Trading U.K stock market using Mark Minervini strategy
Mark has been interviewed by Stocko a couple of times and from some of the comments on various threads there appears to be a few of us using his methods to trade the U.K stock market. I thought it would be useful to have a dedicated thread where we can discuss how well its working.
Personally I have been in cash at least 50% since the end of May and at 95-100% since early October. Getting out of stocks as they roll over has protected me from any real damage.
I'm struggling to find many setups I want to buy so I am developing my "sit out power"
How is everyone else doing?
Disclaimer
This is not financial advice. Our content is intended to be used and must be used for information and education purposes only. Please read our disclaimer and terms and conditions to understand our obligations.
1,516 comments
Minervini interview released today:
sam19, unwise2,herbie47, a big thanks for all your kind advice on the post I put out a while ago. I've been working 24/7 to optimise a Minervini style trading strategy, and I'm making good progress. I gave up with the UK, it was death by a million paper cuts, spreads and the 1% IG fx ISA charge meant that it was very expensive to get out of trades quickly when I was wrong (which I have often been, as I'm still learning). Using IB/Trade Station with USD has meant I can get in and out of stocks quick and keep really tight SLs. Marketsmith has been invaluable in stock selection, and the auto pattern recognition features have trained my eye quickly on chart patterns. I've watched all the videos on Richard Moglen's youtube channel (massive thanks for the tip!) and my learning curve accelerated overnight (he is interviewing Minervini this weekend!!!). I've tried to stick with Minervini stock selections and trading breakouts, but have been slammed over and over in the current US market. Although from Minervini's tweets it's clear he is not following his books, and is trading anything regardless of fundamentals, but is flipping it quick for a small profit. My understanding is that his traditional system in his books is suited to a healthy market, but when it's whipsawing, or he's in a competition, he ignores fundamentals/industry/RS, and trades any name as long as it is one of his chart patterns (bit like he does with PowerPlays), but sells out quick. It has been very confusing to read his books and then see him do the opposite, but the penny dropped when I understood he adapts his method depending on market conditions. Even though I haven't made any money this year yet I'm getting very good at controlling risk, and I think once the market is conducive to this style, it will work. I think my aim going forward will be to try and develop a hybrid strategy where I can also swing trade lower grade names, and position trade better quality names for longer term moves. Failing that, I'll put all my money into Shitecoin. My friend sent me a screen shot of his crypto account balance tonight, I nearly fell off my chair! Anyway, a big thanks again guys for pointing me in the right direction!
Thanks for that really interesting post Corringham. Yes, I've been following Minervini on Twitter and it's quite a revelation. The textbook has gone out of the window. Basically he seems to be using chart pattern recognition and high leverage (a sort of modified Dan Zanger approach). For short term holds, the fundamentals don't matter as the price moves are determined mainly by market expectations. I suspect he uses fundamentals when advising his clients (although his definition of fundamentals is very EPS focussed and more or less ignores things like PE ratios and Book Values). Like you, I now trade the US market virtually exclusively. And I use spread bets rather than a conventional account as it seems to be the cheapest way of trading (no FX charges, no commission, no taxes, and for US stocks, very small spreads usually in the 0.1-0.3% range).
Thanks for sharing Wilkonz! That's really interesting re spread bets as I thought the commission/spread would be an issue but at 0.1-0.3% it's what I'm getting owning shares directly. Once my trading improves to the point where I'm maxing out my CGT allowance, and once I've got at least a full year of positive results, my plan would be to use IG spread bets and very cautiously leverage up gradually. With spread betting I do also really like that you're not taking fx risk on the position as you're betting £ on SP movement. Thanks again for sharing!
That's a good point Corringham - there's no FX risk on spread bets. Especially in view of the fact that the USD has weakened from $1.24 to $1.38 against the GBP over the last few months - which means that US shares in a conventional account would have lost around 10% of their currency value in that time for UK investors. It might be an idea to open up an IG demo account for spread bets to get an idea of how it works before you go live. As a word of caution I lost significant amounts of money spread betting for the first two years until I worked out a strategy that was right for me. Now it's a useful source of tax free income. It requires a totally different mindset from conventional investing / trading, although the basic skills remain the same. It's also worth remembering that daily funded spread bets on IG are charged at around 2.5% interest per annum on the nominal amount, although this falls to 1.6% per annum for long term spread bets. (If you bet long term on mega caps like GOOGL the annual interest rate is only about 0.15% which compares favourably with the HL ISA annual charge of 0.45%.)
HL fee is capped at £45 per annum on shares, so is less if you hold over £10k in your ISA.
I may start a spreadbet account as my ISA is getting full up.
Herbie. You're absolutely right. The cap applies to shares, overseas shares, investment trusts, ETFs, VCTs, gilts and bonds. It does not apply to mutual funds. Good luck with the 'spread ISA'. For what it's worth, IG allows 3 separate spread betting accounts for each investor. I use two for trading and one as my 'spread ISA'. Another benefit of the spread betting accounts is that you get paid your dividends on the ex-dividend date so you don't have to wait the usual month or so (with a 15-30% tax deduction for US shares).
Thanks Wilkonz, makes a lot of sense, I'll definitely approach with caution, I'll play with a demo first for sure! The more I think about it the FX risk is a concern with my current setup!
Good to hear you're on the right track. Have you been using radar screen in TradeStation? I found it really helpful for scanning in real time for stocks breaking out. I've coded a couple of set ups in EasyLanguage that I can email you if you want them.
I realised this week looking at my statements that TS charge non US residents $5 a trade which isn't much but I've been trading quite a lot lately so I'm in the process of moving to IBKR and now use TC2000 for scanning (I think Richard Moglen is a big fan of TC2000).
Hi Sam19, I've literally only just started using TS, initially I'm getting a little annoyed, their site said that given I'm from the UK I needed their TS Global product. Turns out a lot of the functionality around bracket orders and TradingView integration is disabled in the Global product. I've setup the radar, but again the screening functionality is watered down in the Global version. Are you using a TS normal product or the Global version that runs off an IB account? I haven't seen a $5 fee, trades I placed last week were $1.5 a go. Thank you for the offer of EasyLanguage setups, I'll take a look at the platform and check that feature hasn't been disabled also! I have a free trial of TradingView going at the moment, nice clean charts help with identifying patterns, but not sure about the alerts setup. I've seen a lot of the US top traders are using TC2000, would be interested to get your views on it! And thanks also for parting with your knowledge, really appreciate it!
I had the normal TS account integrated with Trading View. I had a seamless process in place scanning for set ups on RadarScreen then charting/placing trades on TV. TS website says zero commissions but I guess I didn't read the small print.
Its early days with TC2000 but once you figure out how to write formulas the scanning is great at helping me find and enter trades early.
For example you could create a WL on stockopedia of stocks with strong fundamentals and put those stocks through a scan on TC that would alert you when a stock is breaking out of X number of bars high or say volume over 9million.
I think if you hold out from signing up to TV they offer a pretty good discount towards the end of the trial period. Off the top of my head I paid $170 instead of $300. If not let me know and I have a code for $30 off. Thanks for the minervini interview link I'll watch that this evening.
That makes sense then re TS, I recon I'll check TC2000 out then before I commit to TV (thanks for the offer of the discount code!), I like the idea of being able to upload a watchlist and configure breakout triggers that have volume!
My understanding is that his traditional system in his books is suited to a healthy market, but when it's whipsawing, or he's in a competition, he ignores fundamentals/industry/RS, and trades any name as long as it is one of his chart patterns (bit like he does with PowerPlays), but sells out quick. It has been very confusing to read his books and then see him do the opposite.
Under normal circumstances Mark waits for what he calls an "easy dollar" market before he gets fully invested in his normal swing trades. He has said many times on MPA that this type of environment exists for approx 25% of the time. Usually in a whipsaw/"hard penny" market Mark would be only taking small/pilot buys to test the market for a change in behaviour.
The combination of being in a competion and Mark noticing very short term "pops" in setups that then typically fall back has resulted in a change of tactics. Mark Richie has joined the team at MPA and he isn't trading like Mark, he is waiting for a better market for swing trades before getting aggressive.
Thanks unwise2, makes perfect sense, in his latest interview that I posted below he said exactly this. Thanks for taking the time to explain!
When the subject of Mark has come up on other discussion threads there have been posters who have questioned Mark's true trading ability and suggested he might have got lucky in the 1990's over a few years. Mark has entered the U.S investing championship this year in the $1 million plus category (Mark has said on his MPA service that the account he is trading is multi million, not one). After 3 months he is leading by a large margin with a return of 111%.
The stock division only requires $20,000 so the returns are likely to be greater.
It has now been 4 years since I started using Marks method in the U.K. Although I have beaten all the main U.K indexes and the 80-100 Stockrank performance over those 4 years I don't think it's possible to achieve anywhere near the returns you could make in the U.S. The issue is the number of available liquid stocks to trade. Mark turns over an edge as many times as possible to compound returns. The U.K limits this in 3 ways, number of shares with reasonable spread, the number of breakouts in a given time period and the number of shares that trade enough volume daily to allow you to take a meaningful position.
According to Stocko there are currently approx 400 shares in the U.K with a spread of 0.5% or less, in the U.S it's over 3700.
Warpaint London (LON:W7L) is a classic example of the problems faced by a U.K trader, today it broke out of a 3 month base. At the time of the breakout the spread was over 3%. The average volume (50d) was 54,000. As a trader using tight stops you can't take a huge position relative to average daily volume, I usually limit myself to 10% max and occasionally go as high as 20%* of 50d volume. Given the large spread limiting yourself to 10% would mean you could only buy 5400 shares/£5238. If you have a small trading fund that might be okay but as someone who does this for a living that's far to small a positon size.
On a positive note during a time period where some indexes fell nearly 50% my biggest drawdown from a ATH (including open equity) was 8.3%.
*Only if I am adding to a position I already have a profit on.
Have you decided to ditch this strategy in the UK and use it only on US stocks?
I would like to switch to U.S stocks as it should be much easier but the vast majority of my trading capital is inside ISA's. The cheapest FX rate currently available is 0.5%, which is 1% round trip cost. That might not sound like much but Mark achieves big returns by turning over lots of small gains. MPA trades have averaged 5% loss and 10% gain over the past few years. With a 1% fee that becomes 6%/9% which would have a dramatic effect on you returns.
If there was an ISA provider that had 0.1% FX fee and good stock coverage I would switch markets.
Hi Unwise2,
Interesting comments, and as a fellow Minervini-style trader, I agree with your comments regarding the UK market. I do aim to buy breakouts in UK stocks, but I tend to have a longer term approach. i.e. try to buy at the optimal point, but hold for longer. Names Like Boohoo, Volex, Saga.
For trading US stocks, I use an IG spreadbetting account and it works great. Its far more nimble than trading UK stocks via an ISA and I don't find the fees to be a problem at all.
I'd advise giving it a try if you want a platform to get exposure to US markets.
Hi
I already use IG for ISA's and spreadbetting. The coverage of U.S stocks on the SB platform isn't as wide as I would like and I don't really want to take capital out of ISA's to fund my SB account.
