This was a good entry, got in after a retracement. It turned out to be a valid breakout. However, it was quite a nail biting encounter when the price pulled back to where I got in. I held on to the trade as the price did not break below the support. This stock has a 2 year high at $3.58. To protect my profit, I should have place a profit target at this price and get half of my position out. But I was too late to do it. So I decided to get half my position out at $3.34, which is the nearest support and leave the other half of the position at $3.20 to go with the trend. I am not sure whether it was a blessing, I happened to be sitting in front of the computer and see my order was rejected as it only accept trade size in multiple of 2,000 (I wanted to sell 5,000). Then I realised it was not worthwhile to sell in 2 batches as the commissions will erode my small profits. Hence, I decided to sell everything at $3.34.
Bought 10,000 shares at $3.23 on 3 Mar 10.
Sold 10,000 shares at $3.34 on 13 Apr 10.
Commission = HK$350
Profits = HK$750 (S$134.65)
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{ 6 comments… read them below or add one }
I think, looking at the system you using, and i must qualify that i’m no expert, if you run a backtest, perhaps your chances of winning is higher if you buy when price hit the red line, when it corrects, than to buy when it breaks up the blue line. So, in that logic, i be buying china water now, at 3.34 or something .
I think, looking at the system you using, and i must qualify that i’m no expert, if you run a backtest, perhaps your chances of winning is higher if you buy when price hit the red line, when it corrects, than to buy when it breaks up the blue line. So, in that logic, i be buying china water now, at 3.34 or something .
If you have come across Van Tharp’s book Trade Your Way to Financial Freedom, you might want to go through it. He has 1 chapter on setup, 1 chapter on entry and 1 chapter on profit taking. It’s a thick book, his recent book Super Trader is a condense version. The peak trough system is only an entry system, this probably forms 10% of the entire trading system. In the book he also explained how a ‘coin flip’ entry can still be profitable because he controls the exit. To back test this peak trough system, one way is to do it manually day by day, candle by candle. This way of paper trading by moving the candle one at a time to the right gives you a chance to see if this system works for you. Remeber the trader is part of the system. Manual backtesting is the best, it gives you a chance to practice and understand the internal psychology and see if your chart observation base on peak trough system filtered the right information for you. There are people that trade without filters meaning no indicators, no moving average just price, trendline and ruler and they are still very profitable because the tools they use provided sufficient accurate information.
If you have come across Van Tharp’s book Trade Your Way to Financial Freedom, you might want to go through it. He has 1 chapter on setup, 1 chapter on entry and 1 chapter on profit taking. It’s a thick book, his recent book Super Trader is a condense version. The peak trough system is only an entry system, this probably forms 10% of the entire trading system. In the book he also explained how a ‘coin flip’ entry can still be profitable because he controls the exit. To back test this peak trough system, one way is to do it manually day by day, candle by candle. This way of paper trading by moving the candle one at a time to the right gives you a chance to see if this system works for you. Remeber the trader is part of the system. Manual backtesting is the best, it gives you a chance to practice and understand the internal psychology and see if your chart observation base on peak trough system filtered the right information for you. There are people that trade without filters meaning no indicators, no moving average just price, trendline and ruler and they are still very profitable because the tools they use provided sufficient accurate information.
Thanks guys for sharing.
I have read Van Tharp’s book. The system that I used is a breakout system. The reason why I buy above a particular resistance is on the pretence that the stock has momentum to go higher.
But I do hear your opinions and thank you for them
Thanks guys for sharing.
I have read Van Tharp’s book. The system that I used is a breakout system. The reason why I buy above a particular resistance is on the pretence that the stock has momentum to go higher.
But I do hear your opinions and thank you for them