Here is this week’s Q & A educational post. Answers are in bold. Sorry for the delay, but I was REALLY tired yesterday.
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1) Trader Keith
a) Other than the MA’s, what are your other favorite indicators to use to find stocks that are BTFO? No indicators (I already answered this one).
b) After you enter a stock, how do you decide when to exit? Based on the candlestick? % drawdown? trailing stop? hard stop? MA? Mental stops bring in the whole aspect of emotions doesn’t it? Candlestick and/or MA’s.
c) How do you size your positions? Is your risk a certain $ or % amount of your overall portfolio equity, such as 1-5% to make sure you don’t blow up? Typically 10% per position. However, if there is a multitude of setups, I will do 5% per position and hold more of them.
d) How do you ensure you have an edge over others? remain disciplined and manage your risk? Pure discipline insures you have an edge over everyone that doesn’t have it.
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2) Jiri
a) What do you think about OCNF and PLLL? I own them both and I have to see what direction they take outside of their consolidation ranges.
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3) Dudette
a) Would love to know what you see for ILMN and OPTR. ILMN is imminent. OPTR…I’d wait for a breakout above $14.70 or a consolidation right below that level for entry.
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4) Moose
a) Any opinion on SCLD? Dangerous.
b) Is there a software that you can draw free hand trendlines on your own custom charts, and be alerted of touches via email. You already have it (your brain). Don’t be lazy.It only takes seconds to look at a chart to see if stocks touch their trendlines.
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5) Hawaii Five O
a) Since at this point, I’m not buying individual stocks,but the S&P, when you say, ” A breakout above 948 or a breakdown below 923 is technically significant to me,”Are you saying that above 948 is a continuation and below 923 is a breakdown? A breakout must clearly breakaway from consolidation without any question and it will mark a continuation in the uptrend. A breakdown must clearly breakaway from the same range to indicate reversal. Fakeouts do exist, so be aware of that.
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6) Looters
a) Sometimes, I see a stock which has been trending up nicely for weeks. Seems if I wait for a pullback before buying, it continues to run up on me. However, if I jump in, I end up buying at the top. How do you handle a situation like this? Wait for the pullback for entry. Many stocks will higher without you. In that case, move on and keep looking for setups. Don’t be a sucker.
b) I’ve read Edwards and McGee and they stress the need for the volume of a pattern to meet certain criteria along with price action. In reality, it seems to rarely play out this way. Do you give more weight to price action regardless of vol., or wait for vol. and price to both meet the criteria set by E-M. Volume plays a huge role when confirming price action. I already answered this question in the first Q & A.
(for example…an otherwise textbook H&S top where vol. increases for each rally rather than lessening on each sucessive rally). Massive volume (many times the average) mark blowoff tops and bottoms.
c) Are you avoiding stocks who are heavily involved with the government or attract a lot of gov. attention such as banks,oil co.’s, insurance,housing, auto’s etc. Personally,I hate to risk money on something that can be affected by a comment made by a bureaucrat,or a descision made for political reasons rather than being based on sound business principles. What are your thoughts on this? I will trade anything with a good setup. I have personal reservations gain auto’s and airlines (just because).
d) Any advice for someone who cannot sit at a computer all day and babysit their stocks? May want to develop a longer time frame and/or set stops on everything you have.
e) Your thoughts on SLT, HIG, BHP, HME? SLT is forming a nice flag. HIG is forming a nice symmetrical triangle. No opinion on BHP. HME appears like it will consolidate between the 50-day and 200-day MA’s for a few days.
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7) Mimi
a) Thoughts on CVM? Highly likely to consolidate between $0.55 and $0.70.
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8 ) GonzoTrader
a) VMED nice high and tight flag on the daily. I would dare to say text book? Yes.
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9) Kush
a) Have you ever considered finding a list of stocks that have ridiculously low PE ratios before doing your regular TA? They might be better for long-term trades. I don’t do fundamentals. P/E’s mean nothing to me.
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10) Deecie30
a) Thoughts on spng, synj? SPNG is nearing resistance at $0.12 and an exhaustion top is highly likely. SYNJ looks like a spiker with more upside potential, but it’s a $0.0016 stock. Are you trying to get rich quick? I personally don’t encourage people to play stocks priced THIS low.
