Progressing on Big Charts

I have been away from the forum for a while. I have been working my tail off, learning how to trade big charts. I am finally to a point where I feel I can talk about a few things from my experiences. Hopefully, someone will find value in my approach.

First of all, I am not great at this, but I have had successful trades. Those of you who were familiar with me when I started trading, I traded AAPL with a lot of assistance and guidance from a mentor. Well, the only thing that has changed is, my mentor is distant and has forced me to trade alone and learn what I need to know with no assistance. His point is, I needed to do this work because I should know how to trade well. He is right, so I did it by reading, going back through 2-5, and practicing. Well, I have done some trading also.

I have one expert stock-Apple! I have two other stocks that are in my back pocket, but I do not trade them often. I trade AAPL 90-95% of the time. The other two stocks that I like are Visa and FB. Apple is my bread and butter. Visa is my support stock-if AAPL does not offer me a trade within a week after selling a position. FB is sitting on the shelf right now. I do not like anything in this stock I am seeing right now. I will hold it because I have made money by trading it in the past.

I use the Daily/55 or 233/34. During this time of the year, I am only using the Daily/55. I use the 21 to enter all trades. I know we were taught to use the 8 in 2-5. The 21 works well for me because I want that "E" on my action chart. I also take a look at my weekly for long term strength confirmation. The weekly is not one of the indicators that will be a deal breaker for me, but I have a lot more confidence in the strength and length of the trade if it is going in the right direction.

I will do my best to breakdown my last trade. I am still in it because I have no reason to get out. I entered AAPL on 10/28. I took a very large position, so I bought 4 months out in time (Feb). I will probably not be in it that long, but we will see. Apple gapped up on 10/21 after earnings. If you look at the Daily, candles were outside the BB's. I waited for the candles to see the formation of candles when coming back in the bands. The technical peices that had me salivating were, the red crossed the green (on the chart-GWsettings), the MACD was pointing up, the ADX line was pointing up, candle formation was showing some forms of continuation. On 10/24 a Doji formed. For me it appeared to be a continuation candle, but I still wanted more cofirmation-although that MACD and ADX was pointing straight up. The 10/27 candle had me a little concern, but again, the MACD and ADX were still moving in the right direction-UP. On 10/28 and on the 55, I had a HRFP, MACD up, ADX up, and a cross on my chart (55 GW settings). My Trend Chart was still showing so much strength on the MACD and ADX. I knew this was my trade. On the 21, , and my secret indicator, Money Flow line was pointing straight up. I entered the trade at 9:48. I have learned the importance of staying calm and expecting success-not being giddy and suprised the trade went so well. We work hard at this, so we should expect success. This one trade has a value of more than 1/2 of what I earned in all of last year! That just blows me away. I will ride this trade until I have a reason to get out. I have very little trading stress right now. I am bogged down in charts at work. I can see what is going on with my cell. I know the magic number that will force me out, so I do not need to worry about it. If the number is hit, I exit the trade, take my profits and live to trade another day.

Take care and keep pushing forward.

Sorry- but I meant to say "I an NOT bogged down in charts at work".

Nice trade Rookie. I do have a question on what made you stay in the trade November 5-10? I noticed that the macd stopped moving upward and the histogram flattened and the ADX flattened on the D. I appreciate you sharing as I am still, after 4 years of continually trying, learning to do this. Thanks

Rookie,

Always love yor posts. Please post all the details of your trade when you close it out. I think when readers can see the actual $ figures that one makes in a given trade it gives us all something concrete to aspire to. Love reading about your transition to bigger charts. Thanks.

According to the experts AAPL is a good mover up after Thanksgiving. So happy 4 u!

Hey Stacees,
Excellent question! I stayed in for two reasons. First of all, I had a nice chunk underneath me, so I wanted to ride it out until it totally exhausted itself. I was a bit concerned from Nov. 5-10, but I never got the cross on the Daily (GW cross on the chart). I had a cross on the MACD and the MACD D line was starting to point down, but I held this bull by the horns and wanted to wait for that cross on my chart. Until that red crosses that green on my chart, I am staying in. I know this sounds elementary, but it is truly that simple when I have as much "Fat" underneath me as I do at this point. If I were not up so much at this point, I definitely would have bailed somewhere between the 5th and 10th. That candle formation would have given me an indication that the strength was starting to weaken, and a possible pullback was in the very near future. Much to my pleasant surprise, it started back up.

