Trading Review for 3/23/2000
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
TWX Remained within its boundaries - look for a breakout soon SPCT Triggered long trades at its 27.5 upper breakpoint for up to 1 point ORCT Triggered long trades at its 70 upper breakpoint for up to 2 points and then triggered short trades when it fell back through 70 (this was also the lower channel boundary) for up to 2 1/2 points ABGX Triggered brief shorts at its 196.8 lower breakpoint for up to 5 points - if you played the reversal back through the lower breakpoint you made an extra 15 points PDLI Triggered shorts at the 101.1 lower breakpoint for up to 5 points INKT Found support 0.1 short of hitting its 211.4 lower breakpoint - only reversal traders had a trade today - for up to 6 points RBAK The 326.4 price level held strong support/resistance (it was the convergence of both the lower breakpoint and the lower trading channel) - short trades from this boundary ultimately gained up to 17 points JNPR Triggered short trades at the 261.1 lower breakpoint for up to 5 points - reversal traders who observed the early morning rally failure just below the 275.1 upper breakpoint and went short gained up to 20 points
Momentum - Breakthrough Momentum and Momentum Intersections
RMBS Gapped open and triggered longs at the 359.6 continuation boundary for up to 4 points before momentum died CRA Triggered longs at its 132.1 continuation boundary for up to 5 points MEDX Triggered continuing longs at its 75.7 boundary for up to 12 points VITR Remained within its boundaries - no trade GLGC Triggered longs at its 65.3 continuation boundary for up to 5 points KANA Gave long entries at its 104.1 continuation boundary for up to 5 points TIBX Triggered long trades at its 120.2 continuation boundary for up to 3 points
Trading Channel - Channel Breach, Near Trading Channel, and Near/Narrow Channel
EMLX Triggered shorts at its 205.8 lower breakpoint for up to 5 points EBAY Stuck within its boundaries - look for a possible big move soon BRCD Triggered long trades at the 175.6 upper breakpoint for up to 3 points CMRC Found strong resistance near the 217.1 upper breakpoint, but also found strong support above the 201.1 lower breakpoint - however, traders shorting on the breach of the 208.3 lower channel boundary picked up 5 points BRCM Triggered longs at the 248.3 upper breakpoint for up to 4 points
Envelope - Breakout Patterns and Envelope Patterns
NITE Remained within its boundaries - watch for a possible continuation of the pattern above 56 IMRS Continued its upward pattern through its 17.5 continuation boundary triggering longs for up to 1 1/2 points NOI No trades OEI No trades NETO Triggered trades in both directions - first a short trade in the direction of its breakout below the 23.9 entry boundary for a fractional gain and then a long at the 26 false breakout boundary for up to 1 1/2 points JNJ The 82.4 breakout boundary held as resistance and a fractional short was triggered at the 80.8 false breakout boundary - watch this for a possible continued selloff as a result of the false breakout
Of interest to daytraders, from the Trading Index -
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).