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Strategies & Market Trends : Strictly Buy and Sell Set Ups -- Ignore unavailable to you. Want to Upgrade?

To: Bob V who wrote (3096)	4/4/2005 5:40:05 PM
From: chowder	Respond to of 13449

Bob, Commissions are not calculated in the results I post each month. I have 3 basic patterns I favor and I can reverse them for going short. My favorite pattern is the 3-5 bar drop off a recent high into support. This pattern is the only one to date which has provided double digit returns in less than 5 days. Another pattern I use is the cup and handle, where price is breaking out to a new high on the 3rd triple top pattern. They don't come along that frequently but when they do, they are very explosive due to the nature of breaking long term resistance. My third pattern, which is the least explosive, but more frequently seen, is the continuation pattern. It's where price will consolidate under or over a support or resistance level, and then make a move. The price will usually continue in the direction of the trend that preceded the consolidation. The number of stocks I trade varies according to market conditions. I don't think I have been more than 40% invested at any time in 2005. Toward the end of August 2004, I was 100% invested and on margin. Market conditions will determine where I stand with the number of open positions. Sometimes, when I'm fully invested, I may not have increased the number of equities owned, sometimes I will hold larger positions. Again, the end of August 04 saw me with 10% of my portfolio per position as opposed to 5% now. My scans are set up to include about 5000 stocks. They are set up to recognize the patterns I favor to trade. If I were to point out a weakness in my trading plan, I would have to say it is in the area of trying to base my results off an index. My goal is to outperform the S&P 500 and sometimes I will close a position or not give it enough room to explode because, I'm looking at the shorter term picture. I may close a successful trade because it locks me in with a performance that is beating the markets. I think I need to look more at absolute returns as opposed to index based returns, but I haven't come up with a plan yet that will allow me to feel more comfortable with the additional risk or volatility involved. I would prefer to do it from the long side and not the short, and the market isn't providing the type of environment for me to go for absolute returns as opposed to index based returns at this time. I suppose if I were to nit-pick, I could find additional areas that need work, but I don't wish to nit-pick my results at this point. My more recent trades are doing much better than the first 2/3's of March and I think that is a result of looking for stronger technicals. I was taking marginal plays through most of March and started looking for more strength toward the end of March. The stocks carrying over from March are looking very good. I didn't have any flat trades in March, but I had a few that finished nearly flat. They were 0.1% to the upside or downside. I also had a trade or two that would have finished flat if held another day and I closed it a day early, thinking the stop would hit the next day, and it did. So, I got a 1/10th of a percentage point more in profit. dabum