Quarter 2 Analysis and Quarter 3 Prospectus
Well, I’m ending the quarter down 73 dollars.
March was still my best month so far with about $100 in profits.
I was profitable in April and June, but in May I made a rookie mistake that took me down a big notch. I was working a multiday breakout when I stopped out, but only stopped out 1 share of a 70 share position. I wasn’t aware. At the same time, I added to another trade that was going well and was unable to stop out of that when it turned around on me. So, I was in two dumping trades at a time, one of which I had just added to and couldn’t exit.
I was trading small sizes (>100 shares) through April and May in an effort to get past my fear of entering trades. It was successful. I believe that had I been trading full size through those months, I would be up significantly more than I am.
Through April, my most successful pattern was Dip and Rips and Multiday Breakouts. I went through many names for MDBO’s, but it turns out it was already a thing. I stumbled into it watching ten day charts – I couldn’t say why anymore, but I’m glad I did.
For whatever reason, Dip and Rips stopped working for me, slowly throughout May. I ended June with 0 Dip and Rip wins (but only 3 Dip and Rip attempts).
My win rate with VWAP Holds is not stellar, but my best gains are significantly greater than my worst losses with that pattern – when I trade them correctly. Unfortunately, I don’t always trade it correctly and so my resultant averages are not favorable, although practice does lead to improvement. June was my best month for VWAP hold patterns.
VWAP Reclaims are questionable in efficacy. I’ll likely abandon these trades entirely, except in the most favorable of circumstances.
(ALL BULLISH INDICATORS)
Must be a top gainer, with unreasonable amounts of volume, with no clear downtrend, above the VWAP and the 50 sma. Preferably near 52 week highs.
My bounce plays need work –
Bounce play is a misnomer.
I’ve characterized buying at support on a hot stock in a hot sector,
Dip buying a morning panic,
And buying an actual bounce
All as Bounce plays, which is both unhelpful and impractical.
Multiday breakouts are by far my best and favorite setup.
I prefer to get in before the breakout, near support and consolidation.
My favorite pattern within that setup is ascending triangles or cup and handles.
Reverse head and shoulders are also compelling.
Quarter Three Prospectus
Multiday Breakouts
Having more or less identified my strengths, comfort zone, sweet spots, and favorite patterns while also overcoming my fear of entry, I intend to double my position size on my A+ setup.
If I spot a potential multiday breakout that checks all of my boxes, and includes my favorite patterns, I’ll take 200 shares.
I’m still a little skittish about holding overnight, so I’ll keep those share sizes small and increase them as I gain confidence.
I’m attempting to cultivate patience. I won twice on $GNUS, but if I had held from my first entry… well, you can imagine. It was my A+ setup, but I didn’t really know it at the time. Several plays since have confirmed my thesis on this setup and I’ve benefited from most of them, but not nearly to the potential that I could have.
To that end, I think I’ll take half profits at what I believe is the top and try to let the rest play as long as I remained convinced and convicted.
For example, $SOLO today – I entered at 2.40 and took half at 2.66 and half at 2.55 during premarket. If I had set my stop at my entry, I would not have been risking anything anymore. Also, it never returned to my entry and I could have tripled my profits.
That has happened time and time again. I’d like to think that I’ve learned from it – and that I can cultivate more patience with these trades.
VWAP Holds
I haven’t mastered – or even become proficient with – these trades, but I see the potential.
I think the main problem is that I do not like entering once a stock has already become volatile.
I don’t like getting in high. I don’t like buying the breakout.
I do like buying close to support with the potential for a breakout.
VWAP Hold says a stock, preferably in a hot sector, puts in a high of day, holds VWAP throughout the day, and comes back to its highs around the 2 o clock window.
We’ve seen so many plays run during “lunch hours” lately – May and June – that if one were to wait until 2, one would miss a great many plays. And I did. $GNUS comes to mind. On the day of the big break, it broke out at 12:30.
I think strictly following the 2:00 window rule can lead to a lot of misses.
On the other hand, I tried the VWAP hold on $SOLO today and it failed. At noon.
Perhaps it’s just that they fail some times.
I’ll continue to attempt VWAP holds, with a caveat.
I’ll only trade a VWAP hold on a higher low setup and not risk off the VWAP, but on the highest low relative to my position. I’ll continuously raise my stop to higher lows and consolidation.
Buying on Support
I’ve found that this is useful when I predict a u-shape on a hot stock. Buying the B-wall as it turns into the C-wall and risking off the bottom of the C-wall has been very successful for me, especially on stocks in the 1-1.50 range. The tight movements allow for tight, reasonable stops and when resistance breaks, these little pops can be quite profitable. It might take larger size to squeeze any real profit out of most of these, but the risk is minimal and the reward is potentially great. It’s got to be a hot stock, though. Lots of shares traded. My favorites of these have been pumps.
$KTOV $IDEX
Dip Buying Morning Panics
I’ll continue to study and practice these using paper trading, implementing them if I find great success.
I’m going to direct some studying toward Tim Sykes on this, as he’s the master of the Morning Panic Dip Buy. I’m also going to explore Tessa Lamping’s YouTube channel, as I believe her beginner mindset can be helpful. The masters often forget what it was to be a beginner and beginners sometimes explain their process so much more thoroughly as they’re walking themselves through it.
But, as I understand it, these morning panics work best with OTC’s.
So I’ve set an intention to learn OTC’s.
I keep putting the interesting ones on my watchlist – which is to say that they are hitting otcmarket.com, have volume, etc – but then forgetting to watch them in lieu of my favored set ups. Anyway, it’s an intention and at least they’re making the list. So, if I keep up that habit, I’m sure I’ll wind up watching one eventually.
So!
Trading:
Multiday breakouts
VWAP Holds
B-walls w/ higher lows
Practicing:
Dip Buying Morning Panics
OTC Breakouts
Happy Quarter Three!
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