CHFS broke out and came

    Posted by mrjasongill on 7th of Jul 2020 at 10:13 am

    CHFS broke out and came back inside the pattern.  BBX pulling back to the 9 EMA...might be a good time to pick up with tight stop.

    make sure you trade a

    Posted by matt on 7th of Jul 2020 at 10:58 am

    make sure you trade a variety of the ideas, don't just trade those low priced ones like CHFS as they are very wippy and volatile, make sure to trade some of the other much higher priced names, which we have a variety anywhere from $10 to $75, all the way up over $1000.  

    some folks try only trading the small sub $5 stocks and don't do well because they are trickier and more volatile - so my suggestion is to focus more trading on the larger names and play these micros with smaller size

    otherwise the chart pattern is fine, again these are volatile esp a 50 cent stock, it's 50 cents for a reason

    CHFS ended up breaking back

    Posted by mrjasongill on 7th of Jul 2020 at 02:30 pm

    CHFS ended up breaking back above the pattern and is up 10% now! haha....your point exactly...so would you have bought it on the original break and had your stop at the previous day close?

    so regarding your question on

    Posted by matt on 7th of Jul 2020 at 02:56 pm

    so regarding your question on CHFS I don't like saying this because some folks get angry at me but I bought it last night in after hrs when I was doing the newsletter. I saw that the spread between the bid/ask was tight and I saw an opportunity to just buy some.  Realize I would have bought it yesterday during the trading hrs had I seen it, but I only saw it yesterday about 6 pm after I ran my scans. Steve and I both trade stock after hrs and pre market when see see opportunities. I know Steve does a lot of pre market trading.  This morning I bought some more today on the morning break, however I greatly added and bought more around noon after it pulled back and started moving with strong volume - check out a 5 min chart you can see how volume started pumping into it mid day after it came out of that base

    the attached image shows a 5 min chart

    Thanks for sharing that video

    Posted by mrjasongill on 8th of Jul 2020 at 01:58 am

    Thanks for sharing that video today....that one is great.  I'll email you this excel file i was messing with that might be useful for the members

    How do you decide how

    Posted by disciple33 on 7th of Jul 2020 at 03:08 pm

    How do you decide how much of a small stock like CHFS to buy (so as not to get stuck if it goes the wrong way)?

    EASY - read this post

    Posted by matt on 7th of Jul 2020 at 03:11 pm

    EASY - read this post from the past and watch the video I made regarding position sizing

    https://breakpointtrades.com/blog/post/287115/

    so basically determine your stops

    Posted by matt on 7th of Jul 2020 at 03:20 pm

    so basically determine your stops based on the chart, not your account.  Decide how much you are comfortable risking for a trade, is it $200, or $500 per trade? that's up to you, then with that amount you are willing to risk, see where your trade entry will be and your initial stop, then use the difference and based on what you want to risk in order to calculate the number of shares you buy!  

    for example if I see a trade idea where I'm entering at $50 and I see on the chart that I need a stop at 47, and I'm willing to risk $250 then I would need to buy 83 shares.  

    again watch the video, you determine your number of shares by how much you are willing to risk/lose on a trade based on where your initial stop should go.  

    many people do this the opposite way, they buy shares and then set a stop based on a dollar amount, which may be too wide or too tight.

    A lot of brokers have

    Posted by jtsurfah on 7th of Jul 2020 at 04:51 pm

    A lot of brokers have  portfolio rebalancing tools these days. But don't think of it as just for rebalancing. Plug in a ticker, plug in the target percentage (as a % of total account) and hit the create rebalance orders button.  No need to think about number of shares, dollar values, etc, etc. I love the one at Interactive Brokers - only downside is that it doesn't work well for option spreads (I use it for everything else).  I will often enter a position at 1.5% increase to 3% on weakness, potentially scale up to around 5% if it falls down near my stop price (typically a support area) and then scale out the same way (if I don't get stopped out). 

    jtsurfah: Here's one I use

    Posted by brophy on 7th of Jul 2020 at 05:19 pm

    jtsurfah: Here's one I use for my options spread. I don;t trade very big size, other than SPX, This is for my stocks. I enter the credit i receive on my credit spread and it gives me the # of spreads I should trade.

