thanks for the kind words dg and tweets.....i always read the charts forum, even if i do not post (and i believe many others do the same)...keep up the good work guys, there is always an audience!
now seeing as nambo found interest in the trading aspect of my charts (entries/stops etc), i thought i would put together a possible trade plan and post it for your perusal
upfront disclosure: i hold stock in the following company
A Plan in Pretty Pictures TXN - Daily
here we see a long-term uptrend in place....yellow arrows show the repeating range, and what we are looking to do with this trade plan is to capture some of the next move (if it happens) approximated by the green arrow
TXN - Levels and Numbers
ENTRY here i have highlighted the key levels that will be a part of this plan....notice that the yellow lines highlight where the stock has been ranging since the beginning of May....we are aiming to enter towards the low of this range, where there is a high probability that price will then move upwards....you cannot predict the future with charting, but you can identify high probability areas to trade in
our ideal entry is 68c...in practice, anything up to 69c would be suitable
GOLDEN RULE never take an entry unless you know where your stop will be....your stop location is more important than your targets
STOP here i have shown the stop level in red, half a cent below the previous low....if price breaks lower than the previous low then our trade plan tells us to get out of the trade completely
our stop level is 63.5c....never move a stop any lower once it is decided, you can of course move it up as the trade goes in your favour :)
TARGETS i have nominated two logical targets to take profits at....the first is at the top yellow line, which signifies the top of the recent ranging activity....here we will take 50% of our profit
our target R1 is 76c
once the first target is reached, we would move our stops up to our entry level at 68c...then, if price moves back down against the trade direction, we will get out of the trade with our 50% profit in place, and will not lose capital on the trade - a good result!
the second target is at the previous high, which coincides with the approximate range completion showed by the green arrow earlier....here we will close out the other 50% of our position
our target R2 is 96.5c
RISK entry = 68c stop = 63.5c risk = 4.5c or 6.6%
REWARD 1 entry = 68c target R1 = 76c reward = 8c or 11.8% reward:risk ratio = 1.78
REWARD 2 (looked at individually) entry = 68c target R2 = 96.5c reward = 28.5c or 41.9% reward:risk ratio = 6.33
combined reward:risk ratio = 4.06
note, the combined ratio is calculated by selling 50% of your position at each target.....it does not take into account moving your stops to breakeven after achieving the first target (its too early and im not on my usual computer)....this would result in a higher reward:risk ratio being calculated - even better!
and there we have it, a possible trade plan! let me know if you have any comments, am always happy to explain anything
