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Continuation breakout thread

Discussion in 'Trading Strategies/Systems' started by Nortorious, Nov 1, 2014.

sentifi.com

Aussie Stock Forum Sentifi Top themes and market attention on:

  1. grah33

    grah33

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    ok. was unsure if there might be some advantage in snagging it when it's high, as trading literature seems to suggest taking a profit (either small or high), and something you wrote once mentioned a take profit (a high one). anyway, thanks for your answer.

    hey, have you ever thought about a stock market crash scenario, how you will avoid losing all your money? i'm thinking as traders , if it's something like 2007 we would be okay. a few market down days would occur and there would be enough liquidity for us to exit our positions as they would get to our stop levels. we might already be out b4 liquidity dries up. or perhaps it could happen suddenly like 70% on the first day? in that case we would all get smashed. there is much talk about shares being overpriced and many people are expecting a crash.
     
  2. History Repeats

    History Repeats

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    You can't protect against a sudden gap down or drop of 70% unless you hedge.
     
  3. Nortorious

    Nortorious

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    The literature will probably tell you that "you can't go broke taking a profit" right? Sorry to smash your dreams, this is only true if you are the broker processing the orders to buy and sell... I'll only ever take profit when my trailing stop takes me out or if I'm selling to shift the capital to something moving faster (a discretionary exit based on whether the position is either currently in a loss position or progress upwards has been slow).

    Regarding the stock market crash, believe it or not, some of these "crashes" happened after an already substantial fall in the market. If you look at 2007/08, for the XAO, and apply a 30 week weighted moving average, you will see that the XAO fell through the weighted average initially, rose back above it and then fell back through... then the downward slide started.

    If it dropped 70% in one day, I would probably suggest you aren't in a very good stock (technically) anyway! For the whole market to be hit with such a drop is unlikely without a few warning signs prior to it happening (in my opinion).

    My advice to you would be don't listen to what many people say (you referred to many people expecting a crash). If you follow the many, you'll never beat them or the market. Every expert has tipped a housing market crash for the last 20 years.... and you know what. If they keep saying it, one day they will be right. The same as if you said "I'm going to die today" every day. Eventually you too would be right....
     
  4. grah33

    grah33

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    thank you Nort for some more helpful tips. lately i've been a little worried about what can happen to my money 'suddenly' , so i have to ask these survival types of questions. you know though, other leveraged instruments like currency, are riskier. they had a 'flash crash' jan 15th last year - 4000 pips gap (worst case of one of the cross currencies). it blew people's accounts , and many had massive debts. leveraged instruments are more dangerous by nature since you have to use leverage to trade.

    another good indicator is 30ema. i use this one when assessing the daily share trends. if it's within 30ema, the pullbacks aren't too deep, it tends to be a nice candidate for a trend trade.
     
  5. grah33

    grah33

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    to be fair though, there still may be some catastrophe type of risk to us traders. i looked at the daily chart (online) and there wasn't a great deal of warning before it occurred. it was going up, then a usual consolidation, a few down days (just a few), then a big down day, then the gap...so, be careful everyone. and if you lose all your money, don't worry about it. worrying doesn't help. or put some of your eggs in a different basket if you're very worried

    https://www.google.com.au/search?q=...hWBEpQKHX9kDOUQ_AUIBigB#imgrc=jjUXhXYEWg-0uM:
     
  6. Triathlete

    Triathlete Keep it Simple..!

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    I have to disagree with you.
    With the chart you posted .

    We could already see that the market had begun to top out in August 1987 at least two months before the crash in Oct 1987.

    I would say that many experienced technical traders at the time would have either hedged their positions or closed out. Some would have also taken some short position based on what they were seeing.

    ''Trade on what you see not what you think."

    We could see an EW5 had formed which had definitely moved beyond what is usual for that wave structure , so that would have also warned us of a correction was very likely. IMHO
     
  7. grah33

    grah33

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    just wondering Nort and other share traders , what is your approach to scheduled news (since reporting season is upon us). are u avoiding getting into trades with earnings etc reports coming up on known dates? or u don't care if shares start gapping (up or down) the next day on you?