I also will hold a stock for a longer term move if the fundies look good, but even then liquidity gets in the way. Back in May I thought CDM had great long term prospects and it setup a tight cheat. When it broke above 280 on 7th May I could only buy 3000 shares before electronic trading was stopped, that was a fraction of the amount I wanted to buy.
You're clearly knowledgeable and have a real passion for Minervinis approach to trading have you thought about trading a small account with a US broker just to see what returns you might be capable of? Could it be that even after paying tax you might be more profitable than frustratingly trying to make the Minervinis style work trading UK shares in an ISA?
Could it be that even after paying tax you might be more profitable than frustratingly trying to make the Minervinis style work trading UK shares in an ISA?
That is possible but another factor in that decision is the U.K market has heavily underperformed the U.S in the past 4 years, presumably the political chaos around Brexit has been a significant factor. If Brexit doesn't turn out to be a disaster will we see the U.K market play catch up and outperform the U.S for a few years?
You should open a trading account with etoro. Currency is deposited in dollars and never changes until you withdraw it from the brokerage account. There is no commission charged on trades nor stamp duty. Sounds ideal for you.
The question I've been asking myself alot lately is do I keep funding my ISA where I'm achieving mediocre tax free returns or do I move that money into my US account where my returns are much better but see some of my profits go to the tax man.
Can't you hold the US shares within your ISA?
That's what I do. The forex fee is 0.5%, which is not great but there are no dealing charges on IG, so it's not too bad on the amounts I deal in. It is not just the tax but all the dividend complications, if held outside an ISA, some were a real pain with monthly dividends.
I have an ISA with IG so I could hold US shares in there but I think I probably trade too much so those forex fees would start adding up. I enjoy the freedom of being able to close a trade an hour after taking it if the breakout fails and not having the forex trip influence my decision making.
l've been swing trading for a year so I'm still experimenting with what works best but it seems that looking for 8-10% moves in 3 to 5 days are more profitable for me than my attempts to hold for longer moves. I came to that conclusion from a small sample size of around 80 trades I've taken so far but it does tie in a bit with what Unwise said about Minervinis returns coming from lots of small gains.
I think the CANSLIM approach can work within an ISA but the Minervini swing trading approach of turning over an edge as much as possible just isn't viable in an ISA. I guess I'm caught in two minds between trading breakouts and holding medium term in an ISA or taking money out of the ISA to short term swing trade in my US broker account that so far seems to be more profitable.
Thanks for putting some meat on the bones with your experience, I tried about 15-20 UK trades with zero success and could not putting my finger on what did not work.
Another thing I'd suggest is that the volatility introduced by market makers seems a lot less in USA shares (more competition ?) In the UK a generous stop (15%) always seems to get taken out and reverses very quickly, while in the US you can easily half that and be okay.
I agree a lot more volatility on U.K. markets. US shares are generally larger caps and the volumes traded are greater also. Yes get taken out too often on uk shares, I have given up on stop losses. Spreads in the U.K. are about 10x the US shares. I went through my US watchlist and the worst spread was about 0.5%.
Yup - UK market needs to get it's act together and become more competitive before some Robin Hood type get a foothold, I feel its only a matter of time.....
Are you willing to share the trades you did? Just need buy price and date.
Hey there.
Read your bio and I have had a very similar trading journey. This is also the exact same conclusion I came to a few years back and decided to move over to USA markets, exclusively. Not MPA but past MTP attendee.
Regards,
JP
Is there a Minervini guru screen? I cannot find one but have made the following which I think is a close approximation but would value others thoughts?
Hi All, hoping for some advice if you'd be so kind. I'm new to trading, however I've read lots of books and have landed on the Minervini style (and his influences Weinstein, ONeil etc). I've started doing some breakout trading in the UK market mainly on AIM and Small Caps (assuming that is where the significant upside is) but with very little success. Market Makers whipsawing the price around and the spreads mean my stop losses are continually triggered. I'm sure the Minervini System works, but just hoping for some advice from you guys that actually trade it! Is there a reason why you trade the UK vs the US market (looks like MarketSmith and IBD are great tools for the US market)? Are you looking at stocks with a set spread, with a set market cap? How strict are you on applying the stage 2 template (lots of UK stocks seem already extended - would you consider a stage 1 base breakout?), and how strict are you on improving fundamentals given a lot of company's 2020 results are skewed (and share price depressed) with COVID. Also are you trading at the end of the day and waiting for volume confirmation (assuming it doesn't extend too far past the breakout) or would you trade a breakout intra day. How often do Minervini trades come along? Do you trade multiple strategies if the Minervini trades setup infrequently? Sorry there's lots of questions here, but just trying to get a better perspective on the practical application of the Minervini strategy in the UK market. Big thanks in advance for any wisdom you can share.
Ergomed (LON:ERGO) had one of the tightest handles I have seen in a long time, spread was okay until today.
Entry taken on Ferrexpo.
More of a longer term base, not a tight pivot, but moving well so far., volume picking up.
Final contraction was 209-200 seems like a tight pivot to me.
Yes, fair point, there is a pivot area on the right side, which would have been a legitimate entry.
In this case, because of the past action, I was looking at the key level which had acted as resistance 3 times previously - i.e. key level to be broken.
Entered here on 888 Holdings (LON:888), but the volume hasn't come in to support the move (yet).
I like the squeezing of the MA's, now looking for the 50SMA to sweep up and offer protection for the stop loss (8% stop on entry).
I have a position in this - also encouraged by the high relative strength .
Possible opportunity on £PLUS.
Setting up again after a failed breakout from the previous base. Blue zone is the buy area (pivot +5%)
Hi - I have drawn the Greatland Gold (LON:GGP) chart slightly differently (but I don't claim to be an expert). I think a trade with around 32p target and stop around 22p could work out quite well.
I was modestly long from 12p and have doubled my position at 23p
Agree, I think hopefully spike up to around 34-35p and then settling around 31-32p
I'm in on Greatland Gold (LON:GGP), but the spread does make it slightly uncomfortable.
Volume not visible yet on IG, but cheking the 4hr it does seem to be there.
Slightly cautious as gold is down at the moment, but GGP breaking out could be a sign that its bottoming out.
There are some big updates due before Christmas, which if, it's as good as expected, it will bring the volume needed for the next leg up. Important thing is that the price action has tightened up suggesting that there arnt many sellers now and people have now taken positions for next stage
Greatland Gold (LON:GGP) looking ready for a breakout soon. Been tightening up for a few weeks and news expected before end of December about resource upgrades and testing results should be a catalyst for pushing it up soon. Very similar pattern to earlier in the year when it last spiked up.
Been keeping an eye on Greatland Gold (LON:GGP) but never traded it due to prohibitive >2% spread. Frustrating considering how spectacularly 4 out of 5 entry points since April worked out...
Just had a jump today. Think the next news will be big
New MM's video explaining in detail IPO trade:
New video from MM explaining his recent trades:
;feature=youtu.beThe video is very interesting and I think demonstrates the essence of an actionable VCP; the presence of tight days.
I've been checking recent twittered Minervini trades and have seen that often criteria are relaxed. The classic 50d ma > 150d ma > 200d ma might be better expressed as 50d > 150d, 150 & 200d rising, price above 150d. In the book they are a definitive proxy for stage 2. In reality it seems to me to be more of a guide. Fundamental criteria also seem very fluid. Maybe this is just during Covid times?
Fresnillo (LON:FRES) moving through pivot.
I entered Fresnillo (LON:FRES) today although it didn't 'surge' and volume was low. Because of the low volume I considered selling for a small loss towards the close.
On the daily it resembles a VCP
Or on the weekly a flag (although it is 13% H to L) :
I'll be watching this closely on Monday/Tuesday for some follow through with volume. If it had reversed today I'd have been immediately out.
Thank you Slaya - in at 1348, so a small profit so far, give it room to breath - in..... out....in..... out.... An early (ish) buy means volume of trades at the time is a bit meaningless.
Anyone any tips on how to assess volume in real time ?
i.e at 4:15pm volume may be half to three quarters the daily average So much seems to happen in the after hours auction how can this be factored into your trading ?
i.e at 4:15pm volume may be half to three quarters the daily average So much seems to happen in the after hours auction how can this be factored into your trading ?
It can't, you have no idea how many shares will trade in the auction until after the event. High volume breakouts are best but lots of successful breakouts happen on average volume, Hikma Pharmaceuticals (LON:HIK) is a recent example
Is Avon Rubber (LON:AVON) ready for another leg up?
(volume on IG charts is incorrect, true volume today was 110k which is more than twice the average for last 6 weeks).
Avon Rubber (LON:AVON) has formed a cup & handle/VCP but the handle is 10% deep. On larger cap companies I prefer tighter entry points.
I agree, also there's no tightening on the right side of the handle and the volume so far today is below average. On the other hand, everything else on the chart looks good:
- the consolidation period was fairly long at 8.5 weeks
- there's no overhead resistance at all (everyone is in profit)
- MACD-H just turned green today
- very high volume yesterday ahead of today's BO
- the 2 big red candles 2 and 4 days ago had the lowest volume in the whole handle formation (again this is better seen on stocko chart)
- the handle, although wide, is still technically within MM's 10% rule
So on balance, I'm in but not extremely confident.
I've been having another go at screening for early stage VCPs. Stockopedia doesn't have the tools for this (does Sharescope/Sharepad?) however, the closest I've been able to get is using the last weeks and months percentage change, based on close, as a proxy for range. The result is clunky and inelegant although an improvement (I think) on what I've posted previously.
Considering positive or negative weekly change and positive or negative monthly change there are four possible states (technically also 'no change' but this tends to pick up takeovers and flatliners).
As the screens don't have conditional criteria e.g. if X apply this, I took advantage of the toggle to define the criteria (this actually works better on the new site - apart from not greying out unselected lines).
In the structure below apply the blue block with A or B, or the green block with C or D. You will get false positives.
Change the 0.8 and 1.2 to relax/tighten criteria (away from 1). The first line of A,B,C & D might be redundant but is definitely helpful (to me) to work out what I'm aiming for.
Given the 'holes' by using % change rather than % range I intend to run these variants daily and transfer results into a portfolio (with no transactions) for further review.
Here is a screen link with a lot of greyed out additional criteria https://www.stockopedia.com/sc...
The blue and green blocks above, are immediately after the 'spread' conditions, at the top, that I've repurposed as spacers.
Hi HumourMe,
wouldn't it be easier to jsut fork 4 versions of the screen? and have VCP Screen A, B, C & D?
Thanks for the screens
Hi Phil,
Yes much easier to fork. Ideally we'd have meta-criteria that could be toggled to apply against everything else filtered (e.g. a trend template block that would be applied against any filter and edited in only one place).
I've actually decided to explore using Sharepad for technical screening. It allows price since X and price between X & Y as search criteria, features I requested here some time ago. All my Minervini screens I've attempted come up against this absence. Stockos screener has a much nicer interface and does some things better (Q on prev Q & Q on prev. year Q) , however, Sharepad currently has more criteria. Things change though and my decision point is January.
I'm exploring whether I can build a vcp candidate list through Stocko screens then use my own software to identify the volatility contractions in the candidates.
