Breakout Trading using Time and Sales

yeh found out that guy reads the quote of level 1 and doesn't even read T&S, he looks for a big buyer and follows him, seems very complex tbh and he says when NYSE goes fully electronic it will be impossible to do it like that again. but you can always rely on T&S

i can't help but bullsh*t on forums, i got caught out again, i can't look at T&s on stocks with my demo , lol how embarassing

Seems to be the formation of a Head and Shoulders pattern on DJIA!

Interesting to see how it plays out.

I love how you explain your topics.
So informative and I get it!
Read it last night and today as well..but yes I got it

Yes...also don't disappear again!

No worries! Just focus on your other methodologies and setups until you get access to Time and Sales.

I hope it helps trina!

So how are you handling your stops? I am familiar with momentum trading and know that in an ideal trade the price will continue to rise after your entry. Do you stay in if price starts to move against you? If so, are you basing these stops on ATR, last candle, fixed price? I am interested because I also trade based on momentum but am still working on the entry side of the equation. Thanks

Hi ezreddy,

There's really no simple answer to your question regarding stop losses. Most of the time, if there's no viable areas of support/resistance, I place an emergency mental stop 10 cents before my entry (for long positions) or 10 cents after my entry (for short positions). However, these are what they are - emergency stops. Much like what Mr Charts says on his thread, why wait for your emergency stop to get hit? As you know, in momentum trades, you'll know fairly quickly if your trade has worked out. Therefore, if the price action reverses/goes against me, I close out of most of my positions. However, in some cases, price action may still go against me but Time and Sales is still strongly in my favor. In those cases, I stay in the trade with the 10 cent mental stop.

Once the stock goes approximately 10 cents in my favor, then I move my mental stop to 1 cent plus the entry (for long positions) or 1 cent minus the entry (for short positions) so if the trade turns around and goes against me, then I at least break even. After the EMA(10) goes past my stop, then I trail my stop using that EMA(10).

Obviously, if there are other areas of support/resistance, then I use those as stops. Consider the following example: A stock breaks at $36.50 and I get an entry at $36.55. The stock continues to go up several cents and I now place my mental stop at $36.56. If there are two or more candles that set the same low of $36.67, then I would move my stop to $36.66 because support at $36.67 is broken.

So basically, it's about identifying areas of support/resistance.

Hope this helps,

Amit