Tag: Stocks

How it got my attention, stalking it, waiting for it to set up, execution, stopping out, then re-entering.

Tools used for this trade.

• TC2000 (daily scanning for swing setups)
• Heikin Ashi and regular candlestick bars
• Sierra Chart (executing a more precise entry)
• Aggression Bars (this is what I named it…custom coded indicator for Sierra Chart)
• Donchian Channels

In this post I’m going to go through the entire process of this trade. Starting from the moment it arrived in my daily scan, to stalking it for a spot to execute a trade, stopping out, and then re-entering. I’ll continue to update the trade through take profits and the eventual full close.

How $OKLO got my attention.

The entire focus of my swing / trend trading efforts is to buy a stock once strength has shown its hand. I don’t bottom feed, and I don’t buy value in these types of trades. I want to have momentum on my side.

The cornerstone for all entries begins with new 10-day highs after the most recent 10-day low.

Seen here $OKLO makes a new 10-day high on December 18th after the most recent 10-day low, two days before on December 16th.

I use Heikin Ashi bars quite a lot. I use them on every time frames. They help me to see the overall structure much better.

Same view here, just without Heikin Ashi bars.

Now the stock goes into my watch list to stalk it for a recognizable chart pattern that it can “break out” of.

Usually, I try to go down to lower time frames and find a recognizable chart pattern to find something to “break out” of.

After the new 10-day high, I spotted this pattern setting up on the 15min chart.

I bought the 15min breakout on Christmas Eve 2024.

Things were going great…for one day.

The breakout got tested, which is completely normal. But it got tested multiple times. Which was telling me that “maybe, this breakout is going to fail”.

And then it did.

4 trading days later I stopped out of the trade.

That’s trading.

I continued to watch the different time frames and noted the below pattern on the 4hr chart.

Seen here again but with candles only in TC2000 using the 1/2 day chart.

Both of these charts look nice. The price is adhering to the trend lines nicely.

Then yesterday January 3rd 2025 we got a powerful open. The price pushed up against that 4hr trend on the 15min chart.

Price pulled back initially, then it bulldozed on through the 4hr trend line.

Once I got a 15min Aggression Bar on the breakout, I entered again.

I sized the trade so that it has room to breathe. In general I do not believe in tight stops (Note*1 below). I want to give all of my positions every opportunity to work. This one will have to close a 15min bar below the lower 4hr trend line support for me to exit with a stop.

Seen above, the 1/2 day chart in TC2000. Showing the chart pattern and break out.

I’ll continue to post updates on this trade.

Next post will either be a stop out, or a 1/2 position take profit.

If you have any questions or comments, feel feel to post below.

Notes and Nuances:

*1 I don’t subscribe to tight stops. There are very successful traders that utilize tight stops.

This is a personal preference geared more toward risk and reward.

With tight stops you can size more into the position.

With a tight stop you have a larger position, you will potentially have a larger return. You also have a larger chance of stopping out.

With a looser stop you size down so that you can withstand more volatility. Your overall risk might be the same, but you have a greater chance of not getting stopped out on reactions. The give and take of this luxury is that you must get a larger move in the direction of your trade to achieve the same return.

I choose to give my positions more room to breathe.

But there is no right or wrong way across the board. As I said earlier, there are great traders who utilize tight stops. They are not wrong, because their system works for them. There are also great traders who utilize much looser stops to withstand more volatility. They are not wrong either.

All of this said, my loose stop might be a tight stop for others. I remember hearing Stanley Druckenmiller talking one time about how he doesn’t use stops at all. Just a 15% loss and he’s out. This works too,obviously…(Stanley Druckenmiller is a legend).

How it got my attention, stalking it, waiting for it to set up, execution, and trade management.

Tools used for this trade.

• TC2000 (daily scanning for swing setups)
• Heikin Ashi and regular candlestick bars
• Sierra Chart (executing a more precise entry)
• Aggression Bars (this is what I named it…custom coded indicator for Sierra Chart)
• Donchian Channels

In this post I’m going to go through the entire process of this trade. Starting from the moment it arrived in my daily scan, to stalking it for a spot to execute a trade, to removing some risk, and how I’ll eventually close it out (the trade is still open as of 12-26-24).

