My TA Patterns...
Pre stock selection, real time filter, the right environment (network momentum), industry group momentum + TA on the weekly and hourly (somehow the daily messes up my brain completly)...
This post is for documenting the momentum, breakout trading R&D (as I define it on the hourly).
Took a while, but I am getting some traction! I know: lot of stuff in one post, but I want to post a holistic view that does not left out important things.
So I cover pre stock selection, real time filter, the right environment (network momentum), industry group momentum + the weekly and hourly (somehow the daily messes up my brain completly) setup.
I read a ton of TA Books, I all put them aside and defined my own rules (which now look much like the TA Book stuff, lol), but I had to define them by myself, so I can spot them (TA Book setups never made sense to me in the heat of the battle).
For that I looked at 10.000s (or so) of charts and customzied the TC2000 charts for my (!) eyes.
First of all, for stock selection I am using the following screens:
From what I see so far, preselection (fundamentals and technical) of the stocks you watch is very important: my best guess (I do not have the statistics long enough to prove it and yes it depends on the market environment): at the very least I want stocks that have improving earnings per share estimates, they can be trashy (e.g. have negative earnings, Rate of change up is the thing that matters here) as hell, but analysts need to upgrade them in terms of their earnings per share estimates. From what I saw so far (again still running the stats), those stocks “behave well” in terms of my risk preference.
The ranking system of the second screen is proprietary, but you can use the “Small and Micro Cap Focus” Ranking system (it also works and mid and big caps, if you want nullify the market cap stuff), it comes out the box with P123.
Those stocks move slower, and everybody knows they have good fundamentals, so not as much as convexity like in the first screen. But (!!!) they can be also great movers, if the industry group was neglected for months and now shows momentum.
Also if you get a GOAT big cap stock like NVDA or AMZN in the screen, pay attention, those big caps rarely get very high fundamental rankings, this is significant bullish (NFLX and APP (before the breakout, I just missed it ;-)) is in the above screen, META and NVDA was in it in 2023 pretty early on!).
+ the positions of that following system (mid and big caps, Russel 3000 Universe, growthy and yes, some higher beta (but not too high) is in play too!).
Now I copy the stocks from the screens and system(s) to TC2000 in different buckets…
[on the far left —> Industries with shorter term (!) momentum and relative strength —> best breakout stocks come from those Industries]
…and filter them real-time out with this real time screen:
((H - L + ABS(H - C1) + ABS(C1 - L)) / 2)*.9 >
(AVGH10.1 - AVGL10.1) / 2
+
(ABS(H1 - C2) + ABS(C2 - L1) +
ABS(H2 - C3) + ABS(C3 - L2) +
ABS(H3 - C4) + ABS(C4 - L3) +
ABS(H4 - C5) + ABS(C5 - L4) +
ABS(H5 - C6) + ABS(C6 - L5) +
ABS(H6 - C7) + ABS(C7 - L6) +
ABS(H7 - C8) + ABS(C8 - L7) +
ABS(H8 - C9) + ABS(C9 - L8) +
ABS(H9 - C10) + ABS(C10 - L9) +
ABS(H10 - C11) + ABS(C11 - L10)) / 20
and V > AVGV.10
_____________________________________________________________________
Now, before I put on breakout positions the environment must be right:
In general, I want to see network momentum be in the Quad 1-2 bucket, if in Quad 3 or 4, limit the breakout to those Quad 3 or 4 exposures (with smaller position sizes!):
Here is the filter I use (it is now based on daily network momentum, not weekly network momentum, also I look at the daily Rate of change, I might be risk on if Quad 1-2 is still in minority, but has positive ROC momentum, e.g. more Quad 1-2 exposures pop up than yesterday…):
Quad 1 exposures (in the Quad 1 Bucket)
iX2450
SVIX
KRE
XLF
iX2470
GBTC
SX30
QQQ
SX100
T2108
IXCO-X
NYFANG
RSP
IWM
iX2320
SX20
SX110
iX2270
ARKK
iX1020
iX1240
iX2380
iX2340
iX2330
iX2480
iX2370
iX2440
iX1170
IWC
Quad 2 positions:
iX2270
KWEB
SVIX
EUR/USD
IXCO-X
iX1080
GBTC
iX1130
SX30
PSCI
QQQ
NYFANG
iX1170
SX100
IWM
T2108
SX20
SX110
iX2470
iX2450
iX2440
iX2370
iX2480
iX2330
iX2340
iX2380
iX1240
iX1020
ARKK
iX2320
IWC
Quad 3 positions:
iX1050
SARK
SX10
RSP
iX1090
ZUQ.TO
iX1840
T2127
RWM
BRKB
URA
OIH
iX2030
UUP
IRX--X
SPBIO.X
SPXPV
TNX--X
XMI
T2108
T2104
T2100
SX90
iX1110
USO
XLE
iX1010
iX2260
XLU
SHY
Quad 4 positions:
iX1740
iX1730
XMI
T2104
T2100
T2127
XLP
IXR
PSQ
RWM
XLU
iX1100
SX50
VIXY
UUP
GLD
TLT
iX2290
iX1830
iX1770
iX1850
SX70
XLV
+ I love the GEX!
Basically, I try to spot divergences (Market down, GEX up would be a buy signal, Market up slightly, GEX up much as well and the other way around).
Quads + GEX —> defines risk on (take breakouts) or risk off (sit tight, manage positions).
Now the pattern comes in.
I want to see this:
Blue line support on the weekly: I only choose stocks that hold the last major breakout bar (the low of it!).
The closer we are to the last blue bar weekly support, the more interested I am (e.g. I am buying mostly in a weekly pullback, if the environment is really strong + the base is 4 weeks long, I also consider typical breakouts above daily and weekly pivots. But let’s just say, I rather buy before “traditional” TA pivots.)
On IAG hourly —> (on the day I took it, Gold / Silver were the strongest industry groups).
I want to see blue bar support on the hourly:
Sell rules —> Stop loss is the low of the blue breakout candle and I move it up based on blue bar support…, position size is based on the stop loss I can put on, the higher the % of the stop loss, the lower my position (10% position on a 3% stop loss for example).
Here is the chart template: https://www.tc2000.com/~zJaV2C
The whole setup in TC2000 looks like this: https://www.tc2000.com/~4JBn9Z (template)
The template for the Quads looks like this: https://www.tc2000.com/~TwLGbo
(you must copy the Quad exposures to the corresponding Quad baskets, TC2000 does not copy them for you in the template).
That is it ;-)
All the best and best regards
Andreas
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