    Thanks! I'm starting to work

    Posted by jtsurfah on 7th of Jul 2020 at 05:42 pm

    Thanks! I'm starting to work on my Interactive Brokers Python API.  Something like this shouldn't be too hard to program in along with live data and order execution. VectorVest seems expensive. Which of their products does this tool come with?  I'm guessing that even if I can't pull it off myself (this I can), I could get a developer to build this out for me for less than VV's subscription cost. 

    Matt,  that's important, risking only

    Posted by disciple33 on 7th of Jul 2020 at 03:49 pm

    Matt,  that's important, risking only as much as you should per your account size. I was referring to the liquidity aspect. You could probably put $100k on a trade, but I'm guessing you would not try that size on a small stock like CHFS. How do you determine your position size when liquidity is the limiting factor?

    guys I want to re-iterate

    Posted by matt on 9th of Jul 2020 at 10:46 am

    guys I want to re-iterate I'm stretched thin here with posting on the trading community, answer emails, trying to trade 4 different accounts, etc, the analogy fits I'm too little butter stretched over too much toast.  The point is I'll miss seeing quite a few posts, I'm trying to be better at reviewing them but I do miss posts so if you ask me a question and I don't answer it, it's 99.99% because I didn't see it, I didn't ignore it. If it's very important send me a pm

    as far as this liquidity question regarding a very thin stock - again my trade position size video was NOT about a set dollar amount per trade like $100K, it was about how much do you want to risk on the trade, is it $200, or $500, that determines your position size,  not a set $100K or $20Kinto each trade.  On CHFS a stop would have been been 8 - 10 cents, so told you if you were willing to risk $300 then you would buy 3700 - 4000 shares, Nothing to do with a set dollar amount into a trade like you asked.  

    Also of course the liquidity and volatile of the stock matters, if it's a 50 cent stock am I going to put less capital in that than I am a $50 stock, of course.  It's common sense and there's no one set forumula that says that you put X amount in this priced stock and Y in a smaller stock - there's are common sense things that are going to vary and something you just have to decide for yourself - if the spread is wide on a small stock - then I wouldn't place a lot into it.  

    again my example was as a general guide

    on CHFS  -would I put $100K into that?  The pattern the stop was about 8 cents or so  - so if one wanted to risk $300 they buy 3700 shares. Again it's not about $100K, it's about your risk. 

    also on CHFS it broke out gave a nice trade on a stock like that at minimum I'd be selling a bunch on the first move because it's  cheap stock. yes it's pulled back the last 2 days but it's just noise in fact price re-tested the broken trendline today and held that so far.  here's a couple charts, first the daily and a 60 min,  on the 60 min you can see where your stops would have been and then raised - and why not take some good size off on that first move up just because it's a cheap high risk stock? Now on this pullback it's found support so still looks okay, maybe a stop could be raised to that 0.52 cent area now on remaining shares

    so on CHFS - if

    Posted by matt on 9th of Jul 2020 at 10:50 am

    so on CHFS - if you were willing to risk $300 on that stock, then based on the stop you would only be buying 3700 - 4000 shares, which is around $2000 - $2200 investment of capital!  

    again suggest you re watch my video - it had nothing to do with placing a set amount into each trade like $20,000 or $100,000 for example. It has to do with how much you are willing to risk, is it $200, is it $500, whatever - that sets  your trade size and capital size - your capital size is not setting that. and obviously you can consider things like liquidity etc

    one last comment about CHFS

    Posted by matt on 10th of Jul 2020 at 10:07 am

    one last comment about CHFS as someone asked me how do you determine what amount to put into low priced stocks like CHFS.  Again it's not about dollar amount it's about what you are willing to risk.  The person used $100,000 for example. Well using my stop example on CHFS assuming you used a 9 cent initial stop:  and $100,000 would buy roughly 200,000 shares - if that 9 cent stop was hit you would be looking at a -$18,000 you are risking!! Are you wililng to risk $18K to $20K on a 50 cent stock if you are wrong and your stop is hit?  Hell no!  Again it's common sense guys - how much are you willing to gamble on a trade - that's what sets your shares and dollar amount you put into it. You don't use an arbitrary dollar amount like $100K for each trade you do - the dollar amount is set by your stop relative to your entry price and how much you would lose if your stop is hit.

    yes clearly going to matter

    Posted by matt on 7th of Jul 2020 at 03:51 pm

    yes clearly going to matter how liquid the stock is etc and if it's supper cheap price you are going to just want to put less capital in it.  

    again that gold blog post review is good for newer folks

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