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11) Berky
a) CA- why did you jump into PWAV late on Friday at 1.57?? I have 10m shares at 1.50 and wondering if you think it will go much higher. Something isn’t right with your question. First, when did you buy 10 million shares (as you claim) and second, if you bought that many shares, why are you asking me if it will go higher? Something isn’t right here…
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12) BeeRy
1 – How long, on average, do you keep your positions? Is there a time of day that you prefer exiting positions? I am a swing trader, so prefer to hold for several days. If a stock gains +40% or more, then I will highly consider exiting the same day. If a stock moves immedaitely against me, I will also exit on the same day. I prefer to sell closer to 4PM, since that’s when I can estimate the appearance of the candle o nthe daily chart.
2 – Out of all your picks, how often would you say you are correct. (I know this is a pretty high %age). 80%+ (on average).
3 – Do you have an entry criteria (such as an indicator or other) that you use to scalp a few extra pennies on your entry price? I don’t scalp.
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13) Lindsay
a) On your bio it looks like you started trading at 13– you told us you are teaching your niece how to trade– did someone teach you or how did you get interested? Not niece, cousin. I started investing at 13, trading at almost 18. I learned everything on my own.
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14) Ying
a) I’d like to ask your opinion about XRM, CTIC, FTK, OCNF, OVTI. I don’t know why you’re asking me about stocks I already own (except FTK). If you are a blind follower following my trades without knowing why, then stop.
b) Also would like to ask what will happen to these penny stocks if general market suddenly pullback to 925 or even lower. Each penny/dollar stock’s price action is individually determined. Most stocks follow the general market to some degree, but you have to try to find the ones that aren’t as affected by declines, but also head higher most of the time.
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15) Steve-o
a) Any thoughts on holding or playing into earnings? I generally go not play earnings unless the chart setup shows me that I have greater odds for success. Betting on a stockfor no good reason is ill advised.
b) Could I also get your take on URRE for the weekly timeframe? Looks good still.
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16) Finclyde
a) BWR.to and MAI.to. I see that MAI.to has the higher chance, by far, for a lower-rick entry for more upside.
b) Here’s a few random questions, what got you into stocks, how many followers do you have on twitter, what size of portfolio do you trade with, do you hold anything long term (dividend yielding stocks, gold, real estate, foreign currencies) or are you strictly dedicated to swing trades, you say that you read 100 books a year, which ones would you highly recommend (top ten maybe, you may have already listed these before), when’s your book coming out? Stocks became an interest just like everything else I enjoy. Twitter followers – why does it even matter? Portfolio size – larger than most people here. No long-term holdings in my personal accounts. I am a primary swing trader. What kinda of books are you looking for? My own book – I thought about it, maybe.
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17) Casino3
a) I’m still holding CTIC and bought more on the pullback. What’s your sell target?
Thanks. What’s YOUR sell target? You should already know when to sell before you buy. You are traveling without a map. My target is in the $2’s.
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18) Q
a) Do you think you could make a living just day trading and not holding positions overnight? Yes, people do it all the time.
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CHP for a watch list
Congrats on those that played MITI and ANPI. sick moves
CA,
GNVC also had a VERY nice move for those who held
Nice Q&A session CA, I know when I am saying it is much appreciated by all.
Nice continuation action today in AXL although today seems to be a downer for most besides some biotechs …. well all except my holdings 😉
How was Belmont CA?
I won lol. I bet on all the horses that were perceived to suck. I played as contrarian all day and won 5 out of 8 races, including the big 11th one.
CA- Sorry for the mis-print. I meant to say 10K shares. So what is your opinion??
Thanks in advance,
Berky
Right on CA! You are a winner! Definitely not a weiner 😛
Initial target on PWAV is $1.75 on the October breakaway gap fill
CA – could you explain your horse betting contrarian strategy? Where you simply just picking the ones with the highest odds ratio like a degenerate or did you have some other algorithm?
CA – Look at AMLN’s chart using weekly candles. Looks like a nice rising wedge that can give some serious gains. Thoughts?
MRGE lol
Cuervos – there was simple math involved. I’ll try to explain it in tonight’s post. remind me.
AMLN was a setup chart I posted on one of my daily posts.
OK, CA.
When I first started studying machine learning analysis, I read a paper by some computer scientists who used Information Theory and Artificial Neural Nets to outperform human “experts” in Dog Racing bets so the math portion intrigues me.
