Trading stocks based on breakouts of chart patterns - futures io
futures io



Trading stocks based on breakouts of chart patterns


Discussion in Trading Journals

Updated
      Top Posters
    1. looks_one MichaelWesten with 20 posts (16 thanks)
    2. looks_two sharp2be with 1 posts (0 thanks)
    3. looks_3 Quick Summary with 1 posts (0 thanks)
    4. looks_4 phillip with 1 posts (0 thanks)
    1. trending_up 3,829 views
    2. thumb_up 17 thanks given
    3. group 5 followers
    1. forum 25 posts
    2. attach_file 39 attachments




Welcome to futures io: the largest futures trading community on the planet, with well over 125,000 members
  • Genuine reviews from real traders, not fake reviews from stealth vendors
  • Quality education from leading professional traders
  • We are a friendly, helpful, and positive community
  • We do not tolerate rude behavior, trolling, or vendors advertising in posts
  • We are here to help, just let us know what you need
You'll need to register in order to view the content of the threads and start contributing to our community.  It's free and simple.

-- Big Mike, Site Administrator

(If you already have an account, login at the top of the page)

 
Search this Thread
 

Trading stocks based on breakouts of chart patterns

(login for full post details)
  #1 (permalink)
 MichaelWesten 
Petah-Tikva, Israel
 
Experience: Intermediate
Platform: MultiCharts
Broker: Interactive Brokers
Trading: Stocks
 
Posts: 20 since May 2011
Thanks: 0 given, 16 received

Hello All,
I am starting this thread to share with you my current trading activity. This is my first try of online documenting my trades and I hope it will contribute to my "trader's personality" and will provide an interesting reading for this forum. This is a real money account.

Background
I am 31 years old and I have a full-time job as an Embedded Software Engineer. Before I continue, I would like to tell you that I'm not a native English speaker, so please be lenient with me about my writing.
I have been introduced to the world of trading about two and half years ago by a friend and since then, I have tried to learn everything I could about trading. Because I believe that you must try before you decide if you like something, I tried to trade stocks fundamentally, tried to do option strategies, tried to trade stocks according to technical analysis and maybe some other things as well.
As you can probably guess, in the end, I lost money. No point in sugar coating it.

In the past year, I have been exposed to 2 books that changed my way of thinking. I am talking about:
1. Diary of a Professional Commodity Trader: Lessons from 21 Weeks of Real Trading by Peter L. Brandt.
2. Trade Your Way to Financial Freedom by Van Tharp.

The main point in these books, as I understand it, is that it doesn't really matter what method of trading you use. The important thing is how you manage your risk, how you handle your losses, what is the size of your position and what is the expectancy of your trading system.

Based on this understanding, I am now trying to trade and hopefully, this time it will be different.

Trading system
My trading system is a discretionary system. I am trying to identify classical chart patterns (Triangles, H&S, Wedges, etc.) in stock charts and trade the breakouts of those patterns.
I use two different time frames for each stock, weekly and daily, with a preference of trading patterns on the weekly charts. I don't use indicators, nor do I use volume. The take profit target is determined by the size of the pattern. The stoploss is based on something called Last Day Rule. This means that if I go long, the stoploss will be 1 tick below the low of the day of the breakout. If I go short, the stoploss will be 1 tick above the high of the day of the breakout. The stoploss can be moved only in the direction of the trade. The position size is determined by my risk management (see below). This method was taken from Peter L. Brandt book. I will try to detail more in the following posts.

My risk management is as follows:
1. I trade only potential moves of more than 200 ticks (2$).
2. For trades with target between 200 ticks to 1000 ticks, I risk 0.5% (half a percent) of my total equity.
3. For trades with target above 1000 ticks, I risk 0.8% of my total equity.
4. I try to take into an account the commissions.
5. In any case, the maximum distance between the breakout point and the stoploss can't be greater than half of the distance between the breakout point and the target point. This is something that I might change in the future.

The major problem, for me at least, with this trading system, is that most of my trades will be losers. That is because I aim to win only %20-%30 of my trades. This percentage will be sufficient, I hope, to have a positive expectancy. Therefore, I will have to be mentally very strong because most of the time I will be wrong and this is a part I fear most. I hope you will help me overcome my fears.

One final point before I continue. I chose to trade stocks on daily and weekly charts because I have a full time job and I can only dedicate between 1-2 hours per day for trading. This time should be enough to follow my current trades, enter new ones and try to find patterns on new and existing stocks.

In all honesty, if I had a 100K account I will probably move to trading futures instead of stocks with this system and maybe do it full-time and with shorter time-frames. BUT, I don't have a 100K account so this is just a thought for now.

Current status
I have an account with Interactive brokers. The starting value for this journal is $23,000. I use multicharts DT to do the charting part but I enter the trading commands using IB's program.
I started my trading on the 10-Nov-11. Since then, I made 7 trades and I currently have 10 open positions. I will add the documentation of each trade in the following days.
I live in a GMT+2 area, so the start of the trading day in the NYSE is at 16:30 my time. The good thing about my system is that I can put the trading orders when the market is still close so I don't have to be online during trading hours.

