ACAD bull set-up example

8 בינו׳ 2018

Playing Trading Simulator Game:

Learning about Stochastic Oscillators.
In October/November the stock closed with lower highs while the corresponding Stochastic Oscillator displayed higher highs. This is called a bull set-up and means the price will rise soon.
On 14NOV17 the Stochastic Oscillator had a crossover giving us a weak buy signal.
On 24NOV17 it climbed above 20 which is also a weak buy signal.

The literature says a buy signal is generated when the stochastic line crosses the 50, but on some charts it looks like that signal comes too late to make a good trade. This requires more study.

10 בינו׳ 2018

הערה

Trading Example:
Looked at 5JAN18 chart position, was near bottom of trend line I drew in. Anticipated that stochastic would crossover next day and show a buy signal. On 8JAN18 bought 3000 shares at $28.60.
Got nervous because price was dropping. Bought 6000 shares at $27.74 in order to dilute my average buy price. Average price became $28.03.
Got more nervous because price kept dropping. Bought another 3000 shares at $27.60 in order to dilute my average buy price. Average price became $27.92.

The next day, 9JAN18, ready to get rid of this position. The price rose. Wanted to grab a piece of the gains. Sold 6000 shares at $28.37. A gain of $2700.
Price continued to rise. Decided to sell with a trailing stop of 5 cents. Trade was executed at $28.49. A gain of $3420.

On 9JAN18, the stock closed at $28.29. If I had stopped working with this stock after the first purchase, I'd be holding 3000 shares, that would have lost $930 in value. Instead I gained an overall profit of $6120.