So far my code is able to identify trends, measure the depth of the pullbacks so I'm on my way to be able to then analyse them for a match.
what I noticed about the candidates from the screens you provided us that the action is quite recent, whereas my understanding is that VCP's can take months to establish so I'm wondering what will happen if the time based price action criteria in the screens is shifted from1 week to 1 month and 1 month to 3 months?
Your understanding is correct. At the time I was trying to pick up the end of the VCP, however, this leads to a shorter term bias.
I've changed my focus to detecting the tightening on the right hand side with respect to the left hand side. The way I now attempt to screen for this using an example of 12 weeks as the base (I have screens from 8 weeks to 7 months in two week intervals - much easier to use a loop!) with the following elements.
1 Check high from 12-10 weeks ago +/-2% high since 10 weeks ago (flattish top)
2 Check low from last 3rd (i.e. 4 weeks) is higher than low since 12 weeks (higher lows?)
3 Check price range within last 5 days is within 10% (setting up?)
4 Linear regression slope over 12 weeks > 0 - experimenting with this but seems useful
5 150/200 day ma slope upwards
6 Average true range 0.5 to 5% (<0.5 seems to exclude M&A)
Then I visually inspect the candidates and reject most of them. I also continue to tweak the screens when people post examples that I'm not picking up so I'm far from there. Looser criteria seems to work better as being too strict eliminates almost everything before I can inspect it.
At the moment for a sub-universe of the UK (liquidity required, low spread etc..) for 12 weeks I have Codemasters Group (LON:CDM), Gamma Communications (LON:GAMA), Rentokil Initial (LON:RTO) and Spirent Communications (LON:SPT) as 'potentials'. Codemasters Group (LON:CDM) looks 'closest' but I'd like a bit more consolidation or a tight day.
I've found adding the rule ...
%price vs 52k high < -10
gives better results.
It tries to ensure that the current price action is 10% below the hopefully recent crescendo in the uptrend. So combined witht the other % price vs 52k week high the price should be 10 to 35% below 52 week high
The pullback from a high is useful to bias you towards a 'dip' in a longer term trend. I've used that rule in some iterations but abandoned it after re-reading p206 to 209. There are times when you want to be buying at the high. Allegedly.
I'm interested in finding the setup rather than the trigger point
Hi
I'm sure many of you will have already watched this MM Vid from JUn 2020, but if not might be worth some of your time as a thought provoker or a reminder (in these volatile times).
;feature=youtu.be&app=desktopRegards
Howard
IG Group (LON:IGG) and Hikma Pharmaceuticals (LON:HIK) have formed cheat entries, I hold both.
The Hikma cheat I can see (between 7/8 to 3/9). IGG I have difficulty seeing. Can you please share the IGG dates so that I can peer more closely at the structure and see where I am interpreting definitions differently?
I bought IG Group (LON:IGG) on 21st August as it moved above 785. Since then it has made 2 more higher lows and is forming a declining cheat (can be harder to spot)
Thanks. I can see in your example spread (h-l definition) decreasing over 5 days and can see the setup you took although I've been rejecting these as too short. I was confusing the setup (minimum 3 weeks) with the subsequent short consolidation required (which only requires tightening ranges and volume).
Not OP but it looks to me that IG formed cheat from 12/08 to the breakout on 21/08.
Re: Hikma Pharmaceuticals (LON:HIK) what's the optimal SL placement? If a handle is tight I usually place SL just below its lowest point. However, here the handle is c. 8.5% deep which makes stop just below it too deep. Another possible placement is slightly below 50d MA for c. 6% SL which is more reasonable. But I don't recall Mark ever writing about using MAs for initial SL placement, only as a trailing stop.
See p63-65 of Think and Trade Like a Champion on staggered stops - it doesn't have to be set at one level. You could use the low of the pivot and the low of the handle as the bracketed stop levels.
Sometimes you get a cheat in a cheat. I bought Hikma Pharmaceuticals (LON:HIK) on 27th as it moved above 2400. There is a cup and handle formed inside the cheat/low handle. The logical placement of technical stop would be approx 2314 or 2222. As dmjram posted you could use a mix of the 2.
Bill Gates Buys I Buy Simple he is the godfather afteral - made a video of all his up to date buys and holdings https://youtu.be/CYC9o9HbsSk
Hi,
Just wondered if anyone had done Mark Minervini's annual training course. I was just contemplating it but having read all his material and seen numerous videos I just wondered how beneficial I would find it.
Cheers for any responses
Have you got a spare $4,999.00?
Thought I would highlight Strix (LON:KETL) - breakout of 200p at the end of July and now the stock has successfully tested the 20DMA and trended back up. Something I picked up in Momentum Masters was to check the intra-day volume, where I noticed that volume has heavy at around 2/3pm at 400k shares v an ADV of 550k so I topped up. End of the day volume was over 600k. I tried to add the chart but it doesn't seem to work!
De La Rue (LON:DLAR) possibly forming a handle. Any thoughts?
Could be, however, 200day ma is above the 150day ma so would fail the trend template, decreasing the odds.
It's had a decline in excess of c95%, that is way too high for Mark to consider. Usually it's up to 35% stretched to 50% after a sharp bear market.
Also fails the trend template criteria.
Yes, obviously at the time I mentioned it, it looked to be tightening up. But it seems to be dropping to low. But that's why we wait for the breakout rather than buying because it's cheaper
.
CMC Markets (LON:CMCX) has formed a cheat entry point
Isn't volume going the wrong way? I admit now that I have difficulty identifying cheats
Anyone have the books on Kindle and zoomed in on the charts using the PC Kindle Cloud reader? I'm interested in the fidelity of the charts and if possible would appreciate a screenshot. If they are appreciably better than the physical I'll pick up an e-copy (this was worth doing for CANSLIM).
The answer is kindle cloud reader and even kindle on a smartphone allow zooming and much clearer charts.
... and just for completeness here is an example. This can be found on p213 of Wizard. It is a lot clearer on a large monitor. You may need to open it in another window and possibly reduce its size using ctrl - (windows).
There have been strong breakouts for internet retailers recently, WINE, G4M, AO. be interesting to see if OCDO can follow them.
The 7.5% max stop loss per position is recommended by both Minervini and O'Neill (CANSLIM) for mathematical reasons (i.e. a 50% loss would need a 100% gain to break even, a 7.5% loss would need slightly more than 7.5% gain to break even - exact figures are in the book). However, I don't think that it has to be all or nothing and I've found 'bracketing' psychologically useful. What I do, when there isn't natural support is place a tight stop for half the position say at 5% and another for the second half at 9-10%. That way you have the same risk.
You might want to skip ahead to Ch12/13 where 'risk first' strategies are discussed.
You mention loss avoidance. Losses are inevitable. Following and refining a process is key. Well done on a great start.
Trading UK stock market using Mark Minervini strategy.
My advice is don't. Right strategy, wrong market.
Instead, use Marketsmith to isolate the best 50-100 growth-momentum candidates, usually on the Nasdaq, and wait for your cup-with-handles there. Minervini himself has recommended Marketsmith so it's a good bet that this is the optimal play here. Also you want to be trading with all the other Minervini acolytes as this will have a self-reinforcing effect.
The UK market rarely has sufficient liquidity, volume, growth companies and momentum to make the most of this strategy here. Sure, you will make some money as you will be picking growth companies but they will rarely exhibit the same runs as US stock. I would be amazed if anyone was getting 100%+ annual returns trading Minervini on the UK market.
It is only recently that I've begun to appreciate the sheer size of the US stock market(s) and the implications for the opportunities it presents.
Simply put, you need as much momentum as possible to trade Minervini. London simply does not have that momentum. As a thought experiment people should ask themselves what percentage of Minervini's personal trades over the last thirty years have been UK stocks? My guess is zero. If you logged into Minervini Private Access right now how many UK stocks would there be on the watchlist? My guess is zero. So simply by trading London stock you are not trading Minervini optimally.
Don't take my word for it though. Make use of social media and ask US "MoMo" investors if they would ever invest in London. The answer will inevitably be "no" for the reasons I have outlined in my first post. Now you might say that the US investors are wrong about about the UK but that's not the point. The point is that the huge capital they employ on Minervini's strategy is employed in the US not London and that's where you need to employ your capital to get the best results.
1. You need a dynamic and speculative market with lots of liquidity, momentum and other momentum traders.
2. You need a booming sector (usually)
3. You need a growth company in that sector
4.You need to isolate the best entry through SEPA
Pretty much everyone here on this thread for the past 20 months has fallen at the first hurdle IMHO.
You make some valid points and I have come to a similar conclusion. There is enough momentum in the U.K market to make significant gains but what is missing is liquidity. Poor liquidity results in large bid offer spreads which means numerous VCP's become untradable or high risk. I have had difficulty buying positions close to the pivot point in companies with Mcap's in excess of £500m.
Pretty much everyone here on this thread for the past 20 months has fallen at the first hurdle IMHO
The past 2 years 7 months haven't been great for Mark's strategy even in the U.S. As a MPA subscriber the only time substantial gains have been made are end Oct 19 to mid Feb 20 and mid April 20 till now.
Hi unwise2 (& responding to Billfunk1)
I completely agree with points made about US Vs UK market and challenges using MM in the latter.
I have a couple of observations from my experiences (to date).
I am taking an approach whereby I am trying to hone my MM skills in the UK.
A couple of reasons for this are:
Most obvious reason is FX charges. If not using a dollar-based US account a UK trader will face FX and trading costs going in and out of a US trade which mount up. Especially if the sterling/dollar rates go against you. Which can happen both going in and coming out of trades (trust my I've been there). To my mind working toward MM's key +20% gain (minimum and as an average across trades) requires a steady +25% or even more to match the goal. That makes US trades more challenging.
Market access and innate knowledge are useful. UK trading fits my daily window and I have an innate sense of some market gyrations, sector moves, industry movement and easier access to company information (MM does use fundamentals, particularly earnings).
Whilst IMO trying to do MM in the UK requires more scrutiny (and tolerances for frustrations) I think if I can get close to the key stats, then I might be able to compensate for the FX consideration to trade the US via a UK account. Or, feel the efforts required to open a US account will be worthwhile.
A final observation is that, in the US, when a down turn occurs to the market or a sector, it can be rapid and brutal. But then recovery can be just as rapid. This often occurs intraday or over just a couple of days. These gyrations can easily trigger stops, thus requiring further trading. Obviously gyrations occur in the UK market, but IMO they seem not to be so rapid, brutal and frequent, thus stops seem a tad more stable. (these intraday gyrations in US markets are in part why I mention previously the importance, fo me, to trade in the UK time window more so than the US time window).
I'm still only an early MM stager, so these ideas might well be improved upon.
Regards
Howard
Hi Howard,
FWIW, using a spread-betting account removes both the FX charge and currency risk (only the profit or loss is currency converted on close, not the entire position on buy and sell), and using greater than 1:1 leverage is not obligatory, so it does not need to be more dangerous. The downside is the overnight funding charge on the entire position size (or alternatively rollover charges which I guess equate to similar).