That's it. I will now finish this post and try to add as quickly as possible posts documenting my previous and current trades. Hopefully, I will finish describing them before I make new trades so I won't play catch-up.
For future trades, I will try to upload them as soon as I make them.

I will appreciate any comments and/or suggestions.

Visit my futures io Trade Journal Started this thread Reply With Quote
The following 5 users say Thank You to MichaelWesten for this post:

Can you help answer these questions
from other members on futures io?
PowerLanguage: change bars types, size and number of min …
MultiCharts
1-min Intrabar indicator
MultiCharts
Multichart NET set signal parameters different than the …
MultiCharts
Needing harmonic patterns indicator
TradeStation
Tradenlernen martin popov
Trading Reviews and Vendors
 
Best Threads (Most Thanked)
in the last 7 days on futures io
How much do you know about Bitcoin?
114 thanks
I finally blew up an account
44 thanks
FIO Journal Challenge - April 2021 w/Jigsaw Trading
38 thanks
Big Mike in Ecuador
27 thanks
The tiyfTradePlanFactory indicator
25 thanks
 
(login for full post details)
  #3 (permalink)
 MichaelWesten 
Petah-Tikva, Israel
 
Experience: Intermediate
Platform: MultiCharts
Broker: Interactive Brokers
Trading: Stocks
 
Posts: 20 since May 2011
Thanks: 0 given, 16 received


Hi,
Before I start to describe the trades I did, I want to say that each post will describe what happen in a specific day. For each post, I will have the following sections:
1. "New Orders" - describe the new orders that were entered in that day.
2. "Changes in existing orders" - describe changes in existing orders (cancellations, update of quantity or price).
3. "New Positions" - describe the new positions in that day.
4. "Positions closed" - describe the positions that were closed in that day.
5. "Changes in open positions" - describe changes that were made in existing positions (mainly changing the stoploss).

OK, now I will describe the 1st day, which was the 8th of November, 2011.

New Orders

ESRX - Identified Bottom H&S on Daily chart, pattern length is about 2 months. see attached file "esrx pre-market".

Breakout to the upside was set to 46.86, stoploss at 45.08, target at 58.85. Because the target was more than $10, the risk was 0.8% of $23K, which is $184. Therefore, I set the order for 108 units.

The order was given before the market was opened.

New Positions

ESRX - Buy order was executed on the same day at price of 46.86 for 108 units. Stoploss at 45.08, target at 58.85. See attached file "esrx"

That's it for 8-Nov-2011.

Attached Thumbnails
Click image for larger version

Name:	esrx pre-market.png
Views:	119
Size:	70.5 KB
ID:	55764   Click image for larger version

Name:	esrx.png
Views:	97
Size:	70.4 KB
ID:	55765  
Visit my futures io Trade Journal Started this thread Reply With Quote
The following 2 users say Thank You to MichaelWesten for this post:
 
(login for full post details)
  #4 (permalink)
 MichaelWesten 
Petah-Tikva, Israel
 
Experience: Intermediate
Platform: MultiCharts
Broker: Interactive Brokers
Trading: Stocks
 
Posts: 20 since May 2011
Thanks: 0 given, 16 received

On the 10th of November, I looked at the charts only after the trading begun, because I was occupied by my work. I usually try not to work like that and to set up my orders well ahead of the start.

New Orders

AAPL- Identified bearish flag, pattern length is about 1 month. see attached file.

Breakout down was set to $394, stoploss at $397.3, target at $377. Because the target was more than $10, the risk was 0.8% of $23K, which is $184. Therefore, I set the order for 45 units.

New Positions

AAPL - Sell order was executed on the same day at price of 394 for 45 units. Stoploss at 397.3, target at 377. In the attached file, this day is represented by the last bar on the chart. You can see the open at about 397 and from there it went downhill.

Positions closed
AAPL - I closed the position at $384.45 for a net gain of $427.75. In retrospect, it was a mistake to close the position because after a few days, AAPL hit the $377 target, without going to $397.3 in the way. However, since it was only my 2nd trade, I think I got nervous and because of that, I moved the stoploss during the trading day and it was executed.

That's it for 10-Nov-2011.

Attached Thumbnails
Click image for larger version

Name:	aapl.png
Views:	90
Size:	64.2 KB
ID:	55767  
Visit my futures io Trade Journal Started this thread Reply With Quote
The following user says Thank You to MichaelWesten for this post:
 
(login for full post details)
  #5 (permalink)
 MichaelWesten 
Petah-Tikva, Israel
 
Experience: Intermediate
Platform: MultiCharts
Broker: Interactive Brokers
Trading: Stocks
 
Posts: 20 since May 2011
Thanks: 0 given, 16 received

Hi,
Before I start describing this day, please understand that I'm now describing past trades and although most of the data that I write is written in my excel sheet, some things I need to recreate from memory, so there may be some minor mistakes. Therefore, I decided to avoid describing new orders or changes in orders because I don't have this information. I will describe new orders when I have finished describing the past.

Another thing is that I used to calculate the risk from the current equity value at the time of entering the order. Therefore, you will see some minor inconsistencies regarding the number of units in the order description of each stock and the amount of risk I specified. However, starting from 28-Nov (which is when I write this post), I will calculate the risk as a percentage of the equity value at the start of the month, e.g. all the trades I will do in December will be according to the equity value I have on the 1st of December.

