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FlashPoint

6,271 Posts.

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13/04/23

10:54

Post #: 67252173
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Originally posted by Rooster100: ↑

Hi mate, ask as many questions as you like- when we’re not bickering or abusing each other we can learn a few things from each other as well! I know you asked a simple question, but here’s some extra detail to add to the last post. There’s not actually a lot of discussion around the threads on how TA can be used to manage a trade or position which is a shame I think because there is a lot to it and many different approaches that work.Bulkowski reckons that trading this pattern has a greater success rate with an entry after price closes above the breakout level, so the green light for entry has appeared and it’s game on. The pattern/trade will fail if price gets below the bottom of the flag, so a stop loss level of $2.54 which is 1c below the low of the flag, means at an entry price of $2.72, the risk is 6.6%. For a stock that moves around like LTR, anything up to about 10% is pretty good I think. An entry a few cents higher or lower will move the risk up or down because the stop loss level will not change, so that’s what you’re dealing with. A nicely structured pattern like this provides you with a clearly defined cost if it doesn’t work out, so you can size the entry to suit the risk you want to take.Yesterday's breakout bar was not especially strong and on average volume, so it would not surprise if price goes back to re-test in to the range of the flag, so after an initial entry there could be an opportunity for another entry at a lower level. Buying as price drops towards your stop is a bit scary at first, but it's a trick I picked up from some mad Italian forex trader in a podcast. If your stop is based on a clear level that means the trade/pattern is busted anyway, then it can give you another entry with a very small risk and reduce the average buy price of the trade. If price continues down, then you're out but for a much lower cost. For example I’ve selected the highest traded price of the flag of $2.60 as the lower entry point and the stop stays at $2.54 which is a 2.3% risk on that entry.If price starts to move up, then the chart can also guide when and where to raise the stop to or take some profit to protect the trade or get out entirely. Lots of approaches here depending on what you are trying to do. I typically wait for price to put in a pivot high and then settle on a pullback level before moving the stop up to just underneath the pullback level, while adding some more during the pullback, however some will aggressively raise the stop to break-even or put a trailing stop on as soon as price has hit a specific level. It also depends on whether you are using the pattern trade to add more to a longer term position, or a simple all in, all out trade to try and capture most of whatever the up-move turns out to be.

Do with this what you will! Good luck all, Rooster.

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FWIW, may I just add that all of the above pretty much depends on the chart pattern having been identified correctly, which personally I'm not convinced it has been. However as you mentioned we can all learn from that.

I, in turn have mentioned the TED, which is a completely different beast, so IMCO DYOR it is very important to mention at this stage. Personally I prefer for Mr Market to confirm an idea before acting on it. Could be a bit conservative and the margins might be smaller, but usually it is the safer way of going about it!

Last edited by FlashPoint: 13/04/23

LTR Price at posting: $2.71 Sentiment: Buy Disclosure: Held
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Add LTR (ASX) to my watchlist

(20min delay)
Last 86.3¢		Change -0.013(1.43%)		Mkt cap ! $2.061B

Open	High	Low	Value	Volume
85.0¢	87.0¢	83.5¢	$8.066M	9.482M

Buyers (Bids)

No.	Vol.	Price($)
38	119908	86.0¢

Sellers (Offers)

Price($)	Vol.	No.
86.5¢	54769	19

View Market Depth

No.	Vol.	Price($)
40	121720	0.860
14	288916	0.855
14	265504	0.850
8	118598	0.845
10	275263	0.840

Price($)	Vol.	No.
0.865	53666	19
0.870	515166	32
0.875	552033	14
0.880	423571	11
0.885	218889	7

Last trade - 14.40pm 13/11/2024 (20 minute delay)

LTR (ASX) Chart

New TA/Charting, page-12439

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