Hi ISAallowence
I did not know that about spread-betting, I have never explored that approach. Thanks for the heads up, I'll take a look.
Regards
Howard
I don't think Minervini actually wants to be trading much in this market. He is best suited for new bull markets rather than very old ones. MPA puts him in a bind as he is obliged to provide great entries all the time. No-one is going to pay $6k pa for the simple advice, "stay out of the market until after the crash".
I don't think Minervini actually wants to be trading much in this market.
Mark has been very active in the past 4 months and continues to hold several positions. Mark Richie has joined the teaching team at MPA and he has been equally active, he has said several times that he is fully invested in the past few months. Currently they have become less aggressive but are still taking some positions
No-one is going to pay $6k pa for the simple advice, "stay out of the market
That is what Mark has said for months at a time in the past 2 1/2 years. Sitting on the sidelines while the market tanks more than 40% can save you far more than $6K.
I'm looking for a little advice regarding a stop loss. I'm currently halfway through 'Think & Trade Like A Champion', which is the Kindle edition, so I find it difficult to quickly look back and find my highlighted notes regarding such things.
I bought Naked Wines (LON:WINE) on Friday's breakout at 429p after a VCP footprint of 10wk-20/7-3T. The bid at the close on Friday was 479.5p. Normally I employ a 7% stop loss which would be at about 446p, but there is no support around this price. Recent support for Naked Wines (LON:WINE) seems to be around 425p, but this would mean my stop would be at about 11.5%, and if the price did happen to dip back into this range, I would be at a loss.
I know Mark also recommends using a stop at around 50% of your average gain, but I have only been using and documenting my trades using Mark's method since the beginning of July. Currently, my batting average is 100% (I've only traded 6 companies, 13 trades total), and my average gain is 9.5%, so a 4.75% stop loss seems too tight.
Should I set my stop at break-even, in the recent support range, or lock in a profit? Any advice would be greatly appreciated.
Regards, Stu.
£Data - breaking wedge formation with above average (21d) vol.
Did you apply Minervini rules on this?
Hi Specimen - yes I used Minervini's concept of a pullback buy as well as watching for volume to increase significantly (over average levels). It's not intended to demonstrate a VCP pattern. Since breaching the red resistance line, the stock is now using this line as support; time will tell if this stock is a 'tennis ball' or 'egg'.
Codemasters Group (LON:CDM) - cup & handle. More vol ideally required.
Ocado (LON:OCDO) - I traded this one twice in recent months (both ended with a loss which is puzzling, considering the stock is up 120% since Mar). Looks like it's about to complete C&H with an 8-week cup (15% contraction) and a 2-week handle (8.5% contraction). Currently sitting just below resistance at 2200 which also doubles as a psychological barrier due to being a big, round number. Volume was decreasing throughout the consolidation and was the lowest on the spike down on 30/07. MACD just turned green today. However, there's no price tightness - some of the recent candles were 5-6% high. If I trade this one again, I'll probably buy just above 1200 with a very tight Dan Zanger's-style stop (1-2% max).
Dunelm (LON:DNLM) - unsure about this one as the drop from Feb high to Mar low was almost 60%, so larger than what MM would consider tradeable. However, the chart is bullish with a 9-week consolidation below 1260 resistance, volatility contraction, and volume reduction. Price in the last 3 weeks was contained to a 6.5% channel with the volume on down days lower than on up days and the spike down on 30/07 having the lowest daily volume this year.
MACD is about to turn green and there was a recent earnings upgrade. So other than the 60% initial drop, it seems to be ticking most boxes.
However, it's not clear to me where the pivot point is as the price bounced off resistance at 1262 a few times before the false break out on 28/07 (and what looks like a possibly another one today). So overall I'm on a fence on this one.
Hi
Mark has been trading stocks with drops greater than 35% because of the huge fall in the indexes. Everything has to be judged in context. Dunelm (LON:DNLM) has formed a cheat, the move above 1266 on 28/07 looked like a valid buy point.
Dotdigital (LON:DOTD) looks to have broken out
Yes, it was a nice breakout on a good volume. I passed as the spread was prohibitive at c. 4%. I don't think it's possible to consistently make money using MM strategy even with a 2% spread, much less 4%.
Would appreciate any comments on the chart for Crimson Tide (LON:TIDE), I thought it was showing some tightening up at resistance, possible bull pennant on the daily candle with potential breakout towards ATH over 3.75p
I’m long
re: Crimson Tide (LON:TIDE)
The recent consolidation range is almost completely bounded by the spread, which is horrendous. Stocko reports it as 938bp = 9%. Very difficult to 'trade' large spreads - have to take a fundamental/conviction approach in my opinion.
In the past I inadvertently set the price for the day with my buys/sells; this is possible even on some thinly traded mid-caps. I hope no one based decisions on where I pushed the 'last reported trade price'. I learnt to seek an element of liquidity.
In Minervini terms the 150day ma < 200day ma. So it would fail the trend template.
Thanks for your insight.
XP Power (LON:XPP) has broken out on the back of good half year update.
Well I missed that one! Win some, lose some.
Yes, the price is storming up and is now firmly above 2018 highs (possible overhead supply). The only slight concern was somewhat low volume earlier this morning but it's picking up if the trend continues it will end up c. 50% above average.
I have Contourglobal (LON:GLO) on one of my watch lists. Volume has been contracting, and it seems to have formed a handle, but is the price movement in the handle too volatile?
Currently the handle ContourGlobal (LON:GLO) has formed is 10.5% deep, which is more than Mark (or I) would trade. Also it hasn't yet entered stage 2.
Also, 150MA is below 200MA which means it doesn't meet the trend template criteria. However, even if 150MA was above 200MA and the final contraction was below 10%, it still looks like stage 1 stock to me. I thought it would need to break above 226 and form first stage 2 base before being considered?
150MA is below 200MA which means it doesn't meet the trend template criteria
I thought it would need to break above 226 and form first stage 2 base before being considered?
I did say: "also it hasn't yet entered stage 2."
$XPP has formed a (slightly low) handle, the first part of the handle is wide but it has tightened up in the past 10 days.
re £xpp I had to check the time of your post (5.03pm) as there was fast movement in the last few minutes yesterday which triggered my limit order. My entry is marked below - 5m chart (when activity occurred).
Today hasn't resembled a sprint out of the gates; I'll keep a close eye on the 20 day ma and the close.
Today I did some house cleaning, as quite a few limit orders triggered and then went nowhere. So they weren't breakouts. So I shouldn't be holding them. Collectively I was unwilling to give them the benefit of the doubt. Individually in a more forgiving environment - possibly.
Returning to £XPP. It failed to make any headway today so I culled it. Would re-enter if it consolidated first under the previous high.
London Stock Exchange (LON:LSE) which I'd had a stop, limit order for, also triggered, but then fell back to the near the open indicating supply.
(as an aside over in Europeland, BioMerieux, which was a 3T 22/12/9 also triggered, but didn't follow through - didn't have notable tight days though which I should have noticed
).
In retrospect Gamesys (LON:GYS), below, was a stretch at a VCP, although the volume was doing the right thing, 200d MA was a bit flat. I entered this 16/7 , 12 days ago and it wibbled about and went nowhere. No sign of overwhelming demand so vamoose.
All of these were losses of 1-2%. However IMO it is better to reset and wait for the real breakout or another opportunity. I'll sleep uneasily tonight, however, it'll be down to the heat and not these shares.
If anything I'm going to try placing my limit orders 1% higher, as they seem to too easily trigger. If they still magically trigger with regularity then I'll switch to alerts.
Howard you don't always have to wait for the previous high to enter a position, sometimes a pivot forms lower down. With Gamesys (LON:GYS) 911 would have been a valid entry which would require a smaller stop. Mark did something similar with Netflix on 13th April.
$FLTR has setup a classic looking VCP with tight handle. I considered the move above 11700 on 17/07 too soon to buy as it hadn't formed a handle.
I found this tweet by Minervini useful:
VCP - Volatility Contraction Pattern is not a separate pattern from a cup with handle, power play, inverse H&S, double bottom, cup completion cheat (3-C), etc... it's a characteristic of the patterns. Yes, it does map out a "pattern", but it can occur within any of the above.
https://twitter.com/markminervini/status/1285646150733836293
I was looking at Naked Wines (LON:WINE) again which I think it qualifies for a powerplay and now seems to be going through a VCP.
Naked Wines (LON:WINE) is on my radar too Herbie.
With my 'Wyckoff Hat' on it has built a significant cause with a Phase C Spring and Higher Low Test (this acts as the final Shakeout of weak hands). It is now reversing the Backing Up Action (BU) following the Sign of Strength (SoS) rally.
Commonly a VCP, or Wyckoff Wave Pattern, forms between the SoS and BU as weak hands supply is absorbed at higher levels. You can vaguely see on the chart below my annotations, but clearly after the strong rally we note effort (volume) is decreasing in conjunction with decreasing price volatility - i.e., the contractions / swings in price are lessening hence the VCP is forming.
I'm looking for a breakout with a strong close above £4.43.
JC
I frequently trade using Minervini's Volatility Contraction Pattern principles.
In 5 of my recent VCP trades I've left $121k on the table.
I do a post analysis of these 5 trades (including showing brokerage statement of dates bought and sold) in the video below.
I'm working on holding part of the position for a longer move and sitting through the first pullback. Hopefully you can learn from my 'mistakes' and optimise your results. These are all US stocks shown in the video but the principles are the same for UK stocks.
https://www.youtube.com/watch?v=OKcWqbbLQqI&feature=youtu.be
JC
Jack the trades you have highlighted are more like powerplays than base VCP's. With CARR the day you bought the most recent contraction was 16.6% which would be far too deep for Mark. You can obviously trade how you like however the buy point consistent with Mark's rules would have been 10th July @ $24.30, only required a 4% stop.
"I frequently trade using Minervini's Volatility Contraction Pattern principles"
Hi Jack. It's nice to see how your channel is developing, good for you.
A thought which popped into my head watching your reflective analysis was that you did not offer a comment on how much of a drawdown both in percentage terms as well as value terms you would have actually had to live through if you had indeed held on longer to the trades you presented.
I too struggle with this bifurcation point.
In my case, Minervini's +20% gain, versus less than 10% losses and the striving for two to one win/loss ratio all play into influencing exiting behaviours (I appreciate you work with your Goldilocks zone).
But also, might an answer perhaps lie in proactively re-visiting exited trades to try to spot the second part of the VCP and additional break out?
Again Minervini does advocate never to be shy about going back into a trade. I'm afraid I am not close to determining guidelines for myself on this, but have had a few successes by frequently (daily) re-looking at my closed positions.
A benefit to this re-cycling of stocks is that I become increasingly familiar with a set of stocks which seems to be stabilising out at about 200, whereby I ebb and flow to holding as few as 5 and maxing out at about 40 (if market is really rising fast).
I usually do achieve Minervini's greater than 50% wins, I usually match his less than -10% losses, I am getting closer towards a two to one ratio, but I am a dismal +11% average gain as opposed to the ideal at least +20%. Some of this is current volatility I believe, a bit more is getting into trades too late, but some is exiting trades too early. I am reflecting on how to improve. Thanks again for the vids.
