so dismissive of taking my profits off at +30%. Think about that ..... I just said 30%! And from a position I entered less than 2 weeks ago LOL. I'm back at that place where I recognize again I would need a whole separate account for long-term PnF-based positions. It's hard to intermingle them in the same account as my short/medium term stuff.
So what the hell is with that volume today? EDIT: Even elevated volume in KTOS. Is there some market event I'm unaware of? I thought triple witching isn't until next week.
One thing that helps me is i scale into my positions, not out.... So by default, losses are at worst 2x smaller than wins.... Definitely not a high frequency trader, so thats my edge..... Also only half as burdensome to let half the capital ride on a slow developing trade It goes something like this, and may still need some tweaks.... An intended full position will be 20% of my portfolio... So, the initial buy will be 10%.. That lets me place a -10% stop and only be risking 1% of the account, and have as many active positions as i can keep track of (anything over 5 or 6 is overwhelming for me anyway)...... This is where it gets a little unorthodox, i don't look for a pull back or any strategic place to fill the position, if price moves up 10% i go all in, doubling up... Then i can move my stop up to 10% under the current price (5% under my basis) and still only have that 1% risk This still doesn't help me with exit strategies, but it allows me to trade twice as often with half the fear.... My trade journal is mostly red, but all the losses add up to the equivalent of accidentally stepping in an ant hill..... Its annoying, and it itches, but the hand full of green trades are the equivalent of a Raid commercial from the 80's.... "RAAAID???... BOOM!"
@Rock Sexton, @Onepoint272 : SONC to be acquired at $43.50 per share. https://www.streetinsider.com/Corporate+News/Sonic+Corp+(SONC)+to+be+Acquired+by+Inspire+Brands+for+$2.3+Billion/14640128.html
Thanks Rock for pointing out that SONC. I owned it for less than 5 trading days. That doesn't happen too often.
I like the hinge, the rising supports, and that the supply continues to shrink. I imagine they won't make it easy to hold though, as in they could take it down for one last hunt for weak sellers before taking it higher.
Okay guys, looking back at JRich's kick in the (_)_) stock, WWE. Why am I not holding this? I had conservatively used the small TR to get the target of 73.50. But look at this monthly chart, it had built cause going way back into early 2000. I don't even want to look at the PnF for that range. It's just too upsetting, like having to shoot your own dog. Monthly:
Quick question fellars, Could you explain to me how the p&f measurment equation is figured? And what it means? Thanks!
Shooting your dog, drowning your cat and strangling your hamster.... I first bought that one at $22 But... Live and learn they say
Basically, once you find a consolidation area on the p&f chart, the number of columns sideways will equate to the number of boxes upward (or downward) after leaving said consolidation area
humm, clear as mud. LOL so example from above. $3.75 + (19x.25x3)=18 3.75 is stock price 19 is width of consolidation .25 ?????? 3 ??????? 18 is projected next consolidation area
You've almost got it. 3.75 is the price at the last point of support or LPS which is, in general, where the price backs up and shows small supply (sellers/volume) right before it breaks out of the trading range. Yes, 19 is the number of columns in the point and figure chart counted from the LPS back to the beginning of the range at the buying climax or selling climax $0.25 is the box size of the point and figure chart (you may want to look on stockchart.com 's chart school for the basics) 3 is the number of boxes needed to reverse or to go from Xs to Os or Os to Xs. $18 was the target but it overshot to $19 in the example you referenced. This is more like the game of horse shoes and not match shooting.
Hahaha, Ok i''ve got it now. I'm not very good at horse shoes, but pretty good at shooting. LOL Is light volume favorable during an area of consolidation?
If you're looking to go long, then it is favorable to see volume fade through a trading range. It generally indicates that the supply of stock available for trading is being mopped up by the big players. If the volume increases through a range that generally indicates the public is taking on more ownership and thus that the big players are distributing to them. Also, with a long bias, in the right hand side of a range (late stages) or in an uptrend you want the volume to drop on the retracements....it shows there are few who are willing to sell at that price.
Let me add to the above. If you have a long bias, you want the volume to fade (decrease) as it progresses through the trading range, however, if the trading range came from weakness, from a downtrend, then demand will need to prove itself and you need to see a sign of strength. The Composite Man (CM) aka Composite Operator (CO), was Wyckoff's representation of the aggregate of all the big money players in a stock. The CM operates in trading ranges. He is either net buying in an accumulation range or net selling in a distribution range. When he his is accumulating he will not allow the price to go too high (he's a "net" buyer) so he will sell some off at the top of a range to keep the public out until he can accumulate all that he can. He is locking stock in a box that he won't sell until it gets to much higher prices . That is why you want to see the volume shrink as the TR progresses. When he is near done the lesser big dogs take notice and start buying and the CM himself may make his last purchases and so you get a sign of strength (SOS). Since the CM owns most of the stock he can control the supply available for trading and therefore has created a shortage of supply, thus prices can rise into an uptrend where the funds and public speculators operate. While the CM is accumulating the news is bad, but in an uptrend all the news is good news. Most of the public believes it is the news and continual improvements in the fundamentals of the company itself that causes the stock to move higher, when in reality, the stock moves up because there is a shortage of stock to trade....Econ 101....supply versus demand.
