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geosing

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Posts: 356
Reply with quote  #1 

Entered Lot L-1 today on a DOW Reversal Buy Signal.

 

We had both an ASC and a P2T PBS. Today's move up and a close higher than yesterday's close  provided the Reversal Buy and we got in with the first LT lot @ 23.85 (Cheated by buying before the close. The stock closed at 23.96. If missed today, it is okay to buy tomorrow at today's closing price (or perhaps better). Let us see how this trade pans out.

 

Why is B1 not an ASC? To be an ASC (Ascending Bottom), the trading range must be completely above the range of the bar making up the bottom. B1 does not qualify, but B2 does. Another nuance about ASC is the range of the bars making the bottoms. ASC is valid only when the ASC bar trades above the bottom with the biggest range bottom bar starting from the MainTrend Bottom.

 

For example, in PTEN's case, if B1 Bottom Bar's range were larger than that of B0, then B2 will not qualify as an ASC, as it did not trade completely above B1. We would have to use B3 to initiate the ASC and the PBS. So it is important to monitor the range of the bars forming bottoms and tops of swings.

 

Geo

Fine Print: Postings are strictly for stock market entertainment and possibly instructive of a trading methodology of a master (Mr William Dunnigan). Not meant to be an advisory or recommendation to buy or sell.

Abbreviation

Meaning

ASC Ascending Bottom
BR Bottom Reversal
CPR Closing Price Reversal
PBS Preliminary Buy Signal
P2T Penetration of 2 Tops
RB Reversal Buy
TOB Test of Bottom

 

 

 

 

 

 

 

 

 

 

 

 

 

 


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geosing

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Reply with quote  #2 

Some price progress today (10/25) with a close marginally higher than yesterday. The high wave candle is not very encouraging, but let us hope that the upswing continues. Operating Plan for PTEN per DOW calls for a Profit Factor of $5 and initial Stop Loss of $5. But Mr D was working with weeklies. I intend to use 3 x 10 Day ATR, which for PTEN is about $3.00 - which is pretty close to our signal MainTrend Low of 20.81. A close below this, we shall take the loss and look for the next campaign. Once a Reversal Signal is given, DOW gives a lot of room for the trade to work - especially for the first lot, which is 1/4th of intended full position. Therefore nullification of P2T or DES will just make us grin and bear it, provided it does not hit our stop levels as per our OP. (Operating Plan).

 

PTEN gave a good entry today (even below yesterday's close). I have observed that price tends to probe the high of either of the two preceding tops, usually the lower top. Good entry points can be had there (imo).

 

Geo

 

 

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DickW

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Reply with quote  #3 

Thanks for the DOW study GEO, I'm following and it looks like an interesting method. Reminds me of P and F charting in a way.

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geosing

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Posts: 356
Reply with quote  #4 
Quote:
Originally Posted by DickW

Thanks for the DOW study GEO, I'm following and it looks like an interesting method. Reminds me of P and F charting in a way.

 

I am glad at least one person reads this stuff.  

Of course, I am doing it for my own education. Yes, it does sound like a profitable method - as close to mechanical as I have ever seen. Actual futures trades all worked flawlessly so far. I am still a skeptic - at least till I execute a few short sales. For the current market environment, probably any method including darts will probably work.

 

Geo

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DickW

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Reply with quote  #5 

I certainly agree with the "throwing darts" comment, I'm starting to think that this thing is easy and I know it is anything but.

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geosing

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Reply with quote  #6 

With a close of 23.22 on 10/27/2006, our initial LT lot of PTEN is under water a bit. Our stop is in place. This downswing may start giving repeat buy signal if and when it resumes its upswing. We will take the repeat signals once our first lot is in the money. If not, not.

 

The stringent requirements for ASC and P2T and further requirement of thrust before initiating that first buy make sense now. We want to be very sure that the MainTrend has changed direction. Just in case we are wrong (we could be in PTEN, GG etc.), we risk only 1/4th of the funds earmarked for this line of stock, keeping losses small and preserving capital.

 

Geo

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geosing

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Reply with quote  #7 

PTEN is still in a downswing, which started soon after we initiated the L1 position. Seems to be underperforming the sector, when compared to OIH. From DOW viewpoint, today's bar may complete the TOB. An up day (thrust up) from here will confirm the TOB and a higher close will have us buying the second lot, if the first lot shows paper profit. Stop is in place at the Maintrend Low.

 

Geo

 


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geosing

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Posts: 356
Reply with quote  #8 

Well, PTEN reversed today ending its downswing. If our first lot had been in profit, today's repeat buy signal would have been acted on. No such luck on the Bottom Reversal since our L1 lot is still under water. The fact it is so tells us that the trend reversal is still suspect. Till we get clarification from the market, we will not risk any more on PTEN.

 

Geo

 


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geosing

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Reply with quote  #9 

Couple of quick Repeat Buy Signals from PTEN. However no action taken, although Friday's (11/3/2006) close came close to our Lot L1 entry price to deserve another buy. I intend to take only the next RBS due to the rapidity of the signals - looks like the market has not made up its mind yet.

 

After this experiment. I have concluded that trading stocks in the short term is just not my cup of tea or cocoa or any other beverage. I don't just see the justification for the equity required and time required to get adequate returns - especially for one like me who trades full time and for a living - with limited trading days left. In addition - with ags like corn, wheat and beans going electronic, you have excellent trading vehicles. Yes, risk is higher commensurate with the reward, but risk control/money management is at the core of all short term trading any way ...

 

Geo

 


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geosing

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Posts: 356
Reply with quote  #10 

PTEN is doing fine with an upswing in progress. Having convinced my trading partner and commandant that trading stocks is not for us, I will cease and desist from posting stock stuff. Thanks for reading my nonsense thus far.

 

Geo

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geosing

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Reply with quote  #11 

Sold all lots of PTEN for 26 - all lots in profit. Adios.

 

Geo

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