So it’s been a week or so since the last post and I figured it’s time…Cabo was awesome and I really hate having to work for a living but I think we are all trying to change that…
What’s been happening…Well, I’m no longer under the PDT rule and for some reason I am even being more conservative with my trades. Percentage-wise I’m taking smaller positions to try and concentrate on being correct more often with smaller wins versus only being correct a few times and banking more. I have my main account with TOS and have a few $ in ETRADE (mainly to trade SPY options) for the following reason. I can still see the Level 2 with ETRADE but I hate their charts along with having to manually enter the BID or ASK price with either the arrow or clicking on the current price to ‘fill in the box’. TOS’ BID ASK changes live per the actual BID ASK price. In a fast market these can change very fast and it is very easy to lose several cents because the price you had to manually entered has already changed and you have to reenter the order again because price has already moved away. If ETRADE changes this function then I will move those funds to ETRADE. I realize that ETRADE has more opportunities to short stocks and I will lose out on some opportunities there so in the meantime I’ll be focusing on re-entries into an earnings winner or first, second, etc., day spike of a runner.TOS does have shares to short sometimes, just has to be in play.
This brings up a question about how our boy T spots these continuations to buy into a previous earnings winner or previous strong bullish news runner. I was thinking how in the hell can he see all of these previous stocks and spot which one might be taking off again, especially in the later part of the trading day??? I might not have found his exact reasoning or alert but I have noticed something over the past few months. Remember, his alerts are to study from but some are also to jump on board…it’s your money so trade it as you wish.
OK…looking back at the following reentry buy alerts from Tim: GBSN on 5/20 3:29pm, MOMO 5/21 1:36pm, RWLK 5/22 3:57pm, and PTBI from 5/26 3:49pm; all these are EST. My charts are from CST. Before I give you the answer, or ‘my answer’ to how he might be pulling the trigger on these late afternoon entries, go back and look at the charts to see if you can spot a probable answer.
If you have no patience like Yoda told Luke…then scroll down keep reading from here….
Starting with GBSN from 5/20 3:29pm.
The red vertical line is one hour before the close or the beginning of ‘power hour’. The yellow arrow pointing to the volume spike is just a few minutes before the alert was sent and does include his price for entry. I’ve talked about volume slam bars previously in the blog and these are simply very large spikes in volume, red or green. In this chart there is a large red slam bar that might signal a selloff just a few minutes before the alert was sent and before what his entry might be. However, look at the arrow pointing to the price action with the red slam bar. This is referred to as a Hammer or a Hanging Man in candlestick terms…it never hurts to know a few things about the actual meaning behind what the candles are telling you or might be telling you.
A hammer or hanging man means the following: bullish reversal pattern that forms after a decline. In addition to a potential trend reversal, hammers can mark bottoms or support levels. After a decline, hammers signal a bullish revival. The low of the long lower shadow implies that sellers drove prices lower during the session ( or time frame of the candle). However, the strong finish indicates that buyers regained their footing to end the session on a strong note. Tim is a smart trader and probably recognized this pattern, then the volume shows up and the buy order is placed.
MOMO from 5/21 1:36pm.
OK, three arrows here. Again, the buy alert goes out just after the first yellow arrow with another volume spike in the later part of the day. The second arrow is another volume spike and again look at that price action, but this is an inverted hammer or shooting star that means the opposite of the hanging man or bullish hammer…and the price fades. Third yellow arrow with another volume spike which could have been another buy entry. Incidentally, 16.20 was good support so I’m thinking that’s why he held through this.
RWLK from 5/22 3:57pm.
The stock was holding firm all day and not breaking support. Volume spikes both ways but price still held support. This would have been a scary (or conservative low % entry) entry for me and probably would have passed either way because of the stock price and volume spikes but I’m focusing on the probable reasons as to why Tim got in here…the volume spike perhaps towards the end of the day.
One more, PTBI from 5/26 3:49pm
It looks like there were a few more opportunities to get in before the ‘yellow arrow buy alert’ but who knows….he might have been applying sunscreen to Bianca or something….OK, I’ll give him that one.
Along with the probable volume spike for reentry, there might be specific candlestick formations AND what the Level 2 is saying during the spike = wall of sellers or buyers showing??? So, there is more to take in versus just the volume spike but it's a start.
So how do you look for these volume spikes all day? Do you look at 50 charts all day until your eyes want to pop out of your skull? Or do you set and alert for a volume spike??????
Yeah…an alert!!!! This will be in the next blog post about how to set an alert in a watchlist for a volume spike per the current bar AND you don’t have to watch 50 charts either….This is for TOS…Stand by.
You might ask why am I going through all of this trouble trying to figure this all out??? Well, if I can help someone out I'm going to do it. I'm a giver, not a taker. And, making money is important. But, I think learning to UNDERSTAND how to make money is even more important.
First, a break from our sponsors and a pic of me and my crazy Colombian wife on horseeys…on the beach…in Cabo….ahhhhhh
Cheeca cheeca wow wow....