Beginning with this post, I will add two horizontal lines on each chart that will show:
1. The location of the stoploss - Red line.
2. The location of the Buying/selling point - Yellow line

New Positions

DISH - Identified sym. triangle on daily chart, pattern length is about 2 month. see file "dish pre-market". Buy order was executed at price of $26.2 for 89 units. Stoploss at $25.44 (see file "dish"), target at $29.2.

LOW - Identified up channel on daily chart, pattern length is about 2 month. see file "low pre-market". Buy order was executed on the same day at price of $23.94 for 89 units. Stoploss at $23.19 (see file "low"), target at $26.75. Because the stoploss was much closer than was anticipated, I could afford buying more units, so I bought 68 units at $23.44, making it a total of 157 units at $23.723439

That's it for 14-Nov-2011.

Attached Thumbnails
Click image for larger version

Name:	dish pre-market.png
Views:	75
Size:	70.9 KB
ID:	55797   Click image for larger version

Name:	dish.png
Views:	65
Size:	71.1 KB
ID:	55798   Click image for larger version

Name:	low pre-market.png
Views:	68
Size:	70.0 KB
ID:	55799   Click image for larger version

Name:	low.png
Views:	71
Size:	70.7 KB
ID:	55800  
Visit my futures io Trade Journal Started this thread Reply With Quote
The following 2 users say Thank You to MichaelWesten for this post:
 
(login for full post details)
  #6 (permalink)
 MichaelWesten 
Petah-Tikva, Israel
 
Experience: Intermediate
Platform: MultiCharts
Broker: Interactive Brokers
Trading: Stocks
 
Posts: 20 since May 2011
Thanks: 0 given, 16 received

Positions closed

DISH - I closed the position at $23.36 for a net loss of $76.76. If you calculate the difference between my entry point and the exit point, you will reach to a loss of $253. However, the actual loss is really $76.76 because the stock payed a dividend of $2 a share and the 15th of November was the ex-date. That's why stock tumbled and my stoploss was hit. In the future, I may have to check this in advance. See attached file

LOW - I closed the position at $23.19 for a net loss of $86.75. See attached file. Regarding this stock, I think that I entered the buy order before the 14th, and I didn't adjust it according to the advancement of the pattern. This means that although the entry price was once beyond the limits of the pattern, on the 14th, it was inside the pattern and it was wrong to enter the position then. I should pay close attention to orders for stocks with patterns that are slanted up or down.

That's it for 15-Nov-2011.

Attached Thumbnails
Click image for larger version

Name:	dish.png
Views:	66
Size:	71.4 KB
ID:	55804   Click image for larger version

Name:	low.png
Views:	62
Size:	70.5 KB
ID:	55805  
Visit my futures io Trade Journal Started this thread Reply With Quote
 
(login for full post details)
  #7 (permalink)
 MichaelWesten 
Petah-Tikva, Israel
 
Experience: Intermediate
Platform: MultiCharts
Broker: Interactive Brokers
Trading: Stocks
 
Posts: 20 since May 2011
Thanks: 0 given, 16 received

New Positions

CAT - Identified rectangle on daily chart, pattern length is about 1 month. see attached file. Buy order was executed at price of $98.09 for 57 units. Stoploss at $96.02, target at $107.09.

Positions closed

ESRX - My stoploss was hit at $46.152 for a net loss of $78.46. This is not the original location of the stoploss because I have changed the stoploss location to just below the low of 10-Nov. This was done because on the 10th there was a breach of the "ice line" (term from Brandt's book), following a breakout above the ice line on the 11th. Following this kind of breach and breakout, Brandt wrote he usually advances the stoploss and so do I.

CAT - My stoploss was hit at $96.02 for a net loss of $119.99. Apparently, I bought almost at the high of the day.

That's it for 16-Nov-2011.

Attached Thumbnails
Click image for larger version

Name:	cat.png
Views:	65
Size:	57.1 KB
ID:	55807   Click image for larger version

Name:	esrx.png
Views:	60
Size:	67.1 KB
ID:	55808  
Visit my futures io Trade Journal Started this thread Reply With Quote
 
(login for full post details)
  #8 (permalink)
 MichaelWesten 
Petah-Tikva, Israel
 
Experience: Intermediate
Platform: MultiCharts
Broker: Interactive Brokers
Trading: Stocks
 
Posts: 20 since May 2011
Thanks: 0 given, 16 received

New Positions

SPY - Identified sym. triangle on daily chart, pattern length is about 1 month. see attached file. Buy order was executed at price of $123.49 for 120 units. Stoploss at $124.49, target at $115.49.

That's it for 17-Nov-2011.

