Breakout Trading using Time and Sales

This is a discussion on Breakout Trading using Time and Sales within the Trading Journals forums, part of the Reception category; very nice...very nice indeed od aveh fg? keep up the good stuff...

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Old Sep 21, 2009, 8:30pm   #9
 
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very nice...very nice indeed
od aveh fg?

keep up the good stuff
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Old Oct 2, 2009, 6:53pm   #10
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where'd he go?!?
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Old Oct 3, 2009, 5:56pm   #11
 
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amit1986 started this thread Hi,

Sorry for the delay - just been a little busy. Anyhow, here's another trade I took on Friday October 2, 2009.

Usually, I would have avoided this set up because it already had a nice move up without any consolidation for the first half-hour of the market. However, if you glance at the 3rd 5-minute candle, you'd notice it was a doji. That doji occurred at the $26 whole number, which was expected since whole numbers act as automatic support/resistance. But the stock didn't stall for long, as the next candle was strongly bullish.

At the 10am candle, there were a couple of off-chart indicators that confirmed my entry into this long-trade. First, at the time of entry, the ES chart (E-mini S&P 500 futures) had made new highs (I have attached a picture of this chart as well). This helped push my BBT trade higher. Second, Time and Sales displayed some momentum. Although Time and Sales was not perfect (the speed of the trades was not very fast), there was a lot of buying pressure and price was flying through the ask prices. It did break out a few cents at first, however I did not enter. But when Time and Sales started to pick up pace, I entered on clear momentum.

I took half my position of at the next candle at $26.68. The stock was having trouble around this area. If you look at the ES chart, you'll notice that the 10:05 candle was bearish and that's what could have been holding BBT back. Finally, as the ES futures broke out to new highs, my BBT trade also made new highs. My target for the stock was the 27.00 dollar whole number. It penetrated right through the whole number and continued going up, but the next candle started displayed strong selling pressure on the Time and Sales (you can also see this on the volume bars) and I was quick to close out my position at $26.96.

If trading 1000 shares, this would have produced a profit of $351.35; if trading 500 shares, this would have produced $175.675.
Attached Thumbnails
bbt.jpg   es-chart.jpg  
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Old Oct 3, 2009, 7:44pm   #12
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good stuff. I looked at T&S of a few stocks the other day and i have to say it is a LOT easier to read than on the ES. At the moment i have a few soild price action setups and methodologies, i pay attention to higher highs/lows and consolidation patterns and stuff like that.
Just a thought though i was thinking that if a stock is in a trend day you could enter a pullback with price action, or you could look at time and sales and look for weakness in strength etc (in a downtrend).

Strange how much easier stocks are to read the tape on
When did you start tape reading?
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Old Oct 3, 2009, 10:23pm   #13
 
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amit1986 started this thread Hi,

In my opinion, reading time and sales on pullbacks can be very tricky. It's best to trade pullbacks based on patterns (for example, ascending/descending triangles) and watch time and sales to see if others are trading those patterns. However, when trading pattern charts, I rarely make Time and Sales as my sole reason to enter. This is best left for the afternoon session of the market though. I started tape reading about 2 years ago.

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Originally Posted by TAjammy View Post
good stuff. I looked at T&S of a few stocks the other day and i have to say it is a LOT easier to read than on the ES. At the moment i have a few soild price action setups and methodologies, i pay attention to higher highs/lows and consolidation patterns and stuff like that.
Just a thought though i was thinking that if a stock is in a trend day you could enter a pullback with price action, or you could look at time and sales and look for weakness in strength etc (in a downtrend).

Strange how much easier stocks are to read the tape on
When did you start tape reading?
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Old Oct 3, 2009, 10:29pm   #14
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i heard on elite trader some guy saying that nasdaq and futures tape reading deosn't exist and soon NYSE once it becomes electronic lulz, he's obviously wrong...sorta because i think his style is to follow specialist and MM activity, well how else could the likes of you and folks like mr charts read tape !
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Old Oct 4, 2009, 2:44am   #15
 
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amit1986 started this thread Interesting point. I'm not sure how people can so quickly dismiss tape reading as a valid trading technique. To be completely honest with you, I think tape reading is probably the most fundamental way of trading there is. Price action of any product is driven by supply and demand, and that is what tape reading is all about - identifying areas of supply and demand. Of course it's really not as simple as seeing a lot of buying/selling pressure and trading off of that, but over time, you tend to figure out what to look for when reading the tape.

Plus, I wouldn't put Mr Charts and myself side-by-side. Mr Charts is a seasoned professional at this game, while I still consider myself in the "learning" stage.



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Originally Posted by TAjammy View Post
i heard on elite trader some guy saying that nasdaq and futures tape reading deosn't exist and soon NYSE once it becomes electronic lulz, he's obviously wrong...sorta because i think his style is to follow specialist and MM activity, well how else could the likes of you and folks like mr charts read tape !
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Old Oct 4, 2009, 2:50am   #16
 
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amit1986 started this thread Check out this video:

This is just one of the traders in the book Millionaire Traders. The guy interviewed in the video, Steven Ickow, trades off the level 2 screen. It's clear tape reading works now as much as it did before.
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