suriNotes

AAPL's Head and Shoulders pattern and its targets. Regards, Suri

Several years ago I read a book by Dr. Ned Gandevani "How To Become A Successful Trader: The Trading Personality Profile: Your Key to Maximizing Your Profit With Any System". In this book he addresses the problem of 'Why Can't You Pull The Trigger". I think it is important to figure out what type of trader you are and act accordingly. There is also a Trading Personality Profile test in the book, which identifies trader-types... He may have other services and books but I have only read the above book and recommended to others. Regards, Suri PS: I do not know Dr. Gandevani and never corresponded with him or his business.

CSCO's potential Wolfe Wave pattern... Regards, Suri

Hi Waveslider, Thanks for your post/comments. I am sure you already know I ONLY trade Patterns. I focus mainly from a broader perspective of looking if a Pattern is Reversal or Continuous first. I consider WolfeWave as a Reversal pattern. So, the rules for reversal patterns must fit into the pattern to confirm. As part of my reversal rules, I look for price-action within the pattern formation until it provides a trade-trigger or fails the pattern. This concept is part of my 'Market Context' analysis. I know every trader has (should have) their own theory of 'Market Context' in analyzing Patterns or Setups. When I am analyzing Stocks I look for patterns mainly in Daily Charts (at EOD) and look the first hour and the last hour price-action and see where and how price opened and where and how price closed. This Open/Close price-action must confirm underlying Pattern form, size and direction for the pattern to succeed. Looking at Daily Open/Closes raises 'Gap' theory. I do not trade GAPS but I like the GAP formations inside the pattern I am analyzing to confirm the validity of the pattern and direction. So, in a nut-shell, I like to see GAP Ups in a Bullish Pattern and vice-versa in Bearish Patterns. As part of this GAP theory, in a bullish pattern, if a bearish gap (downside) forms, I like to see it fill the SAME DAY. This confirms underlying Bullish Pattern and vice-versa for Bearish patterns. Case in point is: Recent SPX action from Sep. 2010. Most down-gaps are closed by EOD as the underlying strength is Bullish. Another commonly known theory of Bullish patterns is Prices must show Higher-Highs and Higher-Lows with price divergence in momentum based indicators (if any). Also, the inner patterns (Patterns within Patterns) and its price-action must be bullish. Here is an article I wrote on this topic ("Patterns within Patterns"), published Nov. 2010 in TRADERS' magazine. http://www.surinotes.com/Tradestation/articles/SuriDuddella_PatternsWithinPatterns_Nov2010.pdf Analysis of ISRG chart... In the ISRG pattern, the Wolfe Wave pattern is NOT quite visible for me until Dec.10th or so, as ISRG made lower-lows in its previous failed attempts to signal a bottom. But once ISRG made a higher-low on Dec. 17th (around $240, my first post on TL about ISRG WW), I thought it has a potential of WW and now I am interested to watch its price action to confirm a Reversal for me to trade. So, I look for HHs and HLs in the trends and most bearish PA failed within the setup. And many days I watched ISRG's Daily and First Hour and Last Hour Price-Action for a clear sign to trigger a trade. At this time there was a near-perfect ABC Bullish price-action (see my Chart) indicating both Wolfe Wave and ABC Setup. Finally, the signal came on Jan. 03, as ISRG Gapped Up and posted a wide-range bar (almost a Breakout) with a Higher-Low at $269. At this point, there are two things certain... It is bottomed out and it has ABC Bullish pattern and Wolfe-Wave pattern with bullish Gap/and potential Breakout from the consolidation. This Gap provides a key support area (for STOPs). Most days after that price-action was clearly evident. Now, setting up targets was easy as UpperTrendline of WW (almost coinciding with 200-SMA) around $300 along with ABC's (162%AB) target: $300. The stops are trailed after entry. On Jan. 20th, ISRG announced great earnings (with their strong da Vinci Robot sales) and ISRG gapped open $40+ to complete WW as it traded at a high of $334 on Jan. 21st. Regards, Suri ISRG analysis from Jan. 11, 2011.

