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MrMojoRisin's Journal

  #231 (permalink)
 
MrMojoRisin's Avatar
 MrMojoRisin 
Graz/Austria
 
Experience: Beginner
Platform: Sierra Chart
Trading: YC, YW, YK
Posts: 385 since Apr 2021
Thanks Given: 91
Thanks Received: 244

Monday November 29th

Re-read Nicolas Darvas' "How I made 2M in the Stock Market" on the weekend.
I think I do understand to a good degree for what he was looking for. I also think that his approach was very similar to how Livermore used to trade.

When studying Darvas, I always focused too heavily on his "Box-Method" and not which stocks he chose. Partly likely because of having been still blinded too much by fomo.
One key-thing is a stock that spiked with heavy volume.
If I have such a stock, I'll put it on my radar. I look at the industry group strength overall, look for at least one sister-stock in the same group and then try to judge how the correction is behaving.

I interpret the high-volume-high which was made as my "Pivotal Point" how Livermore describes it.

I try to "read the tape" in the correction, meaning watching full-point moves on the intraday-chart and also plotting them on my P&F-chart.
Of course that all is easier said than done, but ideally as I recongize strength, I open part of the position below the pivotal point, which also corresponds not badly with the DeVilliers & Taylor Catapult, and if the stock keeps rising, I size my full position into its strength.

I think if chosen the right stock, they have a good probability of at least breaking out to a new high. Ideally then a solid trend will develop, but I'll still have to be cautious and won't foolishly trail the S/L just behind, but will try to judge if it stays strong, or if I see significant signs of weakness.

One recent example, where definitely judgement at the exit would have been important, was the Entertainment-group taking off.

When such a scenario happens, it's the sign for me to watch it closely


VIAC


Strong spike and very high volume at the top.



It then got into its correction, which would have given me about 3 weeks time to observe and judge.


DISCA


In this case the sister-stock behaved almost identically, but it's not necessary for it to also make the same high-volume spike and Pivotal Point


VIAC P&F


Through plotting it on my P&F I get a good feeling for how it is behaving and can also lean on the DeVilliers & Taylor descriptions



Sister-stock


This is definitely a bit of an extreme case, which went not very fortunate, but I think that this type of behaviour can be the beginning of some large trends.

Also interesting is, that Darvas "Techno-fundamental approach" leaned a bit on fundamentals, such as increasing earnings per share. The technicals were definitely way more important, but I noticed that in William O'Neills CANSLIM-method, he has some of the stocks as examples that also Darvas traded.


A current example for a trade is AMD.


AMD


It had the exact same high-volume spike, the correction took longer, but now it is trending up nicely.
The sister-stock to watch is NVDA in this case. They are both semiconductors and the tech-sector is anyways a generally strong sector.

I'll definitely watch this closely and look how it develops!

Another interesting thing that came to my mind is, that some time ago, on Bloomberg they constantly showed the same interviews with the AMD-CEO and the QCOM-CEO. To such a degree that it started to become almost annoying, but I don't believe anymore that such things are coincidences.

According to Darvas, I think it would be even still yet valid to buy AMD, but I'll stay on the sidelines for now, since I have first to study deeper in that whole approach.

"Thou hast been faithful over a few things, I will make thee ruler over many things"
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  #232 (permalink)
 
MrMojoRisin's Avatar
 MrMojoRisin 
Graz/Austria
 
Experience: Beginner
Platform: Sierra Chart
Trading: YC, YW, YK
Posts: 385 since Apr 2021
Thanks Given: 91
Thanks Received: 244

Tuesday November 30th

Analyzed NIO and BLNK. They were from the Electric-Vehicle boom back in 2020.
I think NIO is a very good "Darvas-style" example.

First watch for a possible trade is STX.
It already hat a former "campaign" with a satisfactory spike.

First spike


Definitely not that easy price-action for easy "judging", but it went up a good amount, without dangerous-looking situations.




Recent Spike


It spiked again a few days ago.
Volume doesn't stand out that much, but it is noticeable.
It's a tech-stock which is good, Computer-Hardware subcategorie.

A favorable thing is, I would say, that the former runup topped around the $100 area, which maybe could be with the next runup, convincingly broken. This would be a very similar situation which was in AMD.


Former Campaign


Current Campaign


Working under the assumption, that "they" are still in the stock and will "manipulate it" possibly in a similar fashion, I try to lean with my judgement on the former "campaign", maybe expecting more of an upwards grind and not so much erratic movments.

Sister stock to choose is not clear by now.

"Thou hast been faithful over a few things, I will make thee ruler over many things"
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  #233 (permalink)
 
MrMojoRisin's Avatar
 MrMojoRisin 
Graz/Austria
 
Experience: Beginner
Platform: Sierra Chart
Trading: YC, YW, YK
Posts: 385 since Apr 2021
Thanks Given: 91
Thanks Received: 244


Wednesday December 1st

Analyzed VERI and finished DeVilliers & Taylor on Point and Figure charting.