Attached Thumbnails
Click image for larger version

Name:	spy.png
Views:	72
Size:	73.3 KB
ID:	55817  
Visit my futures io Trade Journal Started this thread Reply With Quote
 
(login for full post details)
  #9 (permalink)
 MichaelWesten 
Petah-Tikva, Israel
 
Experience: Intermediate
Platform: MultiCharts
Broker: Interactive Brokers
Trading: Stocks
 
Posts: 20 since May 2011
Thanks: 0 given, 16 received

New Positions

MU - Identified double top on weekly chart, pattern length is about 2 years. see attached file. Although the price reached $4 on October, I decided it might be worth while to try and catch this move again. It is against the rules but I did it anyway. Sell order was executed at price of $6.37 for 105 units. Stoploss at $7.43 (above high of week of 16-Sep), target at $3. The target was set randomly by me, because the pattern height indicated the price should go to zero...

USO - Identified up channel on daily chart, pattern length is about 2 months. see attached file. Sell order was executed at price of $37.8 for 173 units. Stoploss at $38.44, target at $34.2.

That's it for 18-Nov-2011.

Attached Thumbnails
Click image for larger version

Name:	mu.png
Views:	56
Size:	85.8 KB
ID:	55826   Click image for larger version

Name:	uso.png
Views:	69
Size:	74.0 KB
ID:	55827  
Visit my futures io Trade Journal Started this thread Reply With Quote
 
(login for full post details)
  #10 (permalink)
 MichaelWesten 
Petah-Tikva, Israel
 
Experience: Intermediate
Platform: MultiCharts
Broker: Interactive Brokers
Trading: Stocks
 
Posts: 20 since May 2011
Thanks: 0 given, 16 received


New Positions

AA - Identified broadening ascending triangle on daily chart, pattern length is about 2 months. See attached file. Sell order was executed at price of $9.47 for 300 units. Stoploss at $9.87, target at $7.5.

AIXG - Identified rectangle on daily chart, pattern length is about 2 months. See attached file. Sell order was executed at price of $12.25 for 170 units. Stoploss at $12.9, target at $7.3.

AMZN - Identified broadening ascending wedge on weekly chart, pattern length is about 1 year. Attached file shows this pattern on the daily chart. Sell order was executed at price of $186.06 for 28 units. Stoploss at $193.4, target at $125.

BP - Identified symmetrical triangle on daily chart, pattern length is about 1 month. See attached file. Sell order was executed at price of $41.75 for 89 units. Stoploss at $42.94, target at $38.3.

YHOO - Identified up channel on daily chart, pattern length is about 3 months. See attached file. Sell order was executed at price of $15.1 for 220 units. Stoploss at $15.7, target at $12.2.

That's it for 21-Nov-2011.

Attached Thumbnails
Click image for larger version

Name:	aa.png
Views:	65
Size:	63.9 KB
ID:	55853   Click image for larger version

Name:	aixg.png
Views:	62
Size:	63.8 KB
ID:	55854   Click image for larger version

Name:	amzn.png
Views:	59
Size:	82.5 KB
ID:	55855   Click image for larger version

Name:	bp.png
Views:	57
Size:	66.5 KB
ID:	55856   Click image for larger version

Name:	yhoo.png
Views:	60
Size:	79.2 KB
ID:	55857  
Visit my futures io Trade Journal Started this thread Reply With Quote
The following user says Thank You to MichaelWesten for this post:
 
(login for full post details)
  #11 (permalink)
 MichaelWesten 
Petah-Tikva, Israel
 
Experience: Intermediate
Platform: MultiCharts
Broker: Interactive Brokers
Trading: Stocks
 
Posts: 20 since May 2011
Thanks: 0 given, 16 received

New Positions

CAT - Identified rectangle on daily chart, pattern length is about 1 month. See attached file. This is the same rectangle from a few days ago. Sell order was executed at price of $88.92 for 48 units. Stoploss at $91.23, target at $79.92.

Positions closed

AMZN - My stoploss was hit at $193.45 for a net loss of $208.92. See attached file

That's it for 22-Nov-2011.

Attached Thumbnails
Click image for larger version

Name:	cat.png
Views:	50
Size:	60.8 KB
ID:	55859   Click image for larger version

Name:	amzn.png
Views:	68
Size:	86.4 KB
ID:	55860  
Visit my futures io Trade Journal Started this thread Reply With Quote
 
(login for full post details)
  #12 (permalink)
 MichaelWesten 
Petah-Tikva, Israel
 
Experience: Intermediate
Platform: MultiCharts
Broker: Interactive Brokers
Trading: Stocks
 
Posts: 20 since May 2011
Thanks: 0 given, 16 received

New Positions

JNJ - Identified symmetrical triangle on daily chart, pattern length is about 4 months. See attached file. Sell order was executed at price of $62.3 for 117 units. Stoploss at $63.21, target at $54. The stoploss here is above the high of the day before the day of breakout. This is because the breakout day range was almost entirely outside of the pattern.

LOGI - Identified rounding top on yearly chart, pattern length is about 2.5 years. See attached file. Sell order was executed at price of $7.4 for 430 units. Stoploss at $7.69, target at $4.4. The pattern here is far from being a perfect example for a rounding top, but I thought it was worth the risk.

That's it for 23-Nov-2011.