Regards
Howard
Howard
This point has been discussed before, nobody knows how high a stock is going to go. Mark typically sells part of a position (usually half) at 2R and holds the other half for a bigger move, often it will be sold after moving out past first pullback. This constant turnover of edge works well in the U.S due to the number of stocks available to trade. In the U.K we have significantly less choice.
Hi unwise2
Yes, thanks for the response. I employ Mark's risk mitigation, 50% sell if trade is going against expectations, then full exit if still going against you (his risk mgt. two chapters are two of the most important chapters in his first book IMO, I re-read them often).
I also agree strongly with your point of US vs UK.
BTW what do you mean by '2R'? (is that two times risk?)
Regards
Howard
BTW what do you mean by '2R'? (is that two times risk?)
Yes, if a position has a stop of 8% you need a gain of 16% for 2R. Mark's overall goal is for winners to be at least 2R. You only need a win rate of 33.33% to breakeven if you are a 2R trader. At 50% win rate you are making money.
For example if win/loss is 50/50%, position size 20% and average gain/loss 16/8% after 50 trades you would have made 40%.
Hi unwise2
Great thanks for clarifications.
Regards
Howard
Hi Howard,
Thank you. I see you're in the rabbit hole of optimisation that never ends too!
I target my average loss < -8%. Recently it's fluctuated around -6%.
A large part of exiting these trades too early, at least for the 'second half' of the position, is due to my bearish outlook - which I think is well placed. However, it has been detrimental to holding for longer moves and I've left too much money on the table.
A way to combat this, having just been reflecting, is to trade the 'second half' of the position on the weekly timeframe. This will have the effect of focusing me on the longer term picture and embodies O'Neils rule of holding for 8 weeks when the stock has gone up 20% in short order. Whether I hold for 8 weeks is another matter.
Anyway, back to the rabbit hole... I'll let you know of my progress.
Hope all is well. Tony and I are going to play golf at sometime, you're welcome to join us.
JC
This is an alternative screening approach that aims to identify consolidating shares in a stage 2 uptrend and only present the strongest. It uses a lot less criteria than my previous approach.
I've been playing around with screens to try to narrow down selections to those undergoing consolidation. I'm not too bothered where the 50 day ma sits so if you are being strict you'll need to add that back in. At the moment distance from 52 week high/low seems irrelevant if you require price vs 200d rank to be greater than 75, as below, however, other market conditions might require these. Requiring a gap between 130d ma and 200d is there to ensure they are in the right order and not just temporarily crossing over. I've used 10% but will be tweaking this. The last two requirements (below) seem to pick up stage 2 shares effectively.
When consolidating the % price change over time between the top and bottom of the range must be within X %. 10% is the rule of thumb. If at the very top of a range then change from low = 10%. If at the base then change from top = -10%. Unfortunately we only have point estimates between now and 'time ago' so the best we can do is absolute price change over time >-10 and < 10. The two time periods which are relevant are 1 month and 1 week. This gives too wide a band and ignores what happens in between the point estimates so visual inspection is needed (a good time to also check volume) to verify any consolidation (I move possibly into a portfolio for further checking/qualification). I went with 1m max as this is aimed at consolidating for at least four weeks; of course if consolidation > 4 weeks that will also be picked up.
Despite the flaws, I thought that I would share this alternative to the Price% 50d <% 130d <% 200 day ma, approach. In the shares I've looked at the MA condition is met (well actually I checked 50/150/200 and I also screen on other criteria such as spread so I might not see what you see). Hopefully, my attempt at potentially identifying the final part of a volatility contraction pattern is useful.
Anyone got any other ideas as to how to better identify consolidating shares? I've put in requests to extend % from 52 week high/low to other periods so if you can see merit in that idea then please add weight to it by using the green chat icon or going to the learn tab and adding the suggestion (I'd also like slope of each MA).
Thank you for sharing HumourMe, much appreciated.
2 potential stocks Discoverie (LON:DSCV) and Scotgold Resources (LON:SGZ) forming possible handles. Do these meet the correct criteria for possible breakouts. whats peoples thoughts
The chart for Discoverie (LON:DSCV) does meet the criteria of a VCP. The ideal buy point for Scotgold Resources (LON:SGZ) was just above 75p on 10/7 when it formed a low handle (cheat).
These haven't come up on my screens so thanks for sharing:
Scotland Resources: There was a buy point on 10/7 but it is not currently buyable. However, the fundamentals look pretty good so it is worth keeping on the watchlist to see if it resets.
Discoverie: This looks ready to go. It looks like it tried to breakout yesterday but it didn't follow through. However, this is a good sign though as more weak holders are getting out. Recent down days have very low volume but it was up today on higher volume. This looks a fairly good high probability trade.
Yes, I agree about DSCV having a go yesterday. Volume according to stocko was double the 3m average. Although it didn't hold it doesn't look like there are many sellers. And interesting that nearly all major institution holders have bought in, in the last 2 months. So hopefully if they still building a position, there will be another breakout. Looking at the chart, a 100p+ move up isn't impossible
I had a look at Discoverie (LON:DSCV), for me it fails on several counts, debt is too high over 3x Op. profit. Earnings forecasts have been down graded, growth is negative.
Agree fundamentals look poor for Discoverie (LON:DSCV), it anyone trades it it will be purely for technical reasons.
Universe (LON:UNG) has a cup and handle formed, quite tempted by this but it's a micro cap.
LoopUp (LON:LOOP) has broken out today on a good trading statement, up 12%.
Out of interest, how many UK positions does everyone have opened today that were triggered by a MM trade entry?
UK positions: 2. One bowl, one cheat. Both low conviction 1/4 and 1/2 position size.
Just 1 on a half position
I have 2 positions currently in my primary trading account. I recently looked though the U.K market and could only find 14 setups that had made at least 2R since March low. That's a low number for approx 3.5 months. One of them had a flat 200d so you could argue it shouldn't be included. There have been several setups that would have got stopped out.
Codemasters Group (LON:CDM) is moving on.
Batm Advanced Communications (LON:BVC) who recently formed a cup & handle have this morning announced the release of three new diagnostic testing kits to detect Covid19.
My 6% stop loss was triggered a few days ago on this one selling 50% of my holdings. I've decided to top up on this news as a sell off hasn't really materialised.
Does anyone else hold Batm Advanced Communications (LON:BVC) or have any thoughts?
Regards, Stu.
If you are going to use tight stop losses you need to buy close to what Mark calls the "pivot point". I bought BVC at approx 102 and 105, Through complete luck I sold around 133. I wouldn't buy it here. It might go higher but there isn't a logical place to put a sub 10% stop loss.
Batm Advanced Communications (LON:BVC) I held it from just over 100p but was stopped out at 123p, I have a question if you don't mind, or for any one else that doesn't mind sharing. When looking to take profits are the levels arbitrary or more automated ie % gain, technical like measured from bottom of cup to breakout etc? I would appreciate any help. For me I moved my stop loss up from 107 to 111 then to 125.
Thanks Alb
When to sell at a profit is the hardest question in trading/investing. There is no real answer. You want at least 2R. I don't usually trail my stop loss. Once the stock is at a good gain I move my stop to break even and use judgement when to sell. Sometimes I get lucky and sometimes I sell way too soon. If a stock has good growth forecast versus it's P/E I usually hold it longer. E.G I started buying Codemasters Group (LON:CDM) at 280 and still hold it as it looks cheap compared to its peers.
Thanks unwise2, I appreciate your insight. I agree when to sell is probably harder than when to buy.
Might be too late (although the fundamentals look good as well) but looks like a promising cup, handle and breakout at Rio Tinto (LON:RIO) .
BHP (LON:BHP) and Anglo American (LON:AAL) have formed similar patterns, I haven't bought as the 200d is flat. I might get interested in Rio Tinto (LON:RIO) if it can form a tight handle around 5000.
For those who haven't seen it here is a 1hr 45m video by Mark and David Ryan from 2015 https://www.youtube.com/watch?v=SwxR6wcB12o
Lots of nuggets people may find useful. I found the pace a bit slow, so used the settings (cog icon, bottom tight on PC) to watch/listen at 1.25 to 1.5x normal speed.
I have been rereading Mark's book again and I have been taken by the Cup & Handle strategy. I have set up a watch portfolio in Share Scope consisting of a universe of 180 Share with the intention of tracking the Cup and Handle theory. The portfolio is made up of stocko's Super Shocks and High Fryers only.
I was thinking of opening a new thread here, to dedicate to Cup & Handle discussions, but then came across this thread which seems to do the same thing.
I have also set up a paper portfolio to trade the system before going live. I have currently three trades in place LOOP, RRE, and AIR bought at 176.16; 1849 and 98.48 the prices I could have bought from my IG spread betting account.
The question is should I set up a new thread or post my updates here. What do you think? and more importantly, what does Mr. unwise2 think?
I now look forward to your reply's
https://www.stockopedia.com/share-prices/rockrose-energy-LON:RRE/news/rockrose-energy-plc-recommended-cash-offer-for-rockrose-energy-plc-urn:newsml:reuters.com:20200706:nRSF0985Sa/
This RNS may be relevant for your trade in £RRE
Thank you Aesurgenor. I should have looked deeper into the Company. what do you think about my proposal?
Depends on how strictly you intend to stick with Minervinis definition of a cup with handle versus other definitions. If it is Minervinis (which I think is the best defined) then this thread. If a 'looser' definition then its own place.
Thanks for the reply
Hi Terry,
How are you going to filter which cup and handle patterns to trade? If you are only going to post about companies that are in an uptrend then that seems very similar to what Mark does. If you are going to post cup and handle patterns regardless of where they occur on a chart a new thread would be best.
O'Neal wrote about cup and handle patterns in his book and he only traded them if the stock was in an uptrend.
Looking at LoopUp (LON:LOOP), is not the entry point around 140p? As the price is now back down to around 150p has this not triggered your stop loss?
Actually I was considering this share, I don't know if it still worth buying, having gone up over 20% and back down, not sure how Minervini would view this.
I watched LoopUp (LON:LOOP) but the handle was too deep at 14%, if it had been shallower I would have bought at 145 on 02/07.
Hi Terry,
Can i ask what rules you are filtering on for your 180 cup and handle shares? How are you to review this lot too, look for price alerts or visually view the charts etc? i I too am very interested in this and was about to start focusing on minervini in March and got distracted for some reason!
Thanks
John
Although I'm neither a practitioner of his methods nor a follower, I get regular updates from Mark Minervini on my Twitter feed. It could be my imagination, however, he never seems to recommend a particular company and appears to talk very much in the round. Nothing wrong with that. Nevertheless, it does strike me that his "System" does leave a lot to interpretation.
Nevertheless, it does strike me that his "System" does leave a lot to interpretation.
I agree that there are grey areas. However I have read a lot of books on investing and his are the most complete set of rules I have ever come across. Not just what to buy and when but very comprehensive money management.
Mark often says if you could put his trading method into absolute black and white rules hedge funds would write algos and the edge would quickly disappear.
he never seems to recommend a particular company and appears to talk very much in the round.
