Trading Review for 2/2/2000

Trading was a little narrow in many sectors today pending the Fed meeting results, range bounding many issues and making good entries difficult.  Nevertheless, there were many profitable plays in Trade Prospector's top stocks.

Successful trading is about knowing where to look for opportunities, knowing when to seize the opportunity (or not), and managing their risk to maximize their profits.  To that end, let's take a quick look at Wednesday's trading action relative to the top Trade Prospector signals:

Volatility Compressions

ETEK offered long entry at the 187.3 upper boundary three times for a total of 12 points

AFFX triggered a long at the 236.3 upper boundary for 14 points

NOK remained range bound between the 189 and 179 boundaries and offered no good entries

Trading Range Patterns

GLW was also range bound between the 151.4 and 144.7 boundaries and was a no trade

HNCS gave a brief short trade at the 87.7 lower boundary for about 1 point

AFFX triggered a long at the 236.3 upper boundary for 14 points

 

Mutliday Patterns

The top three Multiday Pattern stocks also appeared in the Trading Range Pattern indicator groups.

GLW was also range bound between the 151.4 and 144.7 boundaries and was a no trade

HNCS gave a brief short trade at the 87.7 lower boundary for about 1 point

AFFX triggered a long at the 236.3 upper boundary for 14 points

 

Breakthrough Momentum

NSOL was range bound between the 261.8 and 235.5 boundaries

ITWO offered a long entry at the 218.3 upper boundary for 10 points

BVSN also gave a long entry at the 137.7 upper boundary for 5 points

Momentum Intersections

GDT briefly triggered a long at the 57.6 upper boundary which was stopped out for breakeven or fractional gains

CPTH triggered longs at the 69.9 upper boundary for 1-2 points profit

GILD also triggered long trades at the 46.8 upper boundary for 1-2 points

Near Trading Channel

MERQ offered no channel breakouts however aggressive traders keying on the reversal at the channel boundary were rewarded with 10 points profit

BOBJ gave a long entry at the 83.1 boundary for 1-2 points

AFCI triggered a short at the 36.8 lower boundary which was quickly stopped out for fractional losses

 

Near and Narrow Trading Channel

MERQ offered no channel breakouts however aggressive traders keying on the reversal at the channel boundary were rewarded with 10 points profit

BOBJ gave a long entry at the 83.1 boundary for 1-2 points

ENZN gave a good long entry at the 53.6 upper boundary for 4-5 points profit

 

Breakout Patterns

APCC triggered long trades at the 29.3 upper boundary for 1+ points

NWS.A gapped well out of range and remained there and was a no trade

HNZ gave an initial opening long entry trigger at the 36 boundary which was stopped out for breakeven to fractional losses and later in the day gave a short entry trigger at the 35.4 boundary for fractional profits

Envelope Patterns

ERICY triggered longs at the 80.4 upper boundary for 2 points

CAM triggered longs at the 53.1 upper boundary which were ultimately stopped out at breakeven

NN also triggered long at the 33.2 upper boundary and they too were ultimately stopped out at breakeven

 

Of note to daytraders using the trading index feature - the top three performers in each index category offered traders the following profit opportunities today:

Under $50 - AVA (1 points), ANCR (no trade), WHIT (2-3 points)

Under $100 - ADAP (8 points), SAPE (1 points), FFIV (4 points)

All - NSOL (2 points on breakout, 15-20 on reversals), VERT (15 points), CRA (2+ points on breakouts, 2 reversals for 20-25 points)

And of course three other of our favorite daytrading stocks: YHOO (6-7 points), VIGN (2 trades for 2-3 points each), JDSU (4+ points on breakouts, 12+ points on reversals)

Knowing where to expect, and capitalizing on, reversals is a key profit making tool in the daytrader's arsenal.

Whipsaws can happen in choppy markets and traders should always step away from the trade or give themselves more distance from the original entry boundary when a reversal occurs (such as adding one point to the reversal side of the trade entry boundary) to reduce the effect.  Losses are a fact of life, but they can be easily kept to a minimum while maximizing your profits with proper stop management.

Recognizing that a mere one point per day profit when trading 500 shares (or 5 option contracts) is $120,000 per year, you  begin to understand the potential for profit in applying Trade Prospector's information.

Copyright 2000, by Third Millennium Trading.  All rights reserved.  This information is proprietary and reserved for the personal use of Trade Prospector users and registrants.  No other use is permitted without the express authorization of Third Millennium Trading.

Disclaimer: Third Millennium Trading does not recommend the purchase or short sale of any stocks.  Trading should be based on your own understanding of market conditions, price patterns and risk.  The information presented here is designed to contribute to your understanding. Controlling risk through the use of protective stops is critical (more).