CA you planning to load up more XRM? if so, what’s your reloading target? 1.5s?
I missed the AMLN chart on your post CA.
Also, what are your thoughts on BLC?
Bought another 2.5% in CTIC
COMS and BIOS showing good potential for a breakout any minute.
TRID looks a little wide and loose after the breakout(?) on thursday and friday . i’m not sure if it’s showing a normal correction or just a sloppy, indecisive stock
BIOS and COMS – YES
TRID – sloppy and in consolidation.
My new pet lizard btw:
http://twitpic.com/6wqfq
I need a name for him. Any suggestions?
How about Geico? 😛
Looking to buy more GNVC in the .95 area.
I almost suggested DevilDog but then again this little guy probably has more sense and would take offense at being associated with that douche 😉
christen him Dhar’leth, Daemon Prince of the Black Legion, Champion of the Antecanis Massacre
How about Anole? 😉 I couldn’t resist. I used to keep them when I was a kid and have thought about getting a couple again.
Oh, great Q&A BTW, and you should consider a book. You describe trading concepts very clearly and reinforce the fundamentals well.
lol, hammy. Love it. Too bad we’re the only ones who would get the joke. 🙂
ok, how about a name that won’t scare people away. lol
PPHM ?
Buffett
XTXI is breaking out
Lizard = Doji
Got into BLC @ 1.91
Oh I like Doji! Much better than Harami or Bullish Engulfing 😛
I’ll put in a vote for Larry (Kudlow). If you get the lighting right you could probably confuse them for each other.
CA, If a stock that has a really good flag breaks down below the 15 and 20MA support, at what point do you decide to cut the stock? 10%, 12%, below MAs?
TIA.
Sorry forgot to add – looking at a 3 or 6mth chart, (Daily)
TIA.
CA: would you consider LJPC still a reasonable possibilty?
This is what happens when I try to do TA only. Volume is too thin on most of these (for me at least).
MOSY – 2+
DROOY – short to mid 7’s
TEO – watch for breakout above 11/11.5
SNHY – inv H&S
CTDC – to 4+ (VERY thin vol)
CALP – to 2+
MHGC – inv H&S – watch for breakout
OMI – watch for breakout above 37.5…poss to low/mid 40’s
HAE – short
XTEX next, all are breaking out in sequence
XTXI, great idea from a few days ago on this page. this stock is my only green one right now, and is out-weighing all the reds put together. Awesome.
DXO, all oil and gas plays
XTXI $$$$
Toronto Canuck, very nice one on BLC
BLC BTFO
APL has a decent little flag setup goin for it
Bill, think something funny going on with VICL?
LJPC..i own it. Above .64 it has alot of free room to run imo.
awesome new Mac updates via conference, info streamed live on this page:
http://www.macrumorslive.com/
all new updates on all laptops, new OS (snow leopard?) new prices
Thanks KC! Two wins today with MITI and BLC 🙂
CA, opinions on EXEL? looks like it can potentially pop
lots of overhead resistance on EXEL.
Any comments on MRNA anyone?
thanks.
Hi TC – don’t know anything other than it fell below the 200d – I sold half around then to raise cash to buy other stuff. I was way too heavy on biotech with ANPI and MITI. Trimmed some, but holding the bulk of ANPI for sure, not sure how much MITI wil remain after today.
I am all out of MITI @5.85. VICL is seeing some serious selling, but it is staying above $2.10. I am going to see how it finishes and might sell around then.
GNBT on its way
LDK is breaking out
TRID consolidation today is pretty tame. TEN still holding its breakout pattern. XTXI doing nicely.
EXEL – a lot of support as well (20, 50, 100, and 200-day MA’s immediately underneath it.
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GOOD IDEAS. KEEP ‘EM ROLLIN
CDII may have some continuation going for it
ATV, but super thin
MRM on the move .. crazy one
I know its a large cap, but WFC looks like a breakout could be imminent.
XOMA has major volume today, also GNBT.
HEB with a little pop
All priced stocks are welcome. I don’t discriminate against PROFIT.
nice call on LDK, Gludibokslosh. i didn’t look at it until now though. Breakout looks like it happened around 9.77, I just got in at 10.28. Wish I had taken a look earlier. at 1:46 pm, it was right at the perfect buy point.
GFG – check it out!