ISRG's Wolfe Wave completed... Today up $41 to $331 above the WW Target (5) at $300 Regards, Suri

ISRG's Wolfe Wave Update... Regards, Suri

STRA (Strayer Education) also may be in Wolfe Wave. Potential W5 target near $100. Today it has Dead cat bounce after yesterday's $35 drop. Regards, Suri

ISRG Wolfe Wave update... Regards, Suri

I have read many psychology/motivation books which are not directly related to trading and I think they are great... Few books from my memory: 'Maxwell Maltz' books ...still have his book on Audio CDs. Recently I read a book "Confidence: How Winning Streaks and Losing Streaks Begin and End" by Rosabeth Moss Kanter, which is excellent. The Predictors: How a Band of Maverick Physicists Used Chaos Theory to Trade Their Way to a Fortune on Wall Street by Thomas Bass ... Fun read When Genius Failed: The Rise and Fall of Long Term Capital Management by Roger Lowenstein Who Moved My Cheese?: An Amazing Way to Deal with Change in Your Work and in Your Life by Spencer Johnson and Kenneth Blanchard.. Excellent book for every one. Regards, Suri

zdo has good book examples... I remember reading few books from that list. Few years ago, I liked this book "How to Become A Successful Trader" by Dr. Ned Gandevani. He profiles trader types using some tests.. I recommended this book to few of my friends... some hated it and some liked it. I liked it and thought it had practical ideas. I also know Dr. Gandevani has new books but I have not read them. Regards, Suri

Hi, Sorry to disappoint you but 5K is very small amount to DayTrade Stocks. You do need at least initial capital of $25K to get 4x margin and avoid the Pattern Day Trader Status. I do NOT daytrade Stocks as it is not worth the reward/risk ratios it offers for the effort (for me). I like SwingTrading Stocks and think there is much more money to be made in Swing Trading Stocks using 1-5 days or more holding periods or through Options. I DO daytrade Emini Futures and think it is NOT worth SwingTrading Futures for the risk it involves. But when I did daytrade Stocks few years ago, I traded stocks which are liquid stocks (at least 1M shares of 10-day Avg. Volume), have good range (Stocks which moved at least $1 avg. 21-day range) and high-beta stocks (min. 1. or 1.5). Do your daily research and make a small list of stocks to trade. Trade stocks based on Patterns/Setups and avoid Event Based Stocks (Earnings, Upgrades/DownGrades, News, Rumors, Gaps, Tips etc.). Also, you have to know the list of stocks, setups with their Entries/Exits you going to trade/watch before the Opening Bell... Here is the Scan in TradeStation with the above criteria from NASDAQ stocks >$10. Good luck and Happy Holidays!!! Regards, Suri

I like Dr. Ari Kiev's books. They are more practical and offer great insight into the traders Psychology. I also like Rooth Barrons Roosvelt and Dr. Steenbarger books and his Blog. Regards, Suri

Here is ISRG chart with potential WW marked. Regards, Suri

*** This is a response I posted to a user in another forum to a similar question ** Hi MM, Thanks for your question. I have been trading X5-Harmonic Patterns (ABCs, Gartleys..) and other Geometric Patterns (Triangles, Rect. Channels etc..) all my trading career of 15+ yrs. Complex patterns like Harmonic Patterns are difficult to detect with naked eye (at least the proper ones which follow their rules) and even more difficult to code/backtest. Building rules to trade patterns successfully is another challenge. The reliability of any pattern or indicator is subject to it's structure, market phase, type of filters applied and user's experience... I would rate Harmonic Patterns as the 50-60% reliable overall but with the right market context (filters, phases), I would think their reliability increases to 70-75%. There are other patterns which may be little more reliable than X5 patterns, but Harmonic patterns are my bread-butter setups. Also note there are NO perfect patterns and all patterns fail. I have built my own theory of Market Context and other supporting tools with filtering mechanisms to trade them when opportunities present. Harmonic patterns are also part of many other patterns like simple H&S, DB/DT, Triangles and Complex patterns like Wolfe Waves and Elliott Waves. Harmonic patterns appear in all instruments and in all time-frames. This is at least my nth generation algorithm (wrote from scratch each time) I am attempting to write X5 (all Gartley variations) patterns in the last 5-6 years. I think this time I may have the best algorithm. Once I complete I will attempt to write more filter logic. I wrote Auto ABC Pattern detection few years ago and currently I use it for my trading (intraday and EOD). The key is to detect these patterns with absolutely no-delays. Now I have achieved that with both ABC and X5 Harmonic algorithms. They also generate auto Entry, Stop and Target levels for each setup. Hope I answered your question. HAPPY HOLIDAYS!!! Regards, Suri