How $SERV got my attention.

The entire focus of my swing / trend trading efforts is to buy a stock once strength has shown its hand. I don’t bottom feed, and I don’t buy value in these types of trades. I want to have momentum on my side.

The cornerstone for all entries begins with new 10-day highs after the most recent 10-day low.

Seen here $SERV makes a new 10-day high on December 2nd after the most recent 10-day low, November 18th.

Now the stock goes into my watch list to stalk it for a recognizable chart pattern that it can “break out” of.

I begin to notice at chart pattern forming on the lower time frames. Here it is on the 30 minute chart.

Now I’ve got a “recognizable” (*1 Note below) chart pattern that the stock can “break out” of. (*2 Note below)

Here’s what I now know that the stock is telling me.

1. First, it’s showing strength. On December 2nd it made a new 10-day high after the most recent 10-day low.
2. The stock is now in my stalking watch list.
3. I spot a recognizable chart pattern that we could possibly break out of.

On December 5th the stock breaks out with Aggression. Seen here on the 30 minute chart.

The entry would be anywhere after the break out with an Aggression bar. Aggression bars are custom in Sierra Chart. I programmed them so that they show me extreme volume as well as extreme speed of the move relative to a look back.

Now that I’ve got an entry, I want to monitor for a spot to take some profits.

I always take 1/2 profit on the first 4hr Aggression bar after entry.

The next day, $SERV created a 4hr Aggression bar. I take some risk off. This was about a 30% gain on 1/2 the position.

Now that I’ve removed some risk, I’ll trend follow the remainder using the 10-day Donchain. A close below the 10-day with a Heikin Ashi bar will get out of the trade completely.

My trading is a hybrid approach. Swing trading for 1/2 of the position and trend following for the remainder.

Swing trading generally sells on strength and trend following generally sells on weakness.

So far, it’s working itself higher nicely.

If you have any questions, feel free to comment below or send me an email to [email protected].

Notes and Nuances:

*1. I am very loose with the term “recognizable”. I just want to see some structure building that everyone else can see too. This is crucial. I don’t want to buy a breakout that has very little participation. I want to see traders fighting over good trade location.

*2. “Break out from” is also up for interpretation. But, as a general rule, I always practice the idea from above in *1. If it’s a noticeable pattern that many traders other than me can see, then I have a spot where I can break out from. It’s also important that I have a good spot to break out from, so that I can define my risk based on this area of break out.

How it got my attention, stalking it, waiting for it to set up, execution, and trade management.

Tools used for this trade.

• TC2000 (daily scanning for swing setups)
• Heikin Ashi and regular candlestick bars
• Sierra Chart (executing a more precise entry)
• Aggression (this is what I named it…custom coded indicator for Sierra Chart)
• Donchian Channels

In this post I’m going to go through the entire process of this trade. Starting from the moment it arrived in my daily scan, to stalking it for a spot to execute a trade, to removing some risk, and how I’ll eventually close it out (the trade is still open as of 12-19-24).

How $EOSE got my attention.

From a swing / trend following mindset, I won’t give a second glance to anything that hasn’t made a new 10-day high after the most recent 10-day low. I scan for this. Not the entire universe, select criteria. See more about it in this post.

On Monday, November 25th $EOSE made a new 10-day high after the most recent 10-day low. I placed it into a “stalking” watch list. I will then monitor the daily chart and periodically cycle through the lower time frames to see if any structure is building. Some structure that we can “break out” from.

I’m a breakout trader. I’m not a bottom feeder looking for a deal. I don’t buy value. I don’t anticipate breakouts. I want to buy when I get confirmation that there is extreme excitement and fervor in the stock or futures contract.

The first step to achieving this and keeping me on the side of the momentum is to wait for a new 10-day high to be made, after the most recent 10-day low. There’s nothing unique about this. It’s arbitrary really. I could choose a new 5-day high, or a new 50-day high, or even a new 1,000-day and I don’t think it would really matter in the end.

It’s all about process. Having a process that I follow – like a religion.