IP also close to breakout
CSE if it can pop out a few more cents
CA,
GLBC … if good, where would you put a stop for a swing play (earnings on thurs)?
CA,
GLBC … if good, where would you put a stop for a swing play (earnings on thurs)?
Thoughts on ORB?
watch LJPC last half hour..
GLBC is extended. If you had to buy it, then a 10% stop would be fine.
CA – Think BLC has more legs here?
CSE looks great I’ve jumped in @ $4.31
ARNA. Already successfully recovered after retracing a morning spike, and has spent the past hour consolidating between $4.70-4.85. A break above $4.85-4.90 resistance, with volume, would still be interesting.
Disclosure: I’ve been long ARNA for a while. (If I had no position, I’d only consider it at these levels if it breaks current resistance on volume, otherwise, I’d wait for a pullback.)
Look where the 200-day MA is located on BLC.
Chart Addict… I think you’re a fucking fake! Dude, you suck, i’ve seen your kind before. Use all these fuckers to prop up your stocks; you’re a fucking flash in the pan.
You’ve got a cult here and you’ll eventally bury them and yourself so far up your ass, you won’t know what to do next.
Mr. Satin what do you think about “my cock”! i think it’s on the rise!
Glud – Jumped into CSE with you 🙂
IP breaking out as I write. WFC also nearly there.
Grouch is jealous. People here make money…
Son of a *bitch*! Adding @$5.
pwav, omex, arna, cse (pullback)
all moving
Thanks CA – That gives me a nice price objective on BLC
Grouch, I’m pissed you wasted 10 seconds of my time. Go away.
Think DVAX is worth getting into again?
PWAV on the move
Hey Bill – VICL held at the 2.10 level pretty well.
Do you have AMLN in your portfolio? I am thinking this is a double with the once a week diabetes delivery system.
PLD and PDLI guys, what do you think?
Bought CNXT 1.15
Holding VICL for now. Cash, pipeline, product, diabetes / huge market – made some room for it – AMLN is in the portfolio now, thanks
I dont have AMLN in mine yet :O
I have to purge some other holdings first. Too many names in my drug related portfolio. Tough to keep track of them all.
Bought COOL $2.02
Bought DVAX $1.60
Thanks CA!
75% long, 9 positions.
CA, Playing COOL prior to earnings? or day trade?
when is earnings? lol
*I see on 6/15. Let’s see what happens from now until then.
COOL earnings june 15
CA, check out GFG
HUGE AMT OF VOLUME and very strong move today. RSI moving toward 50. Could make a run to $.75-$1.00. What do you think?
Chart,
Good, bad, or ugly??
MHGC – 19% short interest (lots of pain above $5), play is similar to BEE but less risk? Takeover rumors always in the background on this one.
CALP – Quick ride to $1.90~$2.15.
CTDC – Move above $3 should take it to $3.70+
That is one ballin’ featured blogger tab you have there CA.
CLWT – double strong!
Now about them horses CA…
Drew – yes, one to watch very closely.
shroomz – minting coin up in here. Everyday.
retox –
a) MHGC – has chance to get to the 200-day MA, maybe another 5% higher possibly.
b) CALP – broke through major $1.50-$1.65 resistance, but is extended.
c) CTDC – looks fine
d) CLWT – $1.30 support, possible flagging. Friday could have been a bearish exhaustion gap. Very illiquid.
Chart,
Thanks. Really just trying to find a couple that are not already covered in the PPT or on your blog (not easy to do – the best charts are already “in discussion”).
Guess that’s a good thing…
Cuervos –
Ok, so basically, this is my first time betting/gambling on a horse race. I didn’t want to do it, but it turned into a strategy game after I realized a few things.
So lets say, there were 8 horses in play, 2 of them were 1:1, 4:5, or whatever…basically really popular horses among the betters.
Now lets say that there were 5 horses with 10:1 or higher (some even 30:1+). If you look at the potential payoffs, and let’s use the $2 example that was in my booklet which I lost, the payouts were ridiculous. I do remember that a WIN on a 1:1 on a $2 bet only netted $2.40.
These horses were unpredictable and didn’t give an edge like stocks would. Instead, If I took $2 and bet on those 5 ‘unfavored’ horses, it would cost me a $10 ‘investment’. If just one of them win, I will make a profit, and 5 out of 8 horses game me a 63% of winning.
