Consolidation setup today.

Here is another take on the same chart as I posted earlier but looking at the one trade that I missed and let run mostly out before entering.

This is a classic example of a triangle consolidation pattern that is the basis of my old CTP strategy, here is an example of the same strategy in day trading.

In CTP the red arrows would indicate trades entered and exited, basically buy low sell high and short high and cover low. Entering these trades would put me in a position to take advantage of the breakout in either direction.

In today's case the trade would be long only and have been entered at about 1000h as the price hits and bounces off of the S1 green line. Entry around $22.75ish for the prime position, $22.80ish and $22.85ish as secondary entries.

Once the price breaks out the trendline gets established (dashed red) at 1018h and holds as it bounces along at 1025h to R1 when it breaks the line around $23.20. I would choose to exit at R1 though. I could choose to exit half of the position at this point for a guaranteed 45 to 60 cents per share then let the rest ride to $23.35 for 60 to 75 per share on the balance. This takes the chance that the price will drop while I still hold a position.

Profits

Ranging from $80 to $120 depending on entry, exit and scaling strategies.

Yes, this is a hindsight trade but it is only a matter of not having entered this trade at the S1 bounce, just a matter of timing. The consolidation setup would only have been acting as confirmation of my trade, not really part of the entry plan until I have a larger capital to work with. In that case the pattern would indicate adding to the position along the way, scaling into the trade.

I don't normally get into speculating on trades, but, seeing as I am already doing it, let's see what a scaled trade might do here.

Buy at $22.70, 22.80, 22.90 and 23.05, 400 shares average price $22.8625.

Exit half at $23.25 and the balance at $23.35 for a $145 net gain.

Not bad, but I expect I would just buy in all at once at the bottom and scale out instead.

Buy 400 at $22.70.

Sell 100 at $23.10, 23.25, and 200 at $23.35.

Profit of $205 net.

No matter the trade style the fact remains that the trade is a profitable one so there is no sense in trying to speculate on the maximum profitability except for the purpose of getting familiar with differing ideas.

Jeff.

The perfect setup

Today I concentrated on the perfect setups.

I like consolidations that are overdue for a move. Triangles, horizontals, descending, ascending ...whatever. I like to set the limit on the far side of the trend so the worst thing that happens, if I am wrong, is slightly less than break even. Even a small move in my favour but one that looks like it might not go anywhere is still good for a gain. This was the premise of my old CTP trading plan earlier in th eyear, except on a daily trading basis rather than a minute basis. Now I need to work on fast charting as I don't have the luxury of playing with the charts overnight. Spot those trends quickly, identify the pattern, plot the trend lines and make the trade. I miss a few because I am a minute or two late and the move has already started without me.

Even so, all that chart reading I did before has paid off well.

I made four trades today but only one was a real trade. The others I had interruptions distracting me so I would not actually enter the trade...as I mentioned in the past I do not like to be in a trade when there is potentetial to have to leave it.

Of course the two winning fakers were nice smooth sliders and I garnished 80 cents per share on each. One was a break even. The only real trade, I choked on (the mental stop was pennies too tight) and gave up 60 cents of the 90. Still a 0.5% net gain for real.

So a combined 4.80% return. I will be glad when I can dedicate the time in the morning to trade exclusively until about 1100h. There will be no fake trading then and all, or most of the gains will be real.

If anyone is reading these do keep in mind that I am not currently writing in a manner that lends itself to learning anything from these posts. It is as much for me to feel that I am being accountable if only to myself.