Combining Candlesticks, Indicators, and Pivots

[Soultrader]

Try to test it out using whatever stocks you plan to trade. I have found it to useful in my trading because I trade a market that respects pivot points. I have no idea how they are when trading penny stocks. Why are you trading them anyways? You don't find mid and large cap sized stocks attractive?

The pivots and midpoints are just a point of reference of support and resistance points. The midpoints I use only when there is great distance between two pivots. I use the midpoints mainly for exiting and not entering.

The pp is the most important pivot. The formula says it all: (high+low+close)/3. I like to fade this pivot usually. Some traders will only look for long setups when price is trading above the PP and short setups when price is below the PP.

[jacobnbr1]

I don't always trade the penny dogs but at this moment there are a couple of trades that i am working on that are penny dogs...

Actually the stock in mention is- was a midcap stock that has been beaten down to the dollar range and against better judgement i took a small position of it and was just looking at it with this method to see if something of value can be used.
For the most part when i buy a stock i pretty much ignore all the noise and let the stock do as it needs to do and recheck it every 15 days or so to see if anything has changed.

Thanks for explaining the pp as my question was answered.

I have tried trading a break out of rissistance levels and have found that when i do this they fade back and few actually take off, maybe this is the method most traders are doing know...


chris

[Soultrader]

Pattern failures are common and catch a lot of new traders off guard. That is why I d o not play breakouts. Instead I will play pullbacks out of breakouts. I do not know exactly how breakouts occur in penny stocks. Breakout failures may be more common in penny stocks (no idea if this is the case or not).

I have met a trader years ago who traded penny stocks with a system he designed. I honestly had no clue what he was doing most of the time but he was making an average $10k a day.

You said you are trading a former midcap stock that is trading at pennies now. There is probably a good reason why it got hammered all the way down. In personally would not touch any of these stocks. The odds of it going back to its past price is low. The only setup I will play when stocks get hammered is to look for a dead cat bounce.

[jacobnbr1]

	Quote:	Soultrader
	Pattern failures are common and catch a lot of new traders off guard. That is why I d o not play breakouts. Instead I will play pullbacks out of breakouts. I do not know exactly how breakouts occur in penny stocks. Breakout failures may be more common in penny stocks (no idea if this is the case or not). I have met a trader years ago who traded penny stocks with a system he designed. I honestly had no clue what he was doing most of the time but he was making an average $10k a day. You said you are trading a former midcap stock that is trading at pennies now. There is probably a good reason why it got hammered all the way down. In personally would not touch any of these stocks. The odds of it going back to its past price is low. The only setup I will play when stocks get hammered is to look for a dead cat bounce.

You have a very valid point to this stock that i have considered.

I have found on some small penny stocks that when massive insider buying is preasent they tend to break out and double the percentage, sometimes multiply.. most midcaps a 10% increase is great but i can do 50-100 on most trades but i have a 40% win rate. I need to get to at least a 60% win rate to be doiing nicely...
Which led me to this wonderful site to try new things and explore the options of technical trading. By the way, I am currently using a simulator for all tests therefore not using cash for testing purposes. The simulator will not accept stocks under 2.00, using midcaps in the sim will be for sure. I currenetly rank 4th with like 3.8% this month using value trades.

chris

[Soultrader]

Jacob,

Are you looking to trade long term? It seems to me that from your way of trading, you are looking more on the longer timeframe. Also I do not quite understand your current method of trading. Are you trading strictly of fundamentals and not technicals?

[jacobnbr1]

Currently i am long term fudamental trader based on insider buying preasure, I use some technical indicators as in - obv,dmi,and rsi and volume.

I am in search of a better method and quicker turn time. I really do not want $$ tied up for 6-8 months when there are big moves going on each day producing some of the gains i wait 6 months to get.

Aside from trading the usual way i do I would like to have a cash generating system that would consist of a portion of my port. for trades between 1-14 days that can generate moderate gains repeatedly.

Does that make scense??

So as i had stated in another post I tried breakouts, options, stock splits and have not found a sucsessful way yet. I try most of my methods on a simulator 1st but seems most trades go your way when using the sim???

chris

[Soultrader]

Chris,

Yes, it makes perfect sense. You are looking for a swing trading method. I am actually starting to pick up swing trading on my own. Try picking up Alan Farley's, Master Swing Trader. I have taken some of his home study courses in the past and found it to be of great help. I learned a great deal of volume and price analysis from him.

The problem with simulation or paper trading is that it takes the pyschological and emotional out of trading. In my opinion, our competition is not of other traders. The true competition is yourself. I am the biggest enemy to myself. When you have money on the line, your brain will play many different tricks. It is the abilitiy to control this that will help you succeed as a trader. Paper trading is good to test out a strategy. But you should get in the habit of trading live with real money. If you do not feel like you are ready, trade small. This way you can practice and not lose money that can hurt you financially.

[jacobnbr1]

Some day i will sell all these books i have bought over the years and get a hefty return...

I got three sets of cd,vhs programs of the "WADE COOK METHODs" , and pretty close to 85 books.

Anywho the book in mention is on the way to me, i got the audio version for 16.95 on e-bay. hope this is what you wanted me to get?

So what can i do til then if i wan't to be a swing trader? Is there an easy chart pattern i can be looking at?

I went to a few websites today and some had video feeds of how to swing trade and looks as if you are setting these things up as breakouts.

I had a few good insider trades this week as the markets retraced. most of the insider stuff has very little volume so a retracement does very little to the positions... Lucky me.

thanks again.
chris

[Soultrader]

Hey Jacobnbar1,

You got the audio version? Which means you will be unable to view the charts and setups Alan Farley has in the book. I also have the audio version and the book version. I did this so I can listen to some concepts in his book while working out. Either way, you will still find the audio version useful.

I posted a chart... this is the reason why I do not play breakouts.

[jacobnbr1]

I did'nt think about the chart setup photo's in the book...
I will buy the book also.


What other methods are there other than breakouts?