Attached Thumbnails
Click image for larger version

Name:	jnj.png
Views:	59
Size:	81.5 KB
ID:	55861   Click image for larger version

Name:	logi.png
Views:	55
Size:	83.5 KB
ID:	55862  
Visit my futures io Trade Journal Started this thread Reply With Quote
 
(login for full post details)
  #13 (permalink)
 MichaelWesten 
Petah-Tikva, Israel
 
Experience: Intermediate
Platform: MultiCharts
Broker: Interactive Brokers
Trading: Stocks
 
Posts: 20 since May 2011
Thanks: 0 given, 16 received

New Positions

AMZN - Identified broadening ascending wedge on weekly chart, pattern length is about 1 year. Attached file shows this pattern on the daily chart. Sell order was executed at price of $187 for 25 units. Stoploss at $194.61, target at $125.

Positions closed

SPY - My take profit order was executed at $115.49 for a net profit of $958. The order was executed outside of RTH (regular trading hours) on 11:09 my time, which is 4:09am ET. This was very fortunate, as the day's low was above this price. (the skepticals can look at IB.jpg)

That's it for 25-Nov-2011.

Attached Thumbnails
Click image for larger version

Name:	amzn.png
Views:	57
Size:	86.7 KB
ID:	55865   Click image for larger version

Name:	spy.png
Views:	58
Size:	71.6 KB
ID:	55866   Click image for larger version

Name:	IB.JPG
Views:	53
Size:	36.8 KB
ID:	55868  
Visit my futures io Trade Journal Started this thread Reply With Quote
The following 3 users say Thank You to MichaelWesten for this post:
 
(login for full post details)
  #14 (permalink)
 MichaelWesten 
Petah-Tikva, Israel
 
Experience: Intermediate
Platform: MultiCharts
Broker: Interactive Brokers
Trading: Stocks
 
Posts: 20 since May 2011
Thanks: 0 given, 16 received

Positions closed

LOGI - My stoploss was hit at $8.05 for a net loss of $283.8. See attached file. The original stoploss was $7.69 but because the stock opened much higher than that, it was triggered and executed at $8.05. That's the problem with stocks as opposed to futures, which trade all the time. I think I will not try to enter LOGI again based on this pattern, because it was not an accurate pattern to begin with.

CAT - My stoploss was hit at $91.23 for a net loss of $112.88. See attached file.

That's it for 28-Nov-2011.

Attached Thumbnails
Click image for larger version

Name:	log.png
Views:	51
Size:	82.5 KB
ID:	55921   Click image for larger version

Name:	cat.png
Views:	52
Size:	61.3 KB
ID:	55922  
Visit my futures io Trade Journal Started this thread Reply With Quote
 
(login for full post details)
  #15 (permalink)
 MichaelWesten 
Petah-Tikva, Israel
 
Experience: Intermediate
Platform: MultiCharts
Broker: Interactive Brokers
Trading: Stocks
 
Posts: 20 since May 2011
Thanks: 0 given, 16 received

Hi,

I finished describing all of my trades and positions, so I would like to write a short summary of my status and open positions at this point:

I have made 17 trades so far, 9 of them are already closed, for a total net profit of $418.19. I don't have any new orders in the system as of this moment, but if I will insert orders today, I will of course update the journal.

My open positions are:

MU - Short at price of $6.37 for 105 units. Stoploss was moved to $7.01 (because of "ice line" breach), target at $3.

USO - Short at price of $37.8 for 173 units. Stoploss at $38.44, target at $34.2.

AA - Short at price of $9.47 for 300 units. Stoploss at $9.87, target at $7.5.

AIXG - Short at price of $12.25 for 170 units. Stoploss at $12.9, target at $7.3.

BP - Short at price of $41.75 for 89 units. Stoploss was moved to $41.14, target at $38.3. I moved the stoploss because of risk management. With BP, I reached to price $39.41, which is 111 ticks from my target and 353 ticks from my original stoploss which was at $42.94. It is poor risk management to risk 353 ticks for a possible gain of 111 ticks. Therefore, I moved the stoploss to 1 tick higher than the close of the 22nd, because on the 23rd, the stock gaped down. In retrospect, maybe I should have moved the stoploss to $40.52, which was 111 ticks from $39.41, making it a better risk/reward ratio. attached file

YHOO - Short at price of $15.1 for 220 units. Stoploss at $15.7, target at $12.2.

JNJ - Short at price of $62.3 for 117 units. Stoploss at $63.21, target at $54.

AMZN - Short at price of $187 for 25 units. Stoploss at $194.61, target at $125.

That's it for now.

Attached Thumbnails
Click image for larger version

Name:	bp.png
Views:	52
Size:	65.7 KB
ID:	55923  
Visit my futures io Trade Journal Started this thread Reply With Quote
The following user says Thank You to MichaelWesten for this post:
 
(login for full post details)
  #16 (permalink)
 MichaelWesten 
Petah-Tikva, Israel
 
Experience: Intermediate
Platform: MultiCharts
Broker: Interactive Brokers
Trading: Stocks
 
Posts: 20 since May 2011
Thanks: 0 given, 16 received

Hi,

The system I made was originally for futures, where calculation was done in ticks. For stocks, however, the number of ticks has different meaning depending on the price of the stock, e.g. for a stock priced at $400, 200 ticks ($2) are about %0.5 movement, while for a stock priced $4, 200 ticks are %50 movement.

