Style explanation
by Ivica Juracic
Several traders ask me about my style and what I’m looking for. Here are few words about that with some fresh trading examples. Also I will use this opportunity to use free trial and see what I’m doing in the live trading room. Everyone interested can reserve mentoring program. All about mentoring program read at: http://www.xpertstocktrader.com/index.php?option=com_content&view=article&id=53&Itemid=80
I will talk little about me my style, and most of you already know that I'm breakout traders with 11 years experience. I have my own trading service 4 years, and been in other firm 5 years as moderator and trader teacher.
Plenty of members went over my mentoring program. I'm using mentoring program for new traders because it is good way to explain what I'm doing and how I'm doing that at one place because sometime live room activity wont give us chance for that. During mentoring program I’m focused on members and I don’t trade so I can give them all my time.
Most of you know my motto and it is move - rest – move and of course it is simply explanation.
There are few very important things for my style and one is several times frame screen.
http://www.xpertstocktrader.com/2010/tradingscreen.jpg This is my trading screen.
I have two monitors for that. On the left sides are indices...2/5/15 min time frame charts and others are stock charts. I have 5/15/60/120/daily/weekly time frame open all time. That’s mean when someone asks me or when I scan for I can see whole picture right away. Bigger time frame support/resistances are always more important then smaller time frame support/resistance. It is important to know because if chart will come to, lets say, daily 20sma (what is big r/s area) first time and if chart will try to break it first time then usually wont work, and if I will see great 5 min bull flag setup with daily 20sma.-.I wont take that trade because risk is to high for me. Point is that more time frame charts give me whole picture for expectations and for trading risk. For my style that is very important because I'm looking for continuation and reversal patterns, and 5 min or 5 min pattern (base, triangle or flag) don't mean much to me if daily chart look bad. Another very important thing for me is risk/reward.
If I will see great 15 min base with 50 cents stop and if next resistance will be after 50 cents then risk/reward is bad and I won't take that trade. For that I need again my trading screen with several time frame charts to see if there is reasonable room for good risk trade. Risk/reward is important for our profitability because one target trade can cover at least 2 loss trades. In case that we won’t pay attention on that, easily we will come in to situation when one loss trade will cut several target trades and that is for sure not good way to be profitable trader. I'm technical trader and charts are my tools, so I must always understand what’s going on.
got a question, what did u see in GOOG to have it short?
Let’s see chart again.
http://www.xpertstocktrader.com/2010/04232010goog.jpg
First blue line is move, after that we saw consolidation; it is triangle consolidation .Brown line is 10sma resistance area. So we had move - rest - and I was look for continuation my first entry was risky early entry based on GOOG weakness on market strength, and I was expect that will start with selling when market will lost steam.
yea, I notice that, when you called that short. The market was picking up.
Official setup was under triangle, so official setup was under 544.50 and that is triangle setup (book triangle setup). On GOOG trade it is impor6tant to use proper risk.
What will lead me in to another important part of trading and it is risk management. I have some experience with teachings traders, and I heard many questions and opinions. Maybe GOOG is really bad example, because it is extremely big stock. But many new trades wont trade lets say $80 stock or $120 stock because it is too big. It is not important at all how big or small stock is. It is important trading plan; also it is important to always use proper risk.
Let’s say that 1% of your account is $200. Then focus is on $200 and that is max loss what you want to use. If it is big stock then you will take less shares and opposite. It is more important to see whole picture. You can see enough big moves for good risk/reward and reasonable trading plan. Most of you know I'm not fan of scalp trading. I won’t say that I don't believe in scalp trading, but I want to say that I'm bad scalp trader, and that is reason why I avoid them. I like to have time to analyze charts and to make trading plan and for scalps lots of time that must be very fast.
Another thing. As I said above it is important for us to always understand what charts doing. For me it is not every chart tradable. Our job is to find know situation (pattern) what we like and what we understand and trade that. I can't explain everything in few min, but I will give short explanation. I know for every problem, because I tried everything, so my advice is: it is good to try every pattern. It is good to try scalps, day / swing and position trades, BUT, for that you need time. That is learning process, and it is important to use extremely small risk. I used 5-10 shares for that and then I saw what is best for me, where I feel good. I found that I feel better with longer term trades (mostly swings). For traders it is very important to have clear head, because if head is not clear fear or greed will come out and then wont be reasonable thinking.
Trader always needs to be focused on chart, because there are all answers. If you will watch account every few min then head is not clear and very probably you want trade with trading plan, Trader always must have trading plan before any setup and that mean, entry, stop, possible target area (also partials if you use that). For that you must be focused only on charts, not on account.
Let me find some example..
http://www.xpertstocktrader.com/2010/04192010lmt.jpg
http://www.xpertstocktrader.com/2010/04202010fcn.jpg
This is another example. FCN is triangle example. I like triangles. Note that pace on initial move. It is very important. It will tell us what we can expect and other time frames will tell us what target we can expect, also it is important top compare individual chart action with market action.
Unfortunately I can't explain everything in hour or two, and for that I have mentoring program. It is two week program in separate room where I cover everything important to be successful trader. Experience is big part of trading, and because of that it is very important to go over learning process with symbolic trading. It is period for building experience, building confidence and learns. Most of traders don’t do that and they want to make million in one day and because of that most of them come to trouble.
http://www.xpertstocktrader.com/2010/04262010goog.jpg
This is GOOG chart at 04/26/2010
http://www.xpertstocktrader.com/2010/04282010googt.jpg
This is 04/28/2010
I hope that you all see style. It is move - rest – move. Triangle pattern is rest period and gave us nice risk/reward opportunity (it is over 6). We had also few intraday setups on it too, so if you find good pattern on daily or weekly chart it can be used several times for day trades too.
http://www.xpertstocktrader.com/2010/04272010bucy.jpg
This is BUCY from 04/27/2010. Entry was at 66.85, with stop at 67.10. We closed BUCY before the end at $65.05.
http://www.xpertstocktrader.com/2010/04282010bucy.jpg
Risk/reward was over 7.
I know those are better trades, but point is not to tell how good they are because you all will see that from charts. Point is to explain style and even you won't stay with us, please try to start to think on that way.
Here are few examples from last week:
HIBB
http://www.xpertstocktrader.com/2010/11192010hibb.jpg
http://www.xpertstocktrader.com/2010/11192010hibb5.jpg
HAIN
http://www.xpertstocktrader.com/2010/11192010hain.jpg
http://www.xpertstocktrader.com/2010/11222010hain.jpg
FINL
http://www.xpertstocktrader.com/2010/11172010finl.jpg
http://www.xpertstocktrader.com/2010/11222010finl.jpg
Those are just few examples and all you can find at:
http://www.xpertstocktrader.com/index.php?option=com_content&view=article&id=73&Itemid=66
Kind regards
Ivica Juracic
www.xpertstocktrader.com
