INTU - Long

[rosow]

All,
Haven't posted in a while. Though I think the short side is basically the place to be right now (I'm in 3 shorts and 1 long as I speak), INTU is intriguing to me and I may step in tomorrow for a buy because of the following reasons:

a) Nice symmetrical waves 1,2,3 and 4. Wave 2 was a deep pullback of wave 1. Wave 3 was around the 1.618 extension of wave 1. Wave 4 was the 50% retracement of wave 3.
b) Wave 4 is a decent ABC blue reversal at the typical WPT and a tweezer bottom ta boot.
c) As Steve stated today in the morning report there may be a pause in the downtrend i.e. the market is getting pretty darn oversold. I would say today's action at least paused the downtrend. For the outset this will be played as a counter trend move i.e. stops raised quickly.
d) Volume was pretty low in the wave 4 retracement vs. the wave 3 impulsive move.
e) STF is blue on both the weekly and the daily.


I'll watch the open and see what happens from there. As always a stop will be in place in case Mr. market has other ideas : >)

See attached.

Lenny

[rosow]

All,
Well I'm in and stop is in place. Homework is done and money management is now king. We shall see. See attached.

Lenny

[rosow]

All,
Stop is now moved to break even. Next target is the minimum wave 5 WPT. If hit the stop will move up to a one bar low until there is a close outside of the minimum wave 5 WPT. See attached!

Lenny

[rosow]

All,
Got stopped out today @ B/E. "No harm, no foul". Didn't work out as I had planned but I'm here for another day : >) See attached.

Lenny

[rosow]

All,
Well it was a good attempt with a bit of bad luck on the B/E stop. Typical WPT was hit today. I'm finding the weekly STF trending in the same direction as the daily buy/sell stop helps alot in keeping out of some bad plays. What say you??? See attached!

Lenny

[NHN123]

All,
Well it was a good attempt with a bit of bad luck on the B/E stop. Typical WPT was hit today. I'm finding the weekly STF trending in the same direction as the daily buy/sell stop helps alot in keeping out of some bad plays. What say you??? See attached!

Lenny
This is very annoying when it happens. I know it's good money management, but nonetheless, it is still annoying.

I thought of something: We use ATR for trailing stops, so why not use it for decding when to move to B/e? Say when price hits 2*ATR above/below entry, move stop to b/e?

Steve, have you ever looked at anything like this before? Just a thought, may be worth some discussion at least.

Thanks
Nick

[jswin]

All,
Well it was a good attempt with a bit of bad luck on the B/E stop. Typical WPT was hit today. I'm finding the weekly STF trending in the same direction as the daily buy/sell stop helps alot in keeping out of some bad plays. What say you??? See attached!

Lenny

Hi Lenny,
I also took that trade and closed it for a profit at just over 2x initial risk - a bit prematurely it turns out.
I did not bring my stop to break-even because, based on Steve's advice to give stocks more wiggle room than other markets, I like an entire bar to have formed beyond the 100% initial risk area before adjusting my stop. This may reduce b/e stop-outs where the stock has an intraday or very minor pull-back, especially after days which have moved a long way and this was the case with INTU.
I am not sure if we can use the ATR on EOD?
Cheers Joel

[jswin]

All,
Well it was a good attempt with a bit of bad luck on the B/E stop. Typical WPT was hit today. I'm finding the weekly STF trending in the same direction as the daily buy/sell stop helps alot in keeping out of some bad plays. What say you??? See attached!

Lenny
Hi again, over the past few weeks I took some Daily paper trades on the S&P500, and a couple on FTSE100 and Forex which were specifically counter-trend - that is against the weekly trend of the governing index for the stocks and, for Forex trades, against their own weekly trend. Trend was based on the 20 period MA, or new STF filter.
Trades were closed based on Steve's rules.

Trades closed: 10
Won: 4
Lost: 6

Losing trades constituted a 6R loss
Winning trades constituted a 17R gain.

In addition, I only traded setups which looked good to me. I know this sample is too small to be useful but I've decided to trade long and short when the index is choppy rather than just in the weekly direction and put most of the emphasis on the appearance of the setup.

[Steve Griffiths]

Hi Jeff,

WOW............

6 Losing trades constituted a 6R loss
4 Winning trades constituted a 17R gain.

Now that is what I call good trading and sums up exaclty what is required to be a succesful trader. more losses than winners BUT the winners much larger than the losses so overal you make a good return.

An absolutly brillaint example that 95% of amateur traders can learn from............