Therefore, I changed my risk management to be based on percentage instead of dollar value. From now on, I will check the projected move in percentage terms:
1. If the move is bigger than %18, I will set the maximum stoploss at a third (1/3) of the size of the move.
2. If the move is bigger than %6, I will set the maximum stoploss at a fifth (1/5) of the size of the move.
3. If the move is less than %6, I will not enter the deal.
4. If the stoploss according to the LDR (last day rule) is bigger than the maximum stoploss (as determined by rules 1&2), I will not enter the deal.

Have a nice day.

Visit my futures io Trade Journal Started this thread Reply With Quote
 
(login for full post details)
  #17 (permalink)
 MichaelWesten 
Petah-Tikva, Israel
 
Experience: Intermediate
Platform: MultiCharts
Broker: Interactive Brokers
Trading: Stocks
 
Posts: 20 since May 2011
Thanks: 0 given, 16 received

Hi,

I'm writing this post 2.5 hours before the trading day ends and it was not a good day so far.

New Orders

BAC - Identified descending triangle on the daily chart, pattern length is about 3 months. see attached file.

Breakout to the downside was set to 5.08, stoploss at 5.29, target at 3.3. Because the project move is more than %18, the risk was 0.8% of $23K, which is $184. Therefore, I set the order for 834 units.

DISH - Identified symmetrical triangle on the daily chart, pattern length is about 2 months. see attached file. I traded this pattern to the upside 2 weeks ago (and lost). I'm now trying to go for the downside.

Breakout to the downside was set to 23.09, stoploss at 24.19, target at 17.09. Because the project move is more than %18, the risk was 0.8% of $23K, which is $184. Therefore, I set the order for 165 units.

GE - Identified broadening ascending triangle on the daily chart, pattern length is about 4 months. see attached file.

Breakout to the downside was set to 14.65, stoploss at 15.16, target at 11.65. Because the project move is more than %18, the risk was 0.8% of $23K, which is $184. Therefore, I set the order for 353 units.

New Positions

BAC - Sell order was executed at price of $5.08 for 834 units. Stoploss at $5.29, target at $3.3.

Positions closed

AMZN - My stoploss was hit at $194.985 for a net loss of $201.63. This is the second time I lose on this pattern with this stock, so I will stop for now and try to analyze the chart again.

USO - My stoploss was hit at $38.464 for a net loss of $116.91.

YHOO - My stoploss was hit at $15.71 for a net loss of $136.4.

BP - My stoploss was hit at $41.14 for a net profit of $52.29. This was the trailing stoploss I wrote about 2 posts ago, and I should have moved it more forward.

That's it for 29-Nov-2011.

Attached Thumbnails
Click image for larger version

Name:	bac.png
Views:	53
Size:	85.8 KB
ID:	55958   Click image for larger version

Name:	dish.png
Views:	52
Size:	87.6 KB
ID:	55959   Click image for larger version

Name:	ge.png
Views:	47
Size:	89.5 KB
ID:	55960  
Visit my futures io Trade Journal Started this thread Reply With Quote
 
(login for full post details)
  #18 (permalink)
 MichaelWesten 
Petah-Tikva, Israel
 
Experience: Intermediate
Platform: MultiCharts
Broker: Interactive Brokers
Trading: Stocks
 
Posts: 20 since May 2011
Thanks: 0 given, 16 received

Another bad day...

New Orders

DIS - Identified down channel on the weekly chart, pattern length is about 3 months. see attached file.

Breakout to the upside is set to 37.01, stoploss at 33.75, target at 48.5. Because the project move is more than %18, the risk was 0.8% of $23K, which is $184. Therefore, I set the order for 55 units.

GLD - Identified symmetrical triangle on the daily chart, pattern length is about 3 months. see attached file.

Breakout to the upside is set to 172, stoploss at 169.05, target at 205. Because the project move is more than %18, the risk was 0.8% of $23K, which is $184. Therefore, I set the order for 61 units.

JNJ - Identified symmetrical triangle on the daily chart, pattern length is about 4 months. see attached file.

Breakout to the upside is set to 65.39, stoploss at 63.79, target at 73.9. Because the project move is less than %18, the risk was 0.5% of $23K, which is $115. Therefore, I set the order for 70 units.
This is a reverse of the trade I had last week of shorting JNJ.

NVDA - Identified rectangle on the daily chart, pattern length is about 4 months. see attached file.

Breakout to the upside is set to 16.14, stoploss at 15.19, target at 21.8. Because the project move is more than %18, the risk was 0.8% of $23K, which is $184. Therefore, I set the order for 185 units.

VIP - Identified H&S bottom on the daily chart, pattern length is about 4 months. see attached file.

Breakout to the upside is set to 12, stoploss at 11.6, target at 15. Because the project move is more than %18, the risk was 0.8% of $23K, which is $184. Therefore, I set the order for 427 units.

Changes in existing orders

I canceled the orders for DISH and GE because they are not close anymore to the pattern boundaries.

Positions closed

AIXG - My stoploss was hit at $13.16 for a net loss of $156.7.