Here’s what it looked like on a Heikin Ashi daily chart. New 10-day high, after the most recent 10-day low.

Now it’s got my attention. It goes into a different watch list where I’ll stalk it for an entry.

Now I’ll go to Sierra Chart, where I’ll look at it on the smaller time frames.

Here’s what caught my attention. On the 30 minute chart. Some nice structure building. I am constantly cycling through regular candles and Heikin Ashi bars. I can get a more holistic view if I do this. Many times I’ll catch something that is absolutely perfect on the Heikin Ashi chart that is just a choppy mess on the regular candle chart, and vice versa.

Up this point, here’s what I now know.

1. $EOSE made a new 10-day high after the most recent 10-day low.
2. On the smaller time frames there is a recognizable chart pattern.
3. Now I have something to “break out” of.
4. I can plan the trade in advance. If this happens, I’ll do this, with this much size, according to a stop located here. Etc.
5. When / if it breaks out, I won’t be thinking. I’ll just be reacting. Zero thinking. None. When I start thinking on the fly, I lose.

On November 29th, the breakout came, and I was ready to enter.

The last piece of confirmation I need to take the trade is Aggression. It’s something proprietary that I coded in Sierra Chart. It shows me with a painted bar if there is extreme volume and urgency in the speed of the move…relative to a look back period.

I will NOT execute a breakout trade without the presence of an Aggression bar. I usually want to see it happen on a 30 minute or a 15 minute breakout bar. If I want to get in earlier, I can use the 5 minute. Even the 1 minute can be used to get in early. Although the risk of the trade failing on the smaller time frames is greater. I’ve found that the 15 and 30 minute are just fine most of the time.

Everyone gets hung up on entries.

I was a victim of this too. In fact, I could teach the class on how to agonize on how to get the best entry. Then, I decided to let go of that agony.

• Do I have a plan to place the trade when my if / then system tells me to do so?
• Do I have a plan to size appropriately so I can let the trade breathe? Most trades don’t go in a straight line.
• Do I have a trade management plan? What will I do once I get in this trade, how do I get paid?

If I have answers to these questions, then I did my job. After these questions are answered, then I’m just a glorified button clicker. (Note *1 more on this below)

I’m in the trade, now what.

I trade via a mind algorithm. I do the same things over and over and over. I do not want to think. I don’t want to guess. I just react.

If I say I want to sell into strength…that’s great. But, what is strength exactly? How do we define strength? Is it just magnitude of move? How do I know that a massive move the next day was not all that strong, and that I should sit tight and wait for “real strength” to exit some of the position? The only way I can do this is to have a system for taking the guess work out of my trading.

I use the Aggression bars. I’ll wait for an Aggression bar to paint on the 4hr time frame. (Note *2 more on this below)

On December 16th I got my signal to remove 1/2 risk.

I still have a 1/2 position on and I’ll trend follow it. I want to see a Heikin Ashi close below the 10 day Donchian to close it out. This will keep me in the trade for as long as possible. (Note *3 read more below)

I’ll update this page when the trade concludes or if I get a spot to add to the position. In the meantime, if you have questions you can comment or send me an email. [email protected] .

Notes and Nuances:

*1 I have the same thinking when it comes to day-trading. While the execution is much faster than executing a swing / trend trade. The concepts are universal. For instance: What am I looking for? What will get me into a trade? Why here…why would I take this trade now? Once I’m in the trade, now what?

The trade planning is done in advance so I know when my if/then statements are true – there is zero thinking. When I think on the fly, I lose.

*2 I like the 4hr to scale some profits because it’s not too long and not too short. I want to scale some profits when we’ve had a long period of volume and speed of movement euphoria. I want to scale out of some when traders think that it’ll never go down again. When that feeling kicks in, it’s time to take some risk off the table. The 4hr gives me that. Conversely, there would be too many 15min Aggression bars, and I’d be guilty of taking profits too quickly before real strength kicked in. The daily chart would give so few signals that I may never get out of a position.

Until I find a better system, the 4hr works.