My toughest challenges and questions are, When should I be happy in Seattle? When am I simply being greedy? I have come to this conclusion...... I must trade the evidence. Doesn't that sound familiar-lol. I have to trust my research, chart knowledge, GW training, and my instincts. I get out when I have a reason to get out based on who I am as a trader.

Darcy, you are absolutely right. Apple can be a beast- if a person knows how to trade it. The fascinating thing about this stock is, it trades so similar to the way we were taught. It is amazing how it moves. I love the fact that it is moving very similar to the way it moved when it was on it's way to $700.

I do not know if you have ever heard of this statement, but I trade big charts (F/W Zone) based on the "From through too" concept. I look for the candles to start from the bottom of the BB's, go through the mid band (50 day), and too the top band. Normally that is a 200-300% move off a Daily Chart. Anything more than that is gravy. Apple started "From" then blasted "Through" and went "Too". Now I am just looking for a reason to get out because it has done it's job.

I will stop for a minute. I do not want to take over the forum, but it is pretty exciting to start learning how to trade big charts- and share this with you.

Rookie, nice trade!

Stacees, obviously I cannot speak to Rookie's reason for staying but I too am in AAPL and have been since 10/21. I took a decent position in my IRA immediately following earnings (around 102). The reasons I stayed are as follows:

1.) Look at weekly chart during that time (11/5 - 11/10). Next bigger charts always provides clues. Riding the bands up and MACD widening (not to mention riding the monthly TBB with MACD open)

2.) Around this time the Daily produced a pattern discussed in either Survivor II or III that suggests continuation up. Actually there are a couple of things taught in Survivor across multiple charts that gave me more confidence to stay in. Obviously cannot discuss in this forum but the patterns are there.

3.) I have been following AAPL for almost 10 years so I am a bit familiar with how is moves. I also bought the stock and do not need to worry about time decay. Had I traded the options then this is a good example of why GW suggests buying time. If someone had bought this month or next month the option price could have been chewed away from 11/5 to 11/10 while moving sideways. Still profitable but staying may not have been worth it.

NCT

Man... Apple just keeps going and going. Rookie is going to be able to pay the house off with that trade

Look at lnkd ON 11/17 at about 10:25. That is about the most perfect Put setup I have seen. There is a HRFP on the Daily, 233, and 55. I did not trade real money, but I popped a practice trade. Those setups do not come often, but I was not confident enough to drop real money. Oh well, I will see how the practice trade goes and keep a close eye on this stock.

S/O traded LNKD on 11/17.



Edited 1 time(s). Last edit at 05/07/2015 09:24AM by Darcy2.

I new someone else was on that trade. You two smash trades! Your process for identifying trades is second to none. I am still working on that part. I tend to miss a lot of trades because I want to analyze too much. Like LNKD is a distant stock in my basket, but I watch it as well. Anyway, I am tightening down my processes. GOOD TRADE!

rookie30,

I first must say that I enjoy reading and analyzing your posts. In my quest to become a successful Big Chart trader you are very helpful.

In reading some of your earlier posts with tanman, you mention that you trade the weekly options. Is this still the case now that your have transitioned to a Big Chart trader?

Also, what is your view on looking at the Delta of an option? I am trying to get a better grip on options, how they are priced and how they move with the stock price. I believe that tanman talks about paying attention to the Delta in the earlier posts I mentioned above. I recall very clearly from my past Gary classes that Gary does not pay any attention to any of the Greek stuff and was very adamant that fact. I am only bringing this up because of the recent post by Spang67, Plan = Structure and Plan your Loss, where he was so kind as to post his risk – reward (R3) spread sheet. The Delta is a main component of Spang67’s R3 calculation.

Thanks,

Dave

Dave-

Not to hijack the thread but I only use the delta to (roughly) calculate the effect of stock price change on the option price in so much as I try to set the Take Profit and Stop Loss (though less so) on support and resistance levels on my Decision chart, which I try to use for my exit signal, and to pick the strike price relative to the both the delat and the lot size.

I don't pretend to be an option expert AT ALL, but I like the front month or second month, in the money options, and I use the releative commision cost to help choose the option as well. For example, an option with a .25 bid will result in 100 contract trade with my same-dollar trade ($2500) with my commision of $7.00 plus $1.25 a contract would result in a 10% commission rate that I have to overcome, whereas if I go deeper in the money I pay more per contract but get a higher delta and have a relative commission more like 2-4%. That's the main use of the delta and the relative commission part of the calculator. Let me re-state that I am NOT any kind of expert on options, but that's how I plan my trades and how I use the R3 calculator. It works for me.