You can get very specific buy recommendations from Mark, but you have to pay for it.
Just not sure if the volume is high enough just yet. Or will the volume come in once its cleared the previous highs
Thoughts on Centamin (LON:CEY) could be ready to break on volume
Centamin (LON:CEY) has created a cup and handle but the handle is angled upwards, Mark calls it "wedging up" it isn't ideal. You don't always get high volume on a breakout day.
When I see it on the daily chart I interperated it as a a flag forming with the price action tightening up and volume falling. I expect the problem with charting is its open to people interperating it to what suits what they are looking for. I'm new to this type of trading. I would be grateful for your opinion of why it's not ideal. I have marks first book but feel I need to keep re reading it. TIA
Everything is probability, a rising handle might work but statistically a flat or declining handle has better odds. Hummingbird Resources (LON:HUM) formed a flat handle between 28-30. Batm Advanced Communications (LON:BVC) formed a short declining handle 105-97.3.
I bought Centamin (LON:CEY) this morning at 188.16 without waiting for volume. What I like about it is the long base structure (7 weeks+) and a tight handle formed over last week. Besides, many gold mining stocks went sideways over the last month while the gold price kept climbing up. Time for miners to catch up?
Other recent VCP breakouts I bough: Plus500 (LON:PLUS), Halma (LON:HLMA), £FRES.
Fresnillo looks good. I completely missed it in my screening, 865 looks like a good buy point.
I am 30% in cash.
30% In gold.
rest in free 100 shares mainly by group ,vodafone and gsk.
Batm Advanced Communications (LON:BVC) is a stock I am also watching, as Howard has posted it matches the Power Play criteria.
Hi
A recent video from Mark and David Ryan (06/06/20), might interest some. It's almost an hour covering useful ground (I posted this on the US thread not noticing there are UK & US threads now).
https://www.youtube.com/watch?v=anWpGyXmG1k
Regards
Howard
anyone have any thoughts on £BVC. just needs a handle to form and could possibly become a candidate
Hi pleaty1
Batm Advanced Communications (LON:BVC) had a positive trading update a couple of days ago. https://www.investegate.co.uk/batm-advanced-comm--bvc-/rns/business-and-trading-update/202006250700050037R/
Also, if you want to this is a short vid (from Proactive) with the CEO
https://www.proactiveinvestors.co.uk/companies/news/922821/batm-advanced-communications--overwhelmed-by-demand--for-its-coronavirus-tests-922821.html
I have traded Batm Advanced Communications (LON:BVC) from 22/04/20. Exited 28/05/20. Have just re-entered on reading the RNS 25/08/20.
Regards
Howard
I would suggest that if Batm Advanced Communications (LON:BVC) can move up further despite what I anticipate as a red-market day tomorrow, then that would mark the start of a healthy uptrend. MACDs have turned positive. I don't hold... yet.
BVC I think meets the definition of a Power Play / High tight flag - although it is less like a flag and more like a suspended blanket.
Criteria, p255 Wizard:
Explosive move up on huge volume, 100% or more in less than 8 weeks - check
Sideways in a tight range, correcting less than 20-25% over 3 - 6 weeks - borderline
Within the base, volume should contract - mostly - certainly higher on the left
That just leaves the pivot to be made above 104p
Broke out today on good volume (2.1m so far vs. an average of 1.4m). I missed my alert but managed to open a starting position at 104.85. Will be looking to possibly top-up tomorrow if it keeps going up on good volume.
I also bought, looks like a good clean breakout, you don't get a classic cup and handle on a powerplay very often.
I bought too at 106. Now up about 6 pence. There was some strong buying today between 11&12 (about 370K). This is my first Minervini UK trade so I'm watching with interest.
This is an interesting one to be in (limit executed @ 105). The volume follow through is encouraging.
The bowl shape was a bit of concern to me as it wasn't clear that enough 'weak hands' would be discouraged. However, on reflection the slow grind upwards allows a 'managed' transfer as people get back to breakeven. Compressed right sides impede this by converting people from 'waiting for break-even' to 'it is finally happening'. Then people are set up to sell at the old high. Range bound grinding also set up a self-reinforcing hope-despair cycle. A traditional 'flag' sets up with a successive trend of on balance lower lows. At least that is my mental model of why patterns are meant to work - probably obvious to others.
Everyone who holds, unless they bought on the latest tick up, is now in profit, so no pockets of overhead resistance. Now it'll come down to profit taking, accumulation and lending to shorters ... or the absence of further buyers. Lets hope the institutions are keen.
I prefer to buy a powerplay on a cheat entry if possible, I wanted to buy Batm Advanced Communications (LON:BVC) as it moved above 91 but it gapped up on an end of day auction from 90.8 to 93.75. It then opened at 94.
I still have some difficulty perceiving cheat entries, even when I'm given a clear pointer as to where they should be :-) Back to the books for me.
I am watching this one to form a handle. Naked Wines (LON:WINE)
Personally, I don’t trade anything with an overhead supply. There’ll always be sellers waiting to claw back losses after buying at the higher prices
I've been watching this one too and looking for a breakout at 440. I don't think this will happen. The final year results were solid rather than spectacular and based on increased business during the lockdown - unlikely to get repeated although one never knows. There was a moderately encouraging article about their prospects on on Yahoo Finance / Simple Wall Street: but the most optimistic prediction is for 475 and many estimates are more cautious. It should have risen strongly on Friday 26th with good volume, and it didn't. The institutional buyers are not currently interested. My guess is that the price has peaked and will fall from here.
Is this too long/deep a structure? This is Keyword Studios over 5 years. Not yet formed a handle ...
The 58% fall in Keywords Studios (LON:KWS) is deeper than Mark recommends, at the moment it looks more like stage 3. It does however have strong forecast growth for 2021. If it can eventually form a tight handle you could try and trade it.
Keywords Studios (LON:KWS) has now formed a handle 7% deep, but Stocko is incorrectly reporting 2019 adjusted EPS at 19c, it was actually 49c so EPS is forecast to drop in 2020 not grow 146%.
With Keywords Studios (LON:KWS) my limit order triggered this morning at 1892p. It hasn't exploded out of the block, volume is low. Not sure that I'll still be holding it at the end of the day, in which case I'll consider resetting the order.
Hi all,
For those interested..
https://youtu.be/99BE_12SU6s
Hi all
I highly recommend watching Gareth's Minervini video. He really has done a first rate job synthesising such a lot of excellent advice into a very accessible format.
I have really embraced the use of the 'score sheet' presented in the video and found it to be a powerful way to correct several trading faults. Like all powerful ideas it takes a while to pull the data together but worth the effort.
It is so much more than a few statistics in a nice table with a graph.
It portrays and reflects every one of your trading actions (good/bad). Using it automatically encourages you to look at each step of your trading plan (see the first part of the video) and recognise how every aspect of a trading cycle is connected to each other, resulting in the powerful statistics in the spread sheet and graph.
Many thanks Gareth for your work on this, and all your other video's.
Regards
Howard
Just to expand on Howards (and Marks!) recommendation to review trades I've found a quick 'n' dirty way to do so easily. If you keep trades logged on Stocko then you can go to the portfolio transactions tab and then right-click to open a share in a new tab. Of course then select chart.
Turn on buys and sells from the chart menu and anything else you use, then save it. The last chart selected will be the default for subsequent ones. Then right-click down your transaction sales - I do them in blocks of ten. If you didn't take notes at the time of the trade then try to rationalise why you bought and sold, with what happened next and take notes.
For me it soon became clear that the trades that didn't initially work had less well defined (imaginary?) structures. Also I didn't give enough space to those that went on to profit and grabbed at gains too quickly. I didn't think I'd get so much from such a simple exercise and will be doing it again much more formally.
Excellent video!!! Some excellent principles covered... some of which I already encapsulate in my trading and some not so much (e.g. recording overall win/loss ratio).
CMCX has passed MM's non-negotiable Trend Template. I believe.
This thread has video reviews which include two of Marks books.
Wizard
Champion
I enjoyed the reviews (as well as the other reviews also on the channel).
Hi Humour Me, just seen you recommended my content, thanks a lot...
Fascinating thread! I'm also a fan of MM and his books. Has anyone tried/tested using MM's trend template as a filter but buying pullbacks instead of breakouts?
Running trend template criteria with spread <2% returns only about a dozen or so UK stocks on most days (compared with a couple of hundred a few months ago). One I recently bought is Ocado (LON:OCDO) on break out from a 2.5-week base (11.5% & 8.3% contractions).
Pros:
- already up over 100% since March lows
- breaking out on the highest volume in 7 weeks
- the last contraction on 27/05 was a shakeout with the price dropping >8% in a day
Cons:
- today's volume was low which increases the probability that the breakout will run out of steam fast
I sometimes buy pullbacks, but the best breakouts don't return to or below the pivot. I usually buy if the stock came straight out of a base without forming a sub 10% handle. Ocado (LON:OCDO), Naked Wines (LON:WINE) and Greatland Gold (LON:GGP) are recent examples of powerplays. Greatland Gold (LON:GGP) is clearly the best breakout.
Mark has bought pullbacks on MPA. £TM17 is an example I bought, the last contraction/handle was too deep so I waited. Ideally you want the pullback to be on lower volume than the breakout. I have only seen Mark buy pullbacks into bases after a breakout and usually the breakout hasn't gotten higher than 10% out of the base.
Hello Unwise,
Thank you for this great thread, I have learned a lot from your postings. I've read all of Mark's 4 books and watched all of his public webinars, but still had a few questions that I hope you could help answer as an MPA member and long time Minervini trader:
1. VCPs: I understand that the typical VCP is a set of contractions against a single horizontal resistance line, but what about VCP's that slowly wedge upward? Meaning first contraction sets a high, then next contraction is slightly higher, and so on. Are these still VCP's or not? I've been struggling because typically this upward wedging is viewed negatively, especially with low volume (Oneil says upward wedging handles are bad and Gil Morales/Chris Kacher speak negatively about them).
2. Pivot points: my understanding of pivot points are that they are usually the high point set by the base. For example, the high point set by the handle in a cup and handle or the top point in a flat base. However, seeing some of Mark's buys in twitter and webinars it seems like he buys deeper into a base. Is this because of a break of a trendline or a pocket pivot (as defined by Chris Kacher and Gil Morales)? I sometimes struggle determining what the proper pivot is for this reason and also my typical training has been that proper resistance is only created by two touches, not one. So I'm not sure if I should exclude one time breaks of a resistance if there's a more "valid" resistance slightly below that touches two other intraday high points. David Ryan also speaks about breaking out from the top 90% of the base, so I'm not sure if I should be lowering my pivots so I don't buy too extended, but I also don't want to buy too early. I hope this makes sense and I can try and find examples if it doesn't.
3. Base length: I know Mark mentioned bases run from 3 to 65 weeks, but do short bases work that often in your experience (5 weeks or less)? I'm trying to fight FOMO by waiting for bases to build longer and I know Oneil doesn't like any bases less than 4 weeks in length, generally.
Re 1, you need to distinguish between the ascending base pattern and wedging price moves of higher highs and higher lows.
O'Neill's book has examples of both to see the difference.