A few times, I had odds of 75% or more. If the 1:1 popular horse won, I lost my money, but all I need is 1 shit horse to win to make up that loss.
So, as I saw the Minutes to Place, most times I waited until the last 1-3 mins before going up to the window to get a ticket.
The best example was the 11th race with Mine that Bird. Everyone loved that horse and that horse made up almost 50% of the entire pot. #4, which was Summer Bird was one of the crappy horses. I doubled my bet on all of the unfavored horses 5 or 6 of them (can’t remember). My one bet on #4 covered my initial cost and I made a nice profit.
One race had only 6 horses and 4 of them had over 10:1. The easiest thing was to bet on those 4 horses, giving u a 67% chance of one of them winning.
I never did the trifectas or exactas or any other combination bets because your odds of winning those are too slim, despite the much higher profit potential. If you placed a WIN, it gives you a much higher chance, despite a smaller profit.
In the end, it worked out very well, and it was really simple to figure out. The only thing is, don’t play a race if your odds are less than 50% or 60%, meaning there are too many horses that have a 1:1 or 2:1 or any of the fractions in between.
Many times, there were horses with 7:1 or higher. Let’s say a WIN paid off like $10 if you won. If there were like 10 horses, and there and 5 horses were 7:1 or higher, then you wouldn’t play, because the odds are 50%, there are more favored horses. If you did win, you’d get $10, or you will breakeven, giving u no point in playing in the first place.
Towards the end, I was using my winnings to fund my bets, and I never changed my “strategy”.
Lots of examples, and I don’t remember exact things, but it worked for me.
Maybe it was beginners luck, but I doubt it. I won too many times by doing this. And, all you need to bring is a calculator (which was on my phone). My battery died out after the 11th race.
awesome strategy on the horses! gotta try them out.
CA what are you takes on BEE and FITB?
Thanks CA.
While I expected some kind of mathematical formula – what you presented was pretty much common sense.
I googled “information theory dog racing” and found out that my post from 2008 is the first hit for that set of keywords.
Weird but, here’s the link to the article I mentioned if you’re interested: http://ai.arizona.edu/papers/dog93/dog93.html
I boxed Mine that Bird, Dunkirk, and Summer bird. First time i’ve ever hit a trifecta. to be honest, this is only my 3rd time trying though. and i put no thought into it whatsoever, i took half of my buddy’s action. i’ll take the winnings to the bank though!
I already own KOOL, if I buy COOL that would make me 2 cool? That really leaves an opening for Grouch. 🙂
BEE and FITB are good.
Cuervos – thx. Yea, no complicated math formula, just simple probabilities. When people start complicating things or have expectations of a huge windfall, that’s when they get into trouble. It was really fun though. Placing a bet 1 min MTP was like buying a stock at 3:59PM.
I think I looked at all the girls with the big hats more than I did the horses.
Gunners -are u serious? What was the payout on a $2 bet? Had to be more than $1,500.
Thanks CA!! Nice Q&A. Your answers are very thoughtful. Much appreciated!!!!
have a few from a new screen…
RNWK MRNA CDII WBS ONTY RNP ALKS VMED
Thanks for your contributions
i’m serious. the payout wasn’t as big as you think. here’s the payout table:
Belmont Park – Elmont, New York
WIN PLACE SHOW
1ST Summer Bird $25.80 $9.30 $4.70
2ND Dunkirk $5.40 $3.60
3RD Mine That Bird $2.60
4TH Charitable Man
5TH Luv Guv
OTHER PAYOUTS
$2 EX (4/2) paid $121.00
$2 TRI (4/2/7) paid $295.00
$2 SPR (4/2/7/6) paid $852.00
$2 DD (5/4) paid $152.50.00
$2 P03 (2/5/4) $2,577.00
$2 P04 (4/2/5/4) $17,085.00
$2 P06 (6/7/4/2/5/4 5 Correct) $2,482.00
$2 P06 (7/6/7/2/5/4 6 Correct) $969,345.00
so therefore i got $295 to $2
CA
thanks in advance for your time and replies to all of our questions, as its greatly appreciated and valued by most
follow up on the trendline question…….
if we do not have access to the charts intra day but have a good feel for free hand trendline drawing, do you recommend a tool to alert you for these trades…
one day when I do this fulltime again I will be sharing more info from a Market Maker (NITE) standpoint too and help in the dialog if I can provide any value
MOOSE