Joe

Dave,
I do not trade weeklies anymore. Well, I have not traded them since I started studying Big Charts. I will start back practicing small charts when I am more confident in Big Charts. I want to have the knowledge to trade both. Since using BCs, I have to buy out enough time for the position to develop. Sometimes it could stall a bit-or go up, flatten out start back up. I bought out through Feb in AAPL. I bought a smaller position a few days ago (AAPL) and only bought out through Dec-well 3rd Friday in Dec.

I really think the key to BC trading is, having really good knowledge about 1 or 2 stocks. APPL is pretty funny to watch sometimes. I can clearly see when there is a little pull back during the day, but I know within about 2 hours, people will buy in because it is slightly down. It comes back and higher than previously.

I am totally unfamiliar with the Delta. Honestly, I have no idea what it is. I will read Spang67's post and get a better understanding.

I was speaking with a friend via Private Messaging. He suggested the possibility of identifying criteria, researching a larger number of stocks and finding trades that fit perfectly with my style. Well, I will share a few I found that would have worked perfectly. I am still in AAPL.

AMZN Enter-11/11 ($309)-11/25 ($334) still running

CF Enter- 11/11 ($258)- 11/25 ($275- still running

V Enter- 10/21 ($211)- Exit 11/17 ($248)

AAPL Enter- 10/22 ($103)- 11/25 ($118) still running

I actually like the idea of finding perfect setups on stocks that meet my criteria. Is there anyone ever in more than one trade at a time? I guess my point is, if you are in a trade that is running well, and you foresee holding the position for a couple of months, but another trade presents itself, do you pop the trade?

I just exited AAPL for a few reasons.

Red Flags:
-AAPL opened above the previous day high, but lost a lot of steam and aggressively fell below- but the DOW AND NAS SLID UP (not good sign for AAPL).
-Off the 55, my red crossed my green- going down (A lines on my chart).
I counted 25 candles (days) the red has been above the green on the Daily. This has been a long run, so it has to correct or pull back.
-I have a HRFP on the 55 going down
-MF has weakened
-I am seeing signs that AAPL could be overbought.
-MACD down on the 233 and starting to turn down on the Daily
The stock price continues to slowly tick down.

Last, I do not want to leave ANYTHING on the table! This has been the best run of my life, and I want it all! If AAPL keeps running up, GOOD!

I respectfully and calmly chant........BIG CHARTS! BIG CHARTS! BIG CHARTS!

Rookie,

You are too funny! LOL.. Good trade on AAPL. Regarding your question about popping the second trade I think it is personal choice but also a good idea to leave yourself the option of being able to do the second trade IMHO. Everyone might see it a bit different. Once I tell you what I do there will be people familiar with the new class format that could tell you that I am not doing exactly what GW says. My only comment is that it is not GW's basket. I had to find a healthy balance between comfort level, common sense, and giving myself options. My trade size or "X" size is typically around 12.5% to 15% of my basket - maybe a little less or a bit more. It is not uncommon for me to be in two trades at one time which would represent roughly 25% to 30% of my basket. If at least one trade is going as anticipated and the other is around breakeven or slightly in my direction then I would not hesitate to trade a third if it came my way. I would need at least two going my way and near completion with the third around breakeven or better to consider a fourth. If I had two trades going that simply were not cooperating then I would probably hesitate on the third and definitely not the fourth I am sure GW would say there is no reason to hesitate. If it passes all criteria and it is a trade then trade it. The bottom line is that I typically have around 12.5% to 30% out at any one time unless I am on the sidelines and allow myself the possibility to do another trade if the opportunity presents itself. Keeping the trade <=15% mark is also within my comfort level so that I do not hawk the option and allow the trade time to work. I found early on when I used 30% to 50% in any one trade I was too focused on the option regardless of the size of my basket. Any amount <=20% allow me to relax and anything <=15% allows me to do up to 3. The other reason I like to stay in the that 12.5% to 15% range is that if I typically have two trades going and we have a 9/11 type of an event then I can survive without too much damage to my trading capital. I can certainly understand the argument that it is a waste of capital just sitting there but it works for me.

NCT

GREED, GREED, GREED!!!!
I am pretty embarrassed to break down a stupid mistake I made based on being GREEDY AND EGOTISTICAL. One thing that is for sure, God has a place for those who "Get to big for their britches".