Right, I'm saying if it's not an ascending base then it's clearly bad, even if it's showing volatility contraction because it's wedging upward
Hi Big Dawg,
1. Mark doesn't like a handle or cheat that has a top that drifts upward, either flat or slightly down is preferred.
2. A pivot point can form just below or just above the previous high, Hummingbird Resources (LON:HUM) formed a pivot recently at 29p but the handle was too wide for me. Marshalls (LON:MSLH) formed a high handle in Jan-Feb 2019 at 515p. Mark likes to buy "cheat" entry points inside a base, an example of a cheat was GlobalData (LON:DATA) at 1100-1120p mid April. Sometimes a share stair steps out of a base and provides more than one pivot point, Future (LON:FUTR) did it in April 2018 with a cheat (345p) and a handle (366p). Halma (LON:HLMA) formed a cheat (1428p)and a handle (1515p) Jan-Feb 2019.
3. I am currently doing some research into historic bases that have formed in the U.K, I don't yet have enough data to comment on this accurately. Usually Mark likes bases that are 6 weeks or longer for a new high. Powerplays are different to VCP's and can be successful with a 2 week mini base, Naked Wines (LON:WINE) is a current example.
Sorry to ask so many questions but, was wondering about pullbacks. I know Mark talks in his books about squats and reversal recoveries, but what about pullbacks to the pivot (but not going below the pivot) point or pullbacks to a moving average (to either add to a position or initiate a position)?
This method of reading charts to determine what a share is likely to do is basically akin to reading tea leaves. You can see these patterns if you look hard enough ..but are you looking at Intra Day, Weekly, Monthly, Yearly ...5 yearly .?! In my humble opinion technical analysis is the art of predicting the past ...
I’ve read Marks book in detail and he admits himself he is only correct 50% of the time at best, and allowing for some self promotion let’s assume he’s right on a share 40 % then most of the time he’s wrong with his method. You would need to have incredible money discipline, market timing and a fair bit of luck on your side to make any money trading his way.
This is the second time you have posted that opinion on this thread. If you think TA is rubbish why bother reading it? There are literally thousands of threads on this site for fundamental based investors. I think value investors that attempt to catch falling knives are crazy, but I don't go onto Small Cap Value report threads to tell subscribers that try it they are nuts. I would consider that disruptive behaviour.
Stockopedia is probably the last website in the U.K like minded investors/traders can have a sensible conversation, I would like to keep it that way.
There are dozens of books on trading that have hundreds of examples of very successful traders that use TA. If you can't be bothered to read them or want to deny their existence that is your choice.
he admits himself he is only correct 50% of the time at best
I suggest you read "The Art of Execution".
The Art of Execution is an amazing book. It’s helped me immensely.
The Art of Execution is it written by Lee Freeman?
The Art of Execution is it written by Lee Freeman?
Yes.
Lee Freeman-Shor.
So why post here?
It’s akin to you disliking fast food, and then walking into McDonalds just to tell everyone in there how much you dislike fast food.
Great to hear that....means it keeps working for those with the discipline to apply it while others sweat over balance sheets, debtor ratios and instrinsic value.
You might want to change your screenname though....
"I’ve read Marks book in detail and he admits himself he is only correct 50% of the time at best, and allowing for some self promotion let’s assume he’s right on a share 40 % then most of the time he’s wrong with his method. You would need to have incredible money discipline, market timing and a fair bit of luck on your side to make any money trading his way."
He does write in detail about money management so whats your opinion on what he says about that?
Its funny I just read another book that went as far to say that with correct money management and position sizing you could coin flip and still have a chance of making money with what is essentially a random entry point. That is to say how big a factor those two things play in people making money.
"Its funny I just read another book that went as far to say that with correct money management and position sizing you could coin flip and still have a chance of making money with what is essentially a random entry point. "
Was that Van Tharp you were reading?
It is yeah. Not a bad read, the main reason I were reading it was for the position sizing section as I thought the Minervini ones were not too clear.
Win % is not a great predictor of success. Most people take profits quickly so they have a high win % but they let their losers run so they don't come out ahead. That's why Bill Eckhardt, a PHD mathematician and legendary trader, believes that lower win % strategies usually come out ahead because it means they're taking quick losses instead of quick profits. Unless you're scalping or something, win % doesn't mean much.
Breakout:
You can see these patterns if you look hard enough ..but are you looking at Intra Day, Weekly, Monthly, Yearly ...5 yearly .?!
That's very simple to answer: daily and weekly. Both Minervini and O'Neill use similar approaches and never go intra-day. Most analysis is done on the 1D, but the weekly is also useful. Normally the key weekly patterns are easily seen on 1D and vice versa.
It sounds like you read the part about being right 50% of the time, but completely missed the part on risk management. If he's right 50% of the time, but making twice as much when correct as he is losing when he is wrong, he's making money. Max 8% stop loss is applied, though he states the average loss is 4%-5%. Winning trades target 20%+.
i think Kape Technologies (LON:KAPE) looks good
N91 has created a IPO base, the handle was a bit too wide for me, so I haven't bought.
I came to a similar conclusion this morning. The volume is not particularly high and the fundamentals don't look too inspiring.
Nice set-up on £FXPO
Looks to be under the key moving averages
???
50 day MA 127p
200 day MA 145p
According to Stocko graph.
FXPO 50d is under 150d which is under 200d, should be the other way round, worst of all 200dma is trending down.
The key moving averages are all pointing the wrong way. Also looks like a fair amount of overhead supply on the left
I joined the MPA a few weeks ago. Some of Marks picks don’t always strictly follow his criteria. I’ve seen a couple in the past that don’t follow the moving average rules. Yesterday we also covered one that was on a downtrend but Mark liked the potential and it met his relaxed cheat criteria so he recommended it as a buy. It’s more art than science - I’ve heard him say that in some old tutorial videos too. He said yesterday he is strict with the rules when the trades aren’t doing well but when it’s easy dollar he can be a bit more flexible. The reason I mention this is because with the UK stocks I think we may need to be a little flexible (not too much). Any thoughts from anyone else on this??
I know which share you are refering to and I was very surprised that Mark put it on the buy list. In the past 2 years I have never seen Mark ignore his rules to such a degree. I didn't buy it. I can only assume it was a 1 in a 1000 trade that was made because other similar companies have performed so well recently.
I am willing to be a bit flexible with the rules (I bought CDM even though the base is very V shaped and SUMO when 50d was below 150d) but I don't think the U.K market is in a "easy dollar" environment yet.
Other Stocko subscribers please don't ask which share we are refering to as answering that would be a violation of the T&C's of MPA.
Would you say the cost could be justified? Its working out at about £400 per month and that would be on top of my MarketSmith sub which is a lot to make back. Bank size I guess comes down to a lot of it but just wondering if the info in there is worth the price alone.
Would you say the cost could be justified?
That is a question that is very personal, we all value things differently. Some people think £10 for a bottle of wine is a lot, others will pay £1000+ for a top producer. For me it's been worth it, not for trading profits in U.S stocks but for education and coaching.
Mark's performance has been independently verified as among the best in the world. If you wanted track driving instruction/coaching from Jenson Button how much would that cost? (If you could get it.)
It’s probably a bit early for me to really say. I have to say though that at this stage it feels like a lot of old videos to watch and Mark only attends a small portion of the one hour weekly sessions. I think yesterday’s one was pre recorded so he wasn’t there on the day. Plus there is no real way to interact with other members or ask questions outside or the weekly webinars. I haven’t had responses to my emails either so at the moment I’m not all that impressed. Saying all that I am learning a lot so hopefully it will pay off longer term.
Thanks. I will probably give it a miss for the moment and stick to his books and marketsmith.
If you ignore the valuations, Just Eat Takeaway.com Nv (LON:JET) has an interesting chart for an IPO.
7th May would have been a great time to buy, I missed it. I am undecided about whether I would trade a breakout from the high handle.
Agree. I bought some this morning with a stop at 81.9, being just below the high from January and also several times in April. I'm looking at the past few days being a pullback to this breakout. Time will tell.
I'm noticing a few companies share price consolidating around the 200dma (possible low cheats) examples would be KGH and NG. But the 50dma in both cases is currently trending lower.
I have fond recollections of £KGH , having made around 20% in a week back in January this year. I think it's time to be careful again over the next few weeks.
Re Knights Group (LON:KGH) - a break above £3.80 would signal a break above the rising wedge. I note 3 director buys £50k) at £4.20 9th March. pre COVID19 strong trading and some nice acquisitions.
It popped up on my amended GARP filter on sharepad over the weekend.
tried to post a chart but didn't seem to work.
Disc: no position
Im finding that the shares that my screens show up for these methods have very little volume and Im having more success in the US markets. Since starting doing this maybe about a month and half back Ive ended up with a shortlist of UK shares but again the Stockopedia volume charts make it a little difficult to read the correct volume unless Im missing putting some sort of moving average on it. Any unusually large volume makes the smaller ones very difficult to assess.
Anyway for what its worth the ones on my shortlist are Codemasters Group (LON:CDM) Integrafin Holdings (LON:IHP) Kainos (LON:KNOS) Pennon (LON:PNN) Tristel (LON:TSTL) Yougov (LON:YOU) Yourgene Health (LON:YGEN)
I missed the codemasters one as I simply could not read the volume, I think I missed the KNOS breakout but again the volume was so small and I have an entry point on Tristel if that manages to break.
Oh and I did go with Team17 (LON:TM17) but that did break back down on news so cut that at my stop loss.
Tradingview has free charts which have moving average for volume ( I use 50d), when you move the crosshair over a day the average volume and that days volume is shown.
Keen to know what platform are you using to trade the US markets? Exchange rate costs has deterred me
Ive been using Hargreaves Lansdown, Im too worried a little about the costs but until I come up with a better solution its what im going with.
Have you read the book,? If not you should before you employ his method. First rule , forget the rest, " Is the market healthy?" If thats a no then surely, irrespective of the views of others you shouldn't be investing!! Sometimes you make money by not investing!!! We are living in dangerous times capital can disappear very quickly.
Yet Minervini has been trading and he said “It's been a great trading rally; certainly an "easy dollar" environment, but not for the shorts.”
Yes Ive read both books. To be fair Im just reading what I think is my 9th or 10th book so it has been quite a learning experience and especially what I would imagine is a difficult time for investors. I took a lot of what he said to mean its about opportunity and trying to find out what is holding up well or recovering very quickly and as said above Minervini himself has been trading quite heavily according to his twitter account.
Somehow maybe more weighted towards the rally and luck rather than good picks Ive managed a healthy profit these past 2 months even withstanding quite a big loss from the last couple of days but from the books I feel the most important part is the risk managment sections and shares have been sold after hitting their stops, although I mistakenly went over my % targets as I hadnt allowed the fx fee but its a lesson learned for future, shares have been sold before getting close to their stops and profit has been taken from a couple of really good performing shares in what I was a sell half moment like advised in the book, one of those has now stuck and the other I completley sold out of yesterday after it dropped more but taking a healthy profit.
My friends think Im mad not holding sharespast my stops and averaging up rather than averaging down but Ive a good feeling that longterm it will be the right thing to do.