Steve

[ericd2281]

Joel,

Am I correct in reading your post that 10 trades taken AGAINST the trend resulted in:

Losing trades constituted a 6R loss
Winning trades constituted a 17R gain.

Regards,
Eric

[jswin]

Joel,

Am I correct in reading your post that 10 trades taken AGAINST the trend resulted in:

Losing trades constituted a 6R loss
Winning trades constituted a 17R gain.

Regards,
Eric

Hi Eric, I wish I had documented the trades properly, I have now deleted some of them. If I had known they'd have done so well, I'd have kept them all on record :) I should state again that I was paper trading, I wish I had taken them for real...
Actually, having another look at it... according to the STF, the weekly trend was down from the week beginning 19/06. Bars were not red but they were in negative territory so I guess this indicates short. So, although the 20MA was flat, short trades on the S&P would actually be classified as being with the trend. So, apologies for confusion there. Apparently it was not much of a study into countertrend trading at all ;)
I guess really that allays confusion rather than creates it, however, as it does appear Steve's filter does a good job.
Sorry about that, I actually took trades both with and against the trend. I still think the appearance of the setup is very important.

[rosow]

All,
Thanks for posting. We've now got a thread going here in stock land : >) A few questions on my part:

1) Can someone point me to where Steve talks about looser stops on stocks? I was under the impression that as long as the bar closed above the 100% level one moves their stop to break even. It stays at break even until your first target is hit. Once the first target is hit you could:
a) Old rules - Trail the stop on the daily lows until a bar closes above the first target. Stop then remains below that bar until the next target is hit and we start all over again.
b) New twist - Turn on the ATR stop loss and follow the trade up from there.

2) Not that I haven't been paying attention to the overall indexes but my main decision in trading a stock up or down is that the weekly STF of that particular stock is:
a) In the same direction as the daily STF and preferably no divergence showing up on the weekly i.e. a lower hump on the STF with a higher price on the weekly chart.
b) Showing a divergence and getting close to the zero line. STF may still be over the zero line but color is black instead of blue. I'm still feeling this out even if the color is still blue. (2) lower humps 3 in all. I shorted HAL on 07/13 with this picture in mind. See attached.

3) Joel, I'm curious, why would you be stopped out of INTU if you were able to avoid the 7/20 bar?? The next 4 bars have higher lows?? See attached.

Lenny

[jswin]

All,
Thanks for posting. We've now got a thread going here in stock land : >) A few questions on my part:

1) Can someone point me to where Steve talks about looser stops on stocks? I was under the impression that as long as the bar closed above the 100% level one moves their stop to break even. It stays at break even until your first target is hit. Once the first target is hit you could:
a) Old rules - Trail the stop on the daily lows until a bar closes above the first target. Stop then remains below that bar until the next target is hit and we start all over again.
b) New twist - Turn on the ATR stop loss and follow the trade up from there.

2) Not that I haven't been paying attention to the overall indexes but my main decision in trading a stock up or down is that the weekly STF of that particular stock is:
a) In the same direction as the daily STF and preferably no divergence showing up on the weekly i.e. a lower hump on the STF with a higher price on the weekly chart.
b) Showing a divergence and getting close to the zero line. STF may still be over the zero line but color is black instead of blue. I'm still feeling this out even if the color is still blue. (2) lower humps 3 in all. I shorted HAL on 07/13 with this picture in mind. See attached.

3) Joel, I'm curious, why would you be stopped out of INTU if you were able to avoid the 7/20 bar?? The next 4 bars have higher lows?? See attached.

Lenny

Hi Lenny,
I was not actually stopped out of the INTU trade. I took profits at just over the 2x profit mark. Whereas the other trades I mentioned were paper-traded, I took INTU for real. It was an interesting personal insight for me which emphasised the need for discipline. I allowed several paper trades to run to the 5R+ mark, but closed the real one for 2R... that was a learning experience :)
You may want to double check this with Steve, but he mentioned somewhere in his course that stocks tend to trend better and so he allowed them more 'wiggle room'. In practise, this meant waiting until a stock closed 'well beyond' the 100% line - I know INTU did, but it was still an intraday crossing of that line and I now like to see a full day's trading on the other side of that level. And he also recommended using the 20MA as the trailing stop, this was before the ATR was mentioned and may gave been superceded. I believe the ATR is still not accessible on MTP EOD?

[mercy]

You are doing a great job my mate by updating daily.
Its really helping people like me,.
Thanks a lot.
Keep posting.........