JNJ - My stoploss was hit at $64 for a net loss of $267.56. The loss was greater than anticipated because of 2 things. First, the gap today at the opening. Second, the dividend they gave.

Changes in open positions

BAC - I moved the stoploss higher to 5.44 (away from the price) before the opening because I didn't want it to be caught on the hugh opening. So far, I have been right about it, as BAC only went lower. I have moved it now to 5.38 and I will try to move the stoploss back to the original position at 5.29 tomorrow.

That's it for 30-Nov-2011.

Attached Thumbnails
Click image for larger version

Name:	dis.png
Views:	58
Size:	96.9 KB
ID:	56029   Click image for larger version

Name:	gld.png
Views:	62
Size:	85.7 KB
ID:	56030   Click image for larger version

Name:	jnj.png
Views:	51
Size:	98.7 KB
ID:	56031   Click image for larger version

Name:	nvda.png
Views:	45
Size:	91.5 KB
ID:	56032   Click image for larger version

Name:	vip.png
Views:	50
Size:	86.6 KB
ID:	56033  
Visit my futures io Trade Journal Started this thread Reply With Quote
The following user says Thank You to MichaelWesten for this post:
 
(login for full post details)
  #19 (permalink)
 Big Mike 
Site Administrator
Swing Trader
Data Scientist & DevOps
Manta, Ecuador
 
Experience: Advanced
Platform: Custom solution
Trading: Futures & Crypto
 
Big Mike's Avatar
 
Posts: 50,093 since Jun 2009
Thanks: 32,554 given, 98,581 received

Nicely done on the journal, I am looking forward to more.



I'm also a fan of Burn Notice, so you are 2 for 2 so far



Mike

We're here to help -- just ask

For the best trading education, watch our webinars
Searching for trading reviews? Review this list

Follow us on Twitter, YouTube, and Facebook

Support our community as an Elite Member:
https://futures.io/elite/

Visit other sites? Please spread the word about your experience with our community!
Follow me on Twitter Visit my futures io Trade Journal Reply With Quote
 
(login for full post details)
  #20 (permalink)
 MichaelWesten 
Petah-Tikva, Israel
 
Experience: Intermediate
Platform: MultiCharts
Broker: Interactive Brokers
Trading: Stocks
 
Posts: 20 since May 2011
Thanks: 0 given, 16 received

Hi,

First, thanks big mike for your support.

Second, I wanted to update about changes made in my positions after I made the last post, which was 2-3 hours before the close.

Positions closed

AA - My stoploss was hit at 9.88 for a net loss of $126.

BAC - My stoploss was hit at 5.38 for a net loss of $258.54. It seems, after all, that by moving the stoploss backward may have saved me some $$ (opening price of BAC in the session was ~5.44), but I should have closed the position once the price was below 5.29 (it was 5.20 I think at the low). This is another lesson.

Third, I would like to post a summary for my November trades.

Summary for November 2011

I made 18 trades, 17 of them are already closed.
3 of the trades were profitable.
I lost $793.26, which is %3.45 of my total equity.

Total Summary

My average risk per trade is $132.13.
My winning percentage is %16.67

My expectancy, in R terms, is -0.33. This is calculated in the following way (according to the book of Van Tharp):
1. For each trade, I write how much I risked and the result of the trade in $$ terms.
2. Then, I calculate the R-multiple of the trade: R == (Net P/L) / (Risk). R-Multiple is negative if the trade was a loser. The idea is that each R-multiple should not be less than -1. If it is, it means you lost more than you planned to risk on the trade and that is not good.
3. I sum all the R-multiples of all the trades and divide the number by the number of trades. This is the total expectancy. The higher the better. Negative expectancy means your system is losing money. Of course, you need to do at least 100-200 trades before you can jump to conclusions.

My maximum draw-down, in R-multiple terms, is 12.11. In $$ terms it is $1608.13. In % terms it is %6.99 and in length terms, it is 5 consecutive losing trades.

My average profit is $79.89
My average loss is $123.96
Win/Loss ratio is 0.64 (less than 1 means losing)
My Calmar ratio is -0.49

That's it for now. I hope December will be a better month.

Visit my futures io Trade Journal Started this thread Reply With Quote
 
(login for full post details)
  #21 (permalink)
 MichaelWesten 
Petah-Tikva, Israel
 
Experience: Intermediate
Platform: MultiCharts
Broker: Interactive Brokers
Trading: Stocks
 
Posts: 20 since May 2011
Thanks: 0 given, 16 received

This is the first post of December.
I would like to update that the new amount for 0.8% risk is $178 instead of $184 and for 0.5% risk is $111 instead of $115.

I have a problem attaching files today because for some reason I don't see the bar of yesterday (30/11).

New Orders

YHOO - Identified descending triangle on the daily chart, pattern length is about 2 months.

Actually, YHOO already broke to the upside (16.25) but since then it retracted. Because I want to put the stoploss below the last of the previous day, which is at 15.63, I calculated that I can't buy the stock above 16.03.

Therefore, buy limit order is set to 16.03, stoploss at 15.63, target at 18.03. I set the order for 270 units.

I will watch the stock today and if, near the end of the session, I will see it is not close to the day's low, I will adjust my buy order according to the stoploss being moved from 15.63 to the day's low (which is currently at 16.09).

