The 4 Characteristics of Strong Breakouts

Volume & breakout

EXPO

ABI

More than average volume is must for a successful breakout. Breakout means Stock is breaking significant level of support or resistance. In an uptrend if the volume is enough to lift the price above the support level but not big enough to hold at the support than there is a possibility of disaster .So when we enter a breakout trade volume is the most important thing to look for .

Photos from the beach

The same mistake again

Though the market was bullish but FRX was showing some weakness. I entered in the 10 o'clock break-out (break-out with huge volume) but I exited too early and I missed the whole run.

Trying to be a photographer

Light & shadow 2

Short from ORH

The initial stop loss

Why the initial stop loss should be the low of the opposite candle from your entry candle(for short it is opposite candle's high).
Most of the time the price goes back to test the immediate lowest point it made (which act as support), in BHP we see how it works. If we enter a long position after the 4th candle then our initial stop loss will be below 4th candle.

Trader Made Billions on Subprime

The wall street journal

One trade CVH long

Summery +2.6 R

Experiments

charts from the experiment

I am doing some experiments with my new trading system. I will reveal my experiments results at the end of the month.

Light & shadow 1

Why traders wins & loses

According to Jacke Bernstein

Why traders wins

1. Develop specific procedures.
2. Have a defined operational methodology.
3. Understand how your trading system works.
4. Be sufficiently capitalized.
5. Don’t take quick profits.
6. Begin using a system after it draws down.
7. Be willing to accept consecutive losses.
8. Don’t think too much.
9. Don’t set specific price target.
10. Don’t believe the tight stop loss myth.
11. Play your own game-avoid the news.

Why traders loses

1. Lack of defined methodology.
2. Poor self control and discipline.
3. Information overload.
4. Riding losses.
5. Taking profit quickly.
6. Poor understanding of system basics.
7. Lack of consistency.
8. Too emotional and suggestible.
9. Too close the makes.
10. Can’t accept more than a few consecutive losses.

Jacke Bernstein is the author of several books such as Day trader 1, Day trader 2,Introduction to technical analysis.

Support & Resistance

When the price starts to go up it faces resistance from the previous high. 50 SMA &200 SMA act as big resistances as well.

A chart from last week

Trying to be a photographer

Didgeridoo

It could have been a batter day

My entry was right but stop loss was too tight for LEH’s volatility, I missed it.

Summery +160

Another boring day

what can you do? when days are like this, no clear direction .........
+70

One trade

Not much happened for me today,just one trade, didn't go in my direction.

Summery -70

Not a great day

I was up around $200 but gave half of it away.

Summery +87

How I calculate position size

I have tried a fixed size method, like 500 or 1000 shares per trade but it didn’t suit me. In fixed size system I knew my position size but I had to adjust my stop loss point with the size, so it made the stop loss point less logical. My new system allows me to put the stop loss in more logical point,(I mean above or below support or resistance). Support & resistance is the best weapon for day traders, I am certain that my stop loss will be more effective now.

Calculation:

For example I short a stock @ 39.75 that means that my stop loss will be above $40 for obvious reasons. As we know that $40 is a decade number so it can go back & test it. Now if I put my stop loss @ 39.85 this will add some lose to my account where price always test the round numbers. Assume I put the stop loss @ 40.10 & the amount I want to lose is $200, so the position size will be:
200/.35 = 571

Snowy March

The tree next to my window was totally white

My neighbour's house from my window.

It has been a mild winter over here where I live in Sweden (Malmo, southern part of Sweden) until yesterday. It hasn’t snowed at all this year & I thought the winter was over but I was wrong......

Position size

I cut down my position size by 2/3, probably I will make less money but I will loose less too. Now I feel more comfortable to enter a trade. Lets see what happens in the next few days

Summery +197

Solveing my problem

I always had problem exciting a trade, so I was trying to get better at exiting, I tried different method, nothing worked, this time I found CCI, probably every one knows it, I knew it too but never used it before. I am using it only for exiting a trade not for entry. I will try to explain in the chart, how I want to use it.