    TRI: i'll be looking at that soon (avoiding catastrophes comes first)
     
  8. Nortorious

    Nortorious

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    +1 for this post
     
  9. Nortorious

    Nortorious

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    I personally don't follow/worry about the news as I'm too busy to be paying attention on reporting dates etc.

    With the right position size and risk management, it's not an issue. You might get stopped out even if you weren't expecting it or you may have a nice run that you didn't foresee. Most charts are able to put you in favourable situations when you can read them but there are also times when you can be blindsided.... that's trading.
     
  10. grah33

    grah33

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    Makes sense Nort, makes sense. generally speaking why on earth would I consider exiting b4 reports when the investors aren't even doing that? They're waiting for the news, and hoping it's going to be good. Thank you.



    Tri: Nort knows more so listen to him of course... although I do see that around September consolidation occurs, and in the bigger picture it's when 2480 is broken that the heavy selling for a few days occurs. I don't know if all of your long term investing positions would have hit stop loss by then, in that heavy week of selling before the gap occurred (hopefully they would). but the gap doesn't seem too big. Perhaps it's the people who don't bother with stop losses that get into trouble. And that is why i suspect many people lost lots of money in 2008 crash – they assumed the market would turn around.
     
  11. Triathlete

    Triathlete Keep it Simple..!

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    The consolidation that you mention in my opinion was the Distribution phase at the market top as players where starting to exit the market.....remember using the wave theory we had reached the peak....

    I said previously that the chart you put up was on an EW5,so if the wave theory holds up we should be on the lookout for the market to retrace, so now would be looking for an exit.

    Since you like using daily charts here are some of the exits that could have been taken at the time prior to the crash.

    after the high of 2736.61 On the 25/08/1987

    1. 3 bar count back or a Swing exit @ 2634.57 on the 1/09/1987

    2. Dow exit @ 2499.36 on the 21/09/1987.

    If using the weekly chart we would have exited as below...

    1. 3 bar count back @ 2592 on the 02/09/1987.

    2. Dow exit @ 2499 on the 21/09/1987.


    In Nov 2007 the XAO peaked on a wave 5 and the market retraced as expected.

    I like using the wave theory because although not full proof it can give a guide as to the likely direction of the market and price levels it could reach and when used with other techniques can be quite handy in your trading.:)
     
  12. Boggo

    Boggo

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    Seems to be more stability and consistency in the weekly charts at the moment, or for a while now.

    The XAO turned around on the min Wave C on the way down, it's in a similiar area on the way up but generally it seldom repeats the down pattern.

    Decision time at the moment but I am leaning towards continuation towards 5900 area.

    Just my :2twocents

    (click to expand)
     

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  13. Triathlete

    Triathlete Keep it Simple..!

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    Nice looking inverted Head and Shoulders pattern. If the pattern holds we can extend price 100% of the range between the head and the neckline which brings us towards 6120 that would be nice....Time will tell..!!
     
  14. grah33

    grah33

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    tri: you seem to trust in those indicators a lot . don't know if that is a good thing... i don't think though personally if i would follow those wave predictions and start exiting all my positions. to me there isn't much forecast of it happening before it did in that daily chart. but i think many or most of my positions may have stopped out by then.
     
  15. Wyatt

    Wyatt

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    Hi All,

    IFN looking to bust out towards old highs. Better still to infigen and beyond. What a great stock.

    IFN.png

    Cheers,
     
  16. Wyatt

    Wyatt

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    Hi All,

    Looks like SSM is a fair chance to run higher, nice volume today. Great long term chart, one of the rare few that starts in the bottom left and ends at the top right of pane.

    SSM.png

    Fortunately I do own this one.

    Cheers,
    Wyatt
     
  17. Trendnomics

    Trendnomics

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    Currently riding this one nicely in both my portfolios.
     
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