BA - Identified up channel on the daily chart, pattern length is about 4 months.

Same with YHOO, BA already broke to the upside (69.75). According to my risk management, I could still enter the move.

Therefore, buy order is set to 70.45, stoploss at 68.49, target at 80.65. I set the order for 58 units.

BAC - Identified descending triangle on the daily chart, pattern length is about 3 months.

Breakout to the downside was set to 5.08, stoploss at 5.47, target at 3.3. I set the order for 443 units.

AA - Identified double top on the weekly chart, pattern length is about 2.5 years. see attached file.

Breakout to the downside was set to 9.78, stoploss at 10.63, target at 5.2. I set the order for 181 units.

Changes in existing orders

I updated the quantities of all the existing orders to reflect the new risk management values. Also, I adjusted the stoploss for some of the orders based on today's session so far.

New Positions

VIP - Buy order was executed at price of 12.01 for 427 units. Stoploss at 11.59 (risking 0.82%), target at 15

BA - Buy order was executed at price of 70.45 for 58 units. Stoploss at 68.49 (risking 0.51%), target at 80.65

AA - Sell order was executed at price of 9.78 for 181 units. Stoploss at 10.63 (risking 0.7%), target at 5.2

Attached Thumbnails
Click image for larger version

Name:	aa.png
Views:	87
Size:	83.6 KB
ID:	56117  
Visit my futures io Trade Journal Started this thread Reply With Quote
 
(login for full post details)
  #22 (permalink)
 MichaelWesten 
Petah-Tikva, Israel
 
Experience: Intermediate
Platform: MultiCharts
Broker: Interactive Brokers
Trading: Stocks
 
Posts: 20 since May 2011
Thanks: 0 given, 16 received

Hi,

Due to the amount of time it takes me to update this journal and because I don't see a lot of interest from the members here, I am stopping to update the journal.

Have a nice weekend.

Visit my futures io Trade Journal Started this thread Reply With Quote
 
(login for full post details)
  #23 (permalink)
mRoss21
Dana Point
 
 
Posts: 35 since Nov 2009
Thanks: 11 given, 17 received

Hi,

I've enjoyed reading your journal. I also trade stocks with IB, although I trade intra-day. I could see by the trade log you posted that you do trade live, as you stated.

You've given a lot of thought to risk management, which is very important. BUT I question your entries. Trading breakouts of simple chart patterns is a tough way to trade.

Trend lines are a nice visual, but in my opinion (and this is just my opinion) you should not trade the break of a trend line. Too many false breaks. If you insist on trading breakouts, you should think of support/resistance as a horizontal line and only take those breaks. Even if its only a minor swing point used to draw your trend line.

Anyway... good luck with your trading.

~Mike

Reply With Quote
The following user says Thank You to mRoss21 for this post:
 
(login for full post details)
  #24 (permalink)
 sharp2be 
Canada
 
Experience: Advanced
Platform: NT, TS
Broker: Amp
Trading: ES
 
sharp2be's Avatar
 
Posts: 57 since Sep 2009
Thanks: 1 given, 69 received

Hi, my impression is that most people on this board trade futures, I think your thread is good but it depends on your objectives, I wouldn't worry about participation, use it to improve your trading.

Visit my futures io Trade Journal Reply With Quote
 
(login for full post details)
  #25 (permalink)
 phillip 
Atlanta, GA
 
Experience: Intermediate
Platform: NinjaTrader, FCharts, Bulkowskis Pattern Recognition, Stockwatch
Trading: SPY, Stocks, Options
 
phillip's Avatar
 
Posts: 2 since Dec 2011
Thanks: 13 given, 1 received

Hi MichaelWesten,

I'm new to Big Mike's Trading forum and I've been reading each of your posts, catching up to the present time. I have greatly enjoy reading your entries, seeing your reasoning, looking at the charts and seeing the outcome. Just wanted you to know that. I hope your trading is going great and that 2012 will be an even better year.

Phillip

Reply With Quote
 
(login for full post details)
  #26 (permalink)
 Eiji 
San Diego CA, USA
 
Experience: Beginner
Platform: TradeStation
Trading: YM
 
Posts: 22 since Jan 2012
Thanks: 12 given, 5 received

I would say keep it up. Patterns rock!

Visit my futures io Trade Journal Reply With Quote


futures io Trading Community Trading Journals > Trading stocks based on breakouts of chart patterns


Last Updated on February 24, 2012


Upcoming Webinars and Events
 

NinjaTrader Indicator Challenge!

Ongoing

NEW BlackBird Features + FOREX Support w/Jeremy Tang @ SharkIndicators

Elite only
 

Our 12-year anniversary w/ $$,$$$ prizes (check soon)

June
     



Copyright © 2021 by futures io, s.a., Av Ricardo J. Alfaro, Century Tower, Panama, Ph: +507 833-9432 (Panama and Intl), +1 888-312-3001 (USA and Canada), info@futures.io
All information is for educational use only and is not investment advice.
There is a substantial risk of loss in trading commodity futures, stocks, options and foreign exchange products. Past performance is not indicative of future results.
no new posts