Sometimes, price will go straight up in the days after I enter. But a 4hr bar will never print Aggression and I’ll eventually get stopped out. That’s trading. That means the move was not strong. The strongest moves will print a 4hr Aggression bar at some point after my entry.

*3 I stole the exit portion of this system from Jerry Parker. I believe he uses 4 different systems. But his smallest look back is much higher than mine. Maybe it’s the 150day Donchian – can’t remember. Meaning he would close his position on the 150 day new low (I’ll wait for a Heikin Ashi close). He also stays in trades for years at times. I’m certain his system is better as he’s a billionaire.

I don’t know the exact details of how he trades. I’ve just pieced together some nuggets here and there from interviews. I’ve been highly influenced by Jerry.

Jerry would never sell partials though. Again…Jerry is a billionaire. His system is better in every way…guaranteed.

How it got my attention, stalking it, waiting for it to set up, execution, and trade management.

Tools used for this trade.

• TC2000 (daily scanning for swing setups)
• Heikin Ashi and regular candlestick bars
• Sierra Chart (executing a more precise entry)
• Aggression (this is what I named it…custom coded indicator for Sierra Chart)
• Donchian Channels

Today I’m going to discuss the process of identifying RIVN as a potential swing trade. What initially got my attention, how I stalked it for an entry, what exactly was the signal that got me into this trade, and how am I managing the position.

First, I break the world of stocks that I’ll look at into three different scan groups.

• Mega caps
• Gainers (learned from Kristjan Kullamägi.
• IPO’s (5 years or less)

I scan each group for all stocks that has made a new 10-day high.

If it’s the first 10-day high after the most recent 10-day low then it goes into a watch list to monitor for a valid setup for entry. (I’ll discuss the different setups I use in a another post.)

How Rivian got my attention.

Rivian showed up in my IPO scan and the Gainers scan 10 different times since October 24th. The entry wasn’t until December 5th.

From the chart below:

1. First 10-day high after the most recent 10-day low. Now add it to a watch list to start stalking for a setup to execute. (Note on this below *1)
2. This is another 10-day high, but mostly irrelevant to me. It’s not the first 10-day high after the most recent 10-day low. Nothing has changed. Still stalking for a setup.
3. New 10-day low. Remove from watch list. It’s dead to me at this point. It could rocket past the high of #2 and I would have zero fomo. It would simply go back into the watch list.
4. This is exactly what it did. Made a new 10-day high after the most recent 10-day low. Back into watch list to stalk.
5. Sold off hard…but did not make a new 10-day low. Still in watch list.
6. This new high is mostly irrelevant to me…other than it’s signaling that it is done going down for now. Still looking for a setup.

For swing trades, I’m (almost) always looking for a chart pattern to breakout from. There are nuances to this stuff and sometimes an exact chart pattern doesn’t present itself. This doesn’t mean I won’t take the trade. That’s why trading is an art not a science.

In this case, RIVN started to put in a very nice flag / triangle. The actual chart pattern is not really relevant to me too much. I really just want to see that some sort of structure is building and it’s not just a wild west show on display.

I use Heikin Ashi bars along with regular candlesticks. I can get a more holistic view of what is happening with the structure with each chart I view.

See here, the difference in how they look on a daily chart. Note the nice chart pattern starting to set up.

Heikin Ashi

Regular candlesticks

Now that we’ve got a recognizable chart pattern that we can “break out” from…I’ll go down to the smaller time frames. I do this because when I get into trades, I want to time them so I can have the best potential risk / reward entry as possible.

This could be overkill for swing trading, but it works for me. I find that it’s a good skill to hone though, as it is absolutely essential for day-trading.

Now down to Sierra Chart. Sierra is incredibly versatile. First, what I like about it is that I can load any data that I want. If I’m looking at a stock to enter, I want to see ALL price action. I want to see how a stock traded pre-market and regular trading hours…for every day…not just the past two sessions. I don’t know about all other platforms, but in TC2000 you only get pre and post market data for the past two sessions. I believe TradingView allows to view all days. I don’t use it religiously though so I’m not sure.

I’ll start cycling through the lower time frames and see if anything sticks out like a sore thumb. In general, if I have to look too hard it’s not going to end well for me.