I am only sending this to hopefully help some of you who can be a bit impulsive-especially after a big win. I made a ton- I mean a ton of money on an AAPL trade. I was on cloud nine. I bought a few things, helped a family in need, and banked the rest. I felt like "I was the man". I had conquered the process of trading- especially Apple. Well, I lost it and had this "Thing" rear it's ugly head. I was confident I had better control of my emotions. I know some of you are like, "I did not think you had better control based on the way you act when you have a huge win-lol".

After exiting AAPL over a week ago, I had the unique idea that I would wait for it to blow off some of it's steam then dive back in for another big run. The talking heads were saying AAPL is going to $125. I barely looked at my charts. I had a point of entry, but did not wait until that level of resistance was broken. I definitely did not analyze any other indicators as closely as I should have. It was as clear as it is day that it was not time to do anything with Apple. That "Thing" had me. I pre-maturely and confidently bought a call position with a nice little load of money. I only bought out to Jan 2. Well, to make a long story short, I have not sold, but at this point, the position is freakin WORTHLESS!!! Look at the beating AAPL has taken. Not only did I make a bad decision, I also stayed in and prayed it would come back. I remember Gary talking about this. I broke every darn rule imaginable. When I knew a mistake was made and the stock was not going in the direction I expected within 7 hours, I could have gotten out and lost maybe 10% of the position. Again, the "Thing" had it's hold on me, and the "Thing" was talking to me, telling me, "It is coming back later today-or at the latest tomorrow morning. You know how AAPL pops in the mornings". Well, it popped the following mornings-POPPED AGAINST ME! I did not TRADE THE EVIDENCE. I have since prayed about it. Honestly, I have begged God to give me another chance and do not make me pay for being greedy to this degree. Every answer that is revealed to me and innate feeling tells me- NOT THIS TIME BIG GUY! See, God and I have been down this road before, and he allowed me to survive and live to see another day a couple of years ago. He knew I was young in this process and dumb. I know better now. I know how lack of discipline and focus can force bad decisions. Just know, I did not risk my entire basket or anything, but it was nearly 10% of it, so for me, that is PAINFUL! It has taken me a bit of time to come from behind this rock and come to terms with my mistake. Needless to say, my position is worthless now, so why would I sell? It can not get any worse, so I will hold until expiration Friday and pray I get at least a little piece of my pie back.

Please understand that none of us are perfect. Please do not go into this thinking that losing is not an option. Just manage and control the number of loses and dollar amount of your loses. You can technically have more losing trades than winning and still make big money each month. Just got to be disciplined and be able to identify when a stock has unexpectedly turned and has exceeded your loss tolerance.

Take time to bury the "Thing". That rascal is hard to kill. It has been revealed to me that this "Thing" can not be killed. He can be caged for ever, but not killed. The question is, who has the keys to my/your/our cage(s)? My cage door is wide open, and I have the keys in my hand. This "Thing" is awake, looking me in the eye, as if to say, "You got me in the cage, but can you close the door, lock it, and control my conniving ways of becoming free again.

Ha ha! You thought you were reading a Stephen King book for a minute. Good luck on trading. I miss you guys, and will continue to monitor and drop in here and there. I just wanted to vent a little!

I never post but this Rookie30 is a classic. He is my buddy and I miss reading his comments. We talk on occasion but this is truly a work of art. I have laughed and laughed. I expected this to happen after he killed it. Hope you all enjoyed his post as much as I have. Let's keep Rookie Posting.

Darcy2 I sure you and S/O are rolling over this one.

Merry Christmas to all those on this tread.

CZ

Oh Rookie...I feel your pain. I was like that. I'd make a bundle and lose most of it. Sometimes I would sell a loser only to have it turn around and within an hour after selling. "Errrr, I'd say. Why didn't I stay the course?"

Heck when I first started reading the charts my most used comments were "I didn't see that on the chart when I got in! or...I thought that candle was a gnat!"

I come here from time to time. I don't post as much though. This time of year always has me running crazy. I don't know there is something about the holidays that makes everyone come visiting at our house! I know it isn't my cooking. Oh my brother says it is because we aren't that far from the ski resorts.

Have a Merry Christmas all. Now back to the oven I hear sugar cookies calling me. Oh, the memories of gray sugar cookies formed by 4 year old little hands!



Edited 1 time(s). Last edit at 12/11/2014 05:44PM by Darcy2.