There are some parts in the book that appear more personal, which makes the authors pretty likeable and they often emphasize that "Study creates skill" and that it will take its time.
It is said that DeVilliers is the better writer and Taylor the better trader and they have done a really good job in keeping things realistic and explaining their method in a more scientific way.
In the last part, they described the "Manipulators Campaign" and thinking about the action of a stock in these terms seems to make everything more logical.

Also came up with a "Running Relative Strength Chart".
For the stock(s) that's under my closer surveillance I intend to track the RS three times daily to get a better feel for it.


10 years

On the long time-frame I consider this a solid, favorable position


Intraday

This will hopefully get me more in touch with the stocks day to day behaviour.

The nice things about these RS-charts is, that I can compare pretty much everything to one another, like sector to subcategorie, sector to market or stocks in the same sector to each other.
Then I can also regulate its sensitivity how I want it to have by either multiplying the ratio with 100 or 1000, making different steps on the scale or choosing between 1 or 3 point reversal.
Basically another "gauge on the barometer"

"Thou hast been faithful over a few things, I will make thee ruler over many things"
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  #234 (permalink)
 
MrMojoRisin's Avatar
 MrMojoRisin 
Graz/Austria
 
Experience: Beginner
Platform: Sierra Chart
Trading: YC, YW, YK
Posts: 385 since Apr 2021
Thanks Given: 91
Thanks Received: 244

Thursday December 2nd

Stopped out in PVH for a initial loss.

Started "Fundamental Analysis for Dummies". In this one I am pretty confident I'll find the answers I was originally looking for in Security Analysis.

Worked on getting a better hold on the sector - subcategory behaviour


Tech-sector


The entire sector is definitely in a strong position


Computer Hardware


The Hardware subcategory as well


RS between them


If I look at the strength of the Hardware category in relation to the entire tech-sector, I'd say I see the following:
- Was from June to September 2020 very strong
- Started become stronger again in December 2020 troughout January 2021
- As for now, it got noticeable more strength and seems to get ahead a bit. Difficult to say how to judge this. At least it's not in a weak position, that's for sure

I think more valuable will this become, as I do the same with the rest of the sector to have a comparison.
Maybe I can recognize a bit of a seasonality when what type of category tends to heat up. Especially semiconductors will be interesting.

"Thou hast been faithful over a few things, I will make thee ruler over many things"
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  #235 (permalink)
 
MrMojoRisin's Avatar
 MrMojoRisin 
Graz/Austria
 
Experience: Beginner
Platform: Sierra Chart
Trading: YC, YW, YK
Posts: 385 since Apr 2021
Thanks Given: 91
Thanks Received: 244

Friday December 3rd

Did another RS-chart for the Semiconductors and drew index-charts for the remaning tech-sector sub-groups.
The question is, what is enough? I think of tackling the remaining sectors more through just index-charts, rather then every single S&P stock.
There are some groups that move almost identical like Airlines, Cruise Ships or Hotels and other groups like most of the Consumer Staples sector that move hardly at all. The daily updating process is definitely very important, but I also don't want to spend too much time for things that shoot above the goal.
The thing I have in mind is, getting a picture of how the capital in the market flows and getting a grasp of in which corner the highest probability of a good move occurring is.

STX seems to be still stronger than the average and AMD is currently cooling down a bit.

"Thou hast been faithful over a few things, I will make thee ruler over many things"
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  #236 (permalink)
 
MrMojoRisin's Avatar
 MrMojoRisin 
Graz/Austria
 
Experience: Beginner
Platform: Sierra Chart
Trading: YC, YW, YK
Posts: 385 since Apr 2021
Thanks Given: 91
Thanks Received: 244

Saturday December 4th

PVH recap










Interestingly I found out that I completely deviated from my plan.
Main reasons for that were, that that tiny size in connection with that long-term trade were on the edge of being able to take it really serious, even though it was just a test-trade,
and that I got so excited about my new discoveries, that I lost interest to a good degree in this trade.
Since I come more and more to the conclusion that it makes no sense of buying a breakout in such a sideways market like this, I aim to prevent that alltogether in the future.
I think there are even better odds buying into a steep rising market, despite it looking as if it was "too steep", than a trade like this.

_________________________________________________________

Started a "Live-Hindsight analysis in SPCE"


SPCE

Same "pivotal high-volume-burst spike"



And a very sharp runup in the following days.

I'm analyzing it by looking at the SPY, Industrials-sector-index, Aerospace and Defense group-index and SPCE itself and also gauging each index' relative strength to SPCE and updating every chart after the next as if always a day has passed.
I try to judge the behaviour more "freehand" and not so static with a "if this exact price, then this must happen" way of thinking.

