Breakout Trading using Time and Sales

[Mr. Charts]

Amit's self-control is excellent.
You cannot expect or hope or wish to control the market, only your own trading, and that is key to success.
You take what's there, not what you want or expect to be there.
Richard

 

[amit1986]

Amit's self-control is excellent.
You cannot expect or hope or wish to control the market, only your own trading, and that is key to success.
You take what's there, not what you want or expect to be there.
Richard

Thanks for the kind words, Richard!

Mentally, it's quite tough to adjust to that train of thought where you simply take what the market gives. But it's been working very well for me lately.

On a related note, I also find that thinking about risk first also is a key component in trading success. If you can do that, then you'll be able to keep your losers small.

 

[amit1986]

I took two more trades.

XLNX had formed a triple top whereby all three pivot highs were lower. So I shorted it and put a stop above the previous pivot high. It didn't work out and I lost 11 cents per share.

After, I took a look at TIBX and it had been plunging since mid-day (don't ask me why I missed shorting it earlier). I took a look at the monthly chart which I have up on another screen and saw that it was approaching this months low at 19.88. Immediately, I knew there would be plenty of stop sell orders under there and I could get out as the price plummets through them. I shorted at 20.12 and closed my short at 19.89 for a juicy 23 cents per share profit.

In summary,

XLNX: -11 cents per share
TIBX: +23 cents per share.

 

[amit1986]

First trade of the day, CVS.

Nice uptrend with consolidation indicating the lack of sellers. Saw strong bid pressure on level 2 early before breakout and took a long.

Entry: 35.30
Exit: 35.44
Profit: +14 cents per share
Length of trade: 3 minutes

 

[amit1986]

XLNX had formed a triple top which I have seen a few times before. I also know from experience, that it was likely to start plunging down.

Three consecutive lower highs. I shorted when I saw selling pressure on level 2 and placed a worse-case stop above the third pivot high.

Buyers rushed in and I lost 11 cents per share.

Short Entry: 28.19
Exit: 28.30
Profit: -11 cents per share
Length of trade: 6 minutes

 

[amit1986]

TIBX short. Straightforward trade on falling candles. Shorted on strong level 2 selling pressure.

The months low was nearby and I knew there would be sell stops around as everyone who bought this stock this month would be in a loss. The force by which these stops would get hit would drop the price dramatically and it did.

Entry on crosshairs; exit as detailed on chart. See broker screenshot for precise entry/exit details.

Short: 20.12
Covered: 19.89
Profit: +23 cents per share
Length of trade: 7 minutes

 

[amit1986]

Been travelling on holidays for the last 4 days. Back now and don't expect much action today. Nonetheless, I will be keeping an eye on the following stocks: RNOW, BJ, IM, SLW, XOMA, NBL and IPXL.

Remember - risk first, reward second.

 

[amit1986]

RNOW had wonderful momentum on level 2, but didn't take it as the ATR was far too high.

 

[amit1986]

Today's been a bit of slog - the morning especially was quite slow. In the afternoon, I spotted NVDA off a scanner. Here's how I reasoned through the trade and the result:

1) The stock had been trending up nicely all day after a gap-up.

2) I took a look at the monthly chart and saw an important top from early 2010. Immediately, I knew that there would be plenty of buy orders above the top. Why? NVDA is a popular stock! A lot of people who were short from the top may have put a stop above "resistance" to protect profits and/or limit losses. Furthermore, in this bull market, there's a good amount of people who are looking to go long - NVDA presented an excellent candidate having broken resistance.



Once all these buy orders were to be hit, there was a high probability of a spike in price, which is exactly what happened. Here's the 1-minute chart that I was trading off (entry on the crosshairs; exit as detailed on chart):



I ended up taking a reversal trade as well after my breakout trade for a quick scalp as I knew that all those traders who went long on the breakout would cover their positions.

Net Profit: +25 cents per share

 

[amit1986]

Haven't posted here for a while. Today is the beginning of earnings season and as a result, got a lot to keep an eye on:

AKS, AXP, BHI, BTU, COH, EK, GLW, JNJ, RF, STM, SWKS, TEVA, TLAB, TRV, VMW, and ASML.

There's a good chance some of these might setup with trends. In that case, they may provide trading opportunities.

 

[amit1986]

Managed to scalp 16 cents per share profit out of AXP break down. Check out the daily chart...its gapping down today meaning a lot of people were looking to sell...as soon as I saw a lot of selling pressure on level 2, I shorted.

Got out a little too early though.

 

[amit1986]

Just got a pleasant 44 cents per share profit out of NTAP breakdown. The falling NQ's definitely helped out on that trade. If anyone is interested, I can post a chart.

 

[dxx]

Yes please post a chart. Thank you

 

[amit1986]

Yes please post a chart. Thank you

Entry on the crosshairs; exit as detailed on chart. See broker screenshot for precise entry/exit information.

Like I said in my previous post, the rapidly falling NQs provided the initial push down, after which I suspect all the sellers came in. I exited due to buying pressure building on level 2.

Sometimes level 2 can be very easy to read on stocks like this, other times I find level 2 actually does me more harm than good. In the case of the latter, I use Mr Charts' opposite end of the previous candle rule as a trailing stop.

Trade 1: +44 cents per share
Trade 2: +3 cent (quick scalp)

 

[dxx]

Thank you amit. Good stuff.

 

[amit1986]

Entry on the crosshairs; exit as detailed on chart. See broker screenshot for precise entry/exit information.

Like I said in my previous post, the rapidly falling NQs provided the initial push down, after which I suspect all the sellers came in. I exited due to buying pressure building on level 2.

Sometimes level 2 can be very easy to read on stocks like this, other times I find level 2 actually does me more harm than good. In the case of the latter, I use Mr Charts' opposite end of the previous candle rule as a trailing stop.

Trade 1: +44 cents per share
Trade 2: +3 cent (quick scalp)

The "Trade 2" was actually a small loss of 3 cents per share.

 

[amit1986]

Going to be watching the following stocks today for any interesting setups:

AKAM, ALL, ALU, AMKR, ATVI, CS, CSCO, ECA, EZCH, NUAN, SCSS, TKLC, TQNT, WFMI, SWKS.

Be careful with reading CSCO - I find it's sometimes best to simply trade the chart patterns with high volume stocks.

 

[amit1986]

Scalped 4 cents per share out of TKLC breakdown. Spread opened up quickly and I got out...may have been a premature exit.

 

[amit1986]

There are some nice setups right now on the other stocks I have mentioned, but their ATRs are too high so I won't be trading them. Going to keep scanning.

 

[amit1986]

Another +6 cents per share out of TKLC breakdown.

Finding TKLC really difficult to turn into a swing trade...too much buying on level 2, yet price keeps falling.