Here’s RIVN on 30min Heikin Ashi chart.

Same chart, just without Heiken Ashi.

Now a 15 minute Heikin Ashi chart

Then the same chart, without Heikin Ashi

Now the stock has my absolute attention.

1. New 10-day high after a recent 10-day low. (Note *2)
2. Obvious chart pattern on a higher time frame (daily) that we can “BREAK OUT” of. (sometimes an obvious chart pattern does not form on a higher time frame…this is why it’s crucial for me to also watch the lower time frames to find the pattern)
3. Obvious chart pattern that we can “BREAK OUT” of on a lower time frame that is “INSIDE” the larger time frame.

Now we just watch and wait. The very next day, December 5th we got what we stalked for…an aggressive move out of the smaller time frame chart pattern that was inside the larger time frame chart pattern.

The final piece of the puzzle…AGGRESSION…as seen here with the 15min bar going yellow. This means that the move was a combination of volume and speed that I want to see when I get into a break out trade like this.

I programmed what I want to see in Sierra Chart to paint the bar yellow. Generally I’d like to see the bar close yellow before I start a position. Many times the bar will paint and then un-paint numerous times because the condition is oscillating between true and false while the bar is still in the making. (Note *3)

It’s not just volume, but speed of the move that I’m interested in. I want the entire bar to be all about aggressive traders getting into the trade and I’ll just hop on for the ride.

Here’s a look at how I’ll manage the trade initially. For the first day, my entry areas and my initial stop.

Now where will I scale and hold? I have such hard a hard time holding onto full positions…it’s a struggle of mine. Very much a work in progress.

For now, I use Aggression bars on the 4hr time frame to begin to scale. As seen below. I’ll sell 1/2 into strength on a 4hr Aggression bar. This is serious strength that I’m selling into. The buyers can’t get enough when these bars print….the want it all and they want it all in speed. So let’s let them have some of our risk.

Now we have a 1/2 position left. I won’t move the stop here. I’ll leave it in place on the break out daily low.

We are going to let this ride and go back to our Donchian channels to exit. We could be in this trade for a very long time, or it could take us out tomorrow. It’s up to the market. At this point, I don’t want to think I know what it will do…because I don’t. We are just going to be around for whatever it does.

I choose to give a lot of room to my trades when letting them run. To some this would be too much, to others this wouldn’t be enough. But it works for me. I take a trend following approach to trailing the final piece. I’ll close it on a Heikin Ashi “close” below the 10-day lowest low.

The arrows in the above picture would denote places where there was a Heikin Ashi close below the 10-day lowest low. I like the Heikin Ashi close because it’s allows for a lot more movement and time for the price to recover.

That’s it, I’ll ride this trade now until it gives me a signal to exit. Let me know if you have any questions. I’ll update this post when we get a signal to close out.

Notes and Nuances:

*1: I’ll always look at the smaller times of the new 10-day high candidates… sometimes they’ve just broken out of a very nice chart pattern on a smaller time frame with Aggression, if this happens, I’ll look to initiate a position the following day. Here’s an example:

EOSE Daily Heikin Ashi

Down to the 15min

*2. A new 10-day high after the most recent 10-day low can often occur many times in succession, for weeks and months sometimes…this is the epitome of consolidation. These kinds of consolidations usually end in a break in either direction at some point.

TSLA Daily chart for an example.

*3 Many times when a stock or future breaks out, it will be so intense and powerful that, by the time the bar closes on that time frame, I would have a non-desirable trade entry location.

This is not usually such a big deal in swing trading because I’m looking to get into positions that last much longer than a few minutes or hours like a day trade. But, there are times when a 15min bar will move an entire daily ATR just by itself.

To fix this, I will set ATR levels. If the stock breaks out and moves more than 1/2 of a daily 10 period ATR, I won’t wait for the bar to close. This is strictly from breakout point to 1/2 of a daily 10 ATR.

I’m sure there are better ways, but this works for me. I will never take a trade though unless there is an Aggression signal showing up. I don’t care how beautiful the set up is. I want to see mass participation with traders stumbling over themselves to get into the breakout move.