Trading Review for 3/16/2000
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 today's trading action relative to the top Trade Prospector signals:
Volatility - Volatility Compressions, Trading Range Patterns, and Multiday Patterns
ARBA Triggered trades short at its 258.8 lower breakpoint for up to about 5 points SDLI Rallied through its 188.4 upper breakpoint triggering long trades for up to 12 points GSPN Triggered shorts at its 96.3 lower breakpoint for up to 10 points - it then reversed and rallied to almost it's upper breakpoint MEDX Gave a short entry at its 91.4 lower breakpoint for up to 12 points SFE Opened and quicky charged through its 258.3 upper breakpoint but then stopped traders out for up to 5 points when its initial rally failed and it sold off back to test its lower breakpoint - when it tested the lower breakpoint a second time and then rallied back through its upper breakpoint, breakout traders again would have gone long for up to 20 more points INPH Triggered fractional trades when it sold through its 37.9 lower breakpoint NVDA Signaled a short trade when it sold through its 100 lower breakpoint for up to 5 points - it congested below the lower breakpoint for most of the day and gave several additional shorting opportunities when it poked its head above 100 and then fell back through it - the last opportunity was worth 5-7 points SNE Fell through its 250.5 lower trading channel and 249.9 lower breakpoint (due to their proximity, the 249.9 boundary would have been used), triggering traders short for up to 4 points
Momentum - Breakthrough Momentum and Momentum Intersections
INCY Gapped open higher and rallied, but pulled back to below its 128.4 momentum reversal level and ultimately triggered long trades for up to 8 points CHKP Sold off through its 199.2 downward momentum continuation boundary for up to 9 points NTAP Gapped higher but then continued its downward momentum, but reversed short of its 160.1 continuation boundary and rallied through its 193.7 reversal boundary but quickly stopped traders out at breakeven or fractional losses MEDI Opened beyond its 168.4 continuation boundary but then sold off, when it reversed and resumed its upward momentum back through the contination boundary it delivered up to 13 points profit BBH Gapped higher and then sold off but finally reversed back through its 183.3 boundary twice (first for a fractional loss on a stop out and then on an up to 5 point gain). AMGN Gapped beyond its 59.6 continuation boundary and remained there - no trade VITR Sold off quickly through its 148.4 continuation boundary for up to 13 points ATON Lost its momentum and sold through its 110 reversal/failure boundary for up to 4 points
Trading Channel - Channel Breach, Near Trading Channel, and Near/Narrow Channel
RBAK Gapped lower back inside its trading channel and when it sold through its 337.3 lower channel boundary it triggered short trades worth up to 57 points CHKP Triggered shorts at its 199.2 lower breakpoint for up to 9 points VIGN Triggered short when it sold through its 234.6 lower breakpoint for up to 5 points NSOL Rallied in the afternoon back though its 220.9 upper channel boundary for up to 9 points PHCM Sold through its 154.5 lower channel boundary for up to 6 points MSTR Opened near its 269.2 upper channel boundary and sold off through its 258.1 lower breakpoint and its 245.8 lower channel boundary the short triggered at 258 was worth over 38 points ADAP Triggered shorts at its 153.2 lower channel boundary for up to 8 points FDRY Gave short trade entries at its 167 lower channel boundary for up to 12 points AGIL Sold through its 138.2 lower breakpoint for up to 5 points MIPS Gapped above its trading channel and then sold back through it triggered 2 point shorts at its 74.3 lower breakpoint
Envelope - Breakout Patterns and Envelope Patterns
CMLS Triggered a downward continuation through its 14 continuation boundary for up to 2 points CSGS Traded within its boundaries - no trade - look for possible upward continuation tomorrow ADLAC Traded within its boundaries - no trade - look for possible downward continuation tomorrow XRX Opened at its upward momentum boundary but failed to get through 26 1/2 and ultimiately sold off - stopped out for fractioanl trades WLA Triggered a buy at its 94.5 entry boundary for up to 2 1/2 points PNU Triggered a buy at its 56.5 entry boundary for up to 2 points DCN Triggered buys at its 23.9 entry boundary for up to 1 1/2 points DG Triggered buys at its 23 entry boundary for up to 1 point TER Triggered shorts at its 74.2 entry boundary for up to 2 points
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).