"Thou hast been faithful over a few things, I will make thee ruler over many things"
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  #237 (permalink)
 
MrMojoRisin's Avatar
 MrMojoRisin 
Graz/Austria
 
Experience: Beginner
Platform: Sierra Chart
Trading: YC, YW, YK
Posts: 385 since Apr 2021
Thanks Given: 91
Thanks Received: 244

Monday December 6th

Worked on SPCE analysis. I think also gauging closely in relation to the sector and group index falls more into the "making things unnecessarily complicated" categorie. Just the S&P or Dow should be enough.
Interesting is, that it had its shoot-up in tandem with the S&P coming out of a correction. It then got also dragged down by the Covid-crash, but I think these very fast spikes have anyways not a very high probability of developing into a proper trend.
It seems that in most cases, they about double from the pivotal-point breakout level and then collapse.

___________________________

Finally finished the Morgan biography on the weekend. The good thing when learning about the great personalities in history is, that one realizes that they alltogether were far from being perfect. It's maybe more how they handle their difficulties and setbacks which makes them stand out, and not so much their ability to avoid them.
Morgans father alway referred to the job of a financier as "steering the economic ship through the stormy seas". Maybe it could be beneficial, seeing my capital also as kind of a ship I have to steer in and out of the market properly.

"Thou hast been faithful over a few things, I will make thee ruler over many things"
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  #238 (permalink)
 
MrMojoRisin's Avatar
 MrMojoRisin 
Graz/Austria
 
Experience: Beginner
Platform: Sierra Chart
Trading: YC, YW, YK
Posts: 385 since Apr 2021
Thanks Given: 91
Thanks Received: 244

Tuesday December 7th

Entered STX today.
The reasons why I think the odds are favorable:

- Updating my charts in the morning, I realized that the Computer-Hardware index has gone up, whereas Semiconductors are still down.
Also by observing AMD and NVDA, it might as well be wishful thinking, but it seems a bit as if strength is going out of Semiconductors and into Hardware.

- Before I entered, the intraday relative strength has gone up a few boxes

- S&P is coming with steam out of a correction, which should favor the strong stocks to get some steam as well. At least I saw that in my SPCE analysis it went that way.

_______________________________________________

Finished SPCE analysis.
It did give me some insight, but I have to be careful to not start to overcomplicate things too much. UAVS is the next one where I'll skip the group and sector to avoid overloading myself with data and also to use my time as efficient as possible.



























"Thou hast been faithful over a few things, I will make thee ruler over many things"
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  #239 (permalink)
 
MrMojoRisin's Avatar
 MrMojoRisin 
Graz/Austria
 
Experience: Beginner
Platform: Sierra Chart
Trading: YC, YW, YK
Posts: 385 since Apr 2021
Thanks Given: 91
Thanks Received: 244

Wednesday December 8th

Worked a bit on UAVS analysis, finished Darvas' "You can still make it in the market" and started Wyckoff's "Studies in tape reading"
Darvas wrote that book some 20 years after his initial success. It was a nice read, but not close as motivating as his first book. I couldn't find that uplifting spirit in it.

_________________________________________

Stock-Operation #3 Entry


Overview


Daily Candlestick


10 min Candlestick


P&F main charts


Relative strength


Other gauges


S&P Intraday

"Thou hast been faithful over a few things, I will make thee ruler over many things"
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  #240 (permalink)
 
MrMojoRisin's Avatar
 MrMojoRisin 
Graz/Austria
 
Experience: Beginner
Platform: Sierra Chart
Trading: YC, YW, YK
Posts: 385 since Apr 2021
Thanks Given: 91
Thanks Received: 244


Thursday December 9th

Gone into a correction myself today. Whereas the previous days it seemed like I'm approaching my goal with full-steam, today it slipped away further again. In a sense, the Wyckoff book made me question my current research and how I'm trying to make it work, once again.
I also realized that my motivation in the days before was fueled to a good degree by the "get rich quick"-gasoline.

Sometimes I'm wondering if mastering the market equals overcoming ones subconscious ways of self-sabotaging.

I guess most people from a working-class environment know the type of "workers-pride" which is often grounded a bit in an opposition towards wealthy people and people in charge.
It's not a bad thing at all to be a worker, but being a physically hard working person tends often to look kinda romaticised in retrospect and there can be a good solidarity between the colleagues, at least as long as no one senses another person is trying to get ahead, but in the here and now of working, in my experience, the overall situation gets worse year after year.

I want to jump off that train speeding towards the abyss and if that means abandoning everyone that's still on it, so be it!
I rather save myself first, and if I can make it to the promised land alone, I can still come back later on and help building a bridge or make the train-ride more comfortable for those not able to jump off.

"Thou hast been faithful over a few things, I will make thee ruler over many things"
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