He says let Leading stocks guide you and not the index. If the set up is right he is buying. He has a lot of active long positions and is also shorting the index.
At the moment there isn't a consistent market, some sectors are bombed out while others are close to highs. I was surprised when Mark started buying when he did and I didn't follow him, however the past 5 weeks have been overall profitable for Mark. I still think a substantial pullback is likely so I am trading very lightly, currently about 8% invested. Mark has mentioned in the past that sometimes shares start to set up a lot earlier than than the overall market. Comparing the charts of Codemasters Group (LON:CDM) and GlobalData (LON:DATA) to AXX is a good example of this.
TM17 broke out on new highs end of April to over 600p. Looked a good entry, but then fell back to 515
No mention of BOTB here. Looks to be forming a stage 2 base. I am just curious if anyone else has looked at this one as it seems to be the most obvious MM style UK share I have found. Looking to add to my long position on this one.
maybe too illiquid following MM strategy. Tiny volumes shift this
Best Of The Best (LON:BOTB) looks like it has entered stage 2 but it hasn't really set up a pivot point. It was forming a handle around 450p but gapped out. Liquidity is very poor (50d av vol less than 5,000) as well which makes slippage on a stop loss likely.
I was having a look through this thread and find it hard to go through.
I wanted to see if there's any interest in a chat room so people can discuss things more easily so I've set one up on Slack.
Feel free to join:
https://join.slack.com/t/trend...
Broker FX rates have been discussed in the Slack link in post 1251 of this thread (which I've replied to here). Best ISA rate I know of is Trading212 who initially didn't charge a FX commission but now charge 0.15% or 0.30% round trip from this month. They're not accepting new accounts just now though and there's a waiting list you can sign up for but it might be worth waiting for if you want to reduce your FX charges.
Their are approx 6000 stocks traded in U.S, do you know how many of them 212 cover?
The Slack link no longer works.
Concurrent Technologies (LON:CNC) attempting a breakout
£CNC chairman sold £100k last week after it gapped up out of a handle on 23d April. Spread nearly 5%, too wide for me.
Looks like a VCP to me. Chairman's supply appears to have been absorbed. Spread is not a primary consideration in Minervini's chart analysis.
Looks like a VCP to me. Chart indicates that Chairman's supply has been absorbed. I'm not aware of spreads being a primary factor in Minervini chart analysis.
The spread is not an issue for Minervini in the American market, but wide speads in some small cap UK shares greatly increases the stop loss risk. This is an intraday chart of Concurrent Technologies (LON:CNC) with the buy and sell price added. With a breakout, you're probably buying at around 110. Your stop at the bottom of the handle is around 88 and I suppose you could risk around 95, both well over 10% from the buying price.
A dummy trade right now on HL is quoting a buy price of 103.9, quote sell price is 102. That's less than 2% spread.
Yes, the spread has tightened this morning which may be a good omen.
The problem I have with Concurrent Technologies (LON:CNC) is the chart is a bit messy on the right side. Has a cheat breakout occured when the price moves above 105.88 or 108.66p? Should a stop be placed just below 97.55 or 94p? Also liquidity is poor, average daily volume looks like it totals around £60-£70,000.
There appears to be some stock available for sale currently, just got quoted 102p for 25,000. The problem is what would you get bid if you needed to sell them.
CNC possible breakout?
Problem with Concurrent Technologies (LON:CNC) is it very recently rolled over to about 91p which is too wide an entry for me.
I have Avon on my watchlist. I’m waiting for a large volume rise above the current base before I buy in.
Beware repeated supply at 2840p - I'd be cautious of buying below that level. As Unwise mentions below, it ideally needs to tighten up a bit more. Bear in mind it could still break out on low volume.
Avon broken out with higher than usual volumes?
It gapped through the pivot and best not to chase when that happens.
Also too wide for a low risk entry.
Is Avon Rubber (LON:AVON) not setting up?
Most recent contraction was 12%, too deep for me. Centamin (LON:CEY) is over 10% as well.
CEY looks like a nice set up.
Is LUCE in play if the 150 and 200 day moving average is above the current price?
Have you read either of Mark's books?
Mark requires the share price over the 200dma and 200dma moving upwards. Ideally want 150d over 200d and 50d over 150d.
That’s why I was asking how Luce can be in play if it’s not over 150 and 200 MA. I thought maybe there was an exception hence why it was mentioned in earlier post.
Ah yes...technical analysis, the science of predicting the past ....
Well done. You've nailed it.
William O'Neil relied very heavily on TA:
https://www.businesswire.com/news/home/20100202006805/en/SLIM%C2%AE-Investing-System-Top-Performing-Strategy-12-Year-Independent
-Investor’s Business Daily’s CAN SLIM® Investing System was the top-performing investing strategy from 1998 through 2009, according to an independent, real-time study by the American Association of Individual Investors (AAII).
The study – which tracked over 50 leading investing methods through all the stock market’s ups and downs each month for the past 12 years, including the recent financial crisis – found the CAN SLIM system gained 2,763.3%, compared to a 14.9% gain for the S&P 500 over the same period; an average of 35.3% a year versus 3.3% a year for the S&P 500.
Mark's method is an evolution of O'Neil's. People frequently mock what they don't understand.
Kape Technologies (LON:KAPE) looks to be setting up well
Watching Housebuilders Barratt Developments (LON:BDEV), £TW, £PSN.
Pennon (LON:PNN) and Luceco (LON:LUCE) tightening up.
I seeBlackrock have made 3 purchases into Luce recently taking their holding up to 5%
Sorry for the confusion. When I messaged re LUCE I was meant to reply to this. I realised I didn’t press reply
Redcentric (LON:RCN) looks a good setup, and closed on good volume
Broke out on good volume.
Codemasters Group (LON:CDM) - similar behaviour seen in December and January. Volume is on the low side too. Could be setting up for an upward advance?
Codemasters Group (LON:CDM) just broken out on cue.
Liquidity is rubbish unfortunately. Struggled to buy any near the correct price point and ended up with less than I would have liked.It's annoying when you have been watching for a couple of weeks. The move to 284p on 28th April was on one tiny volume trade so I ignored it.
Bit daft for a £400m+ Mcap with 96% free float.
It looks like a false breakout to me. Volume is too low and a similar breakout on 6th april ended up with the price dipping back down
Not sure why you consider 6th April a false breakout, I didn't buy because CDM gapped out. Since then it has only pulled back to the previous pivot point.
I suspect volume is low today (but a multiple of yesterdays very low volume) because it's hard to buy any stock without forcing the price straight up.
Yes, nice move up. Unfortunately didn't get chance to buy. Will watch to see if there is a pull back on low volume and reassess risk / reward. Looks like some overhead supply around the £3 mark, though.
£cdm tightening up.
Just a quick question as I am very new to this and have just finished reading MM's second book after reading his first a couple of week backs so Im hoping its ok to ask it here. I am starting to understand the VCP patterns and are starting to see them in certain charts but what sort of time frame should I be looking at while looking at charts?
The reason I ask is that I feel I can either zoom in or zoom out of a lot of charts and start to see things that are not there but can make them fit to what I think I am looking for just by scaling the chart. Do people have a rough standard time frame to try and avoid this?
I look at 1 year daily charts and 5-10 year weekly charts*. Other experienced traders/investors might have different preferences. Make sure the charts have moving averages on them to confirm they are in an uptrend.
*shows "where are we on this mountain?" Book 1 pg 80.
In his books Mark uses a mixture of Weekly and Daily. Weekly certainly cuts through a lot of the noise and tends to keep you on the right side of longer term trends. I've read each of the first two books 3x now. Each time I pick up on something new. They are information dense it takes time to internalise the information. Or at least it has for me.
Sorry I don't think I were clear as I were not talking about daily or weekly volume but more for the actual timeframe of the chart(sorry if I misunderstood the replies though) as me looking at the last month or so gives me a totally different view to looking at say a fortnight or a year so theres a chance I could be seeing things to fir the ideas in my head rather than something that is not actually there.
You need to look 6 months back and more - bases and their vcp patterns take at least a month to form, the longer the better. Even powerplays need a minimum 4 weeks to set up.
The markets have continued climbing in a V shape despite terrible economic prospects for the rest of 2020. I am very sceptical of markets returning to the highs without any major pullback.
There have been some stocks setting up so I have started taking a few small positions. I expect most to get stopped out, but I am trading the setups not my opinion of the overall market.
I have also read MM's books and found them to be a good source of information along with O'neill and Livermore though I am not a fan of his manic twitter'ng to me it comes across as a rabid salesman.
Regarding opportunities on the FTSE I follow some of the ideas that MM mentions such as sectors that do well in a tough market. In the US it has included Nasdaq and bio companies and he has tweeted he has bought some. But here in the UK there have also been some good opportunities (I noticed they are not really mentioned on this thread maybe they don't fully adhere to MM rules but neither do I) > Trading companies (Plus 500 etc) > Pharma (AZN etc) > Gold (Poly) > Even food (PFD) - All of them have broken out and I have small long positions in some of them. But also like MM I hold some shorts as I am really a bear at t he moment (in my case travel and leisure and finance as a short proxy of the market).
I know $ZM is really hyped because of the home working situation but it looks like it broke out of a cup and handle? Does this qualify and have I missed the breakout or is this still in play. Thanks
Interesting one. If I recall, MM went into $ZM c. 20 March breakout so I guest he'd say it's now a little extended. He would also be highly unlikely to buy after yesterday's 12%+ rise. Price rise since late March, while not quite V-shaped, is quite steep. However, yesterday's volume was impressive and suggests institutional accumulation. In these volatile times it could go either way - note the ~30% drop during late Mar-early May!
You are correct but the handle was 11% deep so you would have had to use a mathematical stop instead of a technical one. The base is also V shaped which isn't ideal. It may form a high handle around $170 and provide another buying opportunity.
I would be grateful if posts about U.S stocks were put on the U.S thread, I would like to keep this one about the U.K.
Sorry, my bad. I didn’t realise there was a separate US thread. I’ve found it now.
Do you have a link to the US thread as I can't see it?
It’s not really active. Last post was over a year ago...
https://www.stockopedia.com/content/trading-us-stock-market-using-mark-minervini-methods-459993/
Thanks, I did not look that far back. I have posted something there so hopefully it will generate some interest.
It seems a bit of a coincidence that a few minutes after I comment on TM17 the price moves above 575p (it wasn't me).
Maybe I'm paranoid but on my L2 feed I saw market makers move the ask to 580p from 570p, guaranteeing another buy would push the price above 575p.
GlobalData (LON:DATA) has formed a low cheat, I thought about buying it 2 days ago when it moved through 1120p, but it has bad liquidity, large bid/offer spread and a poor balance sheet.
Has TM17 not completed a VCP?
Also GILD in the US?
I think £TM17 does look like a VCP, but it hasn't yet moved above 575p. I would prefer it spends another couple of days between 545-575p or it sets up a handle around 590p.
P.S anyone know why the pound sign isn't working?
It does not seem to work if there are numbers involved. I thought they had fixed this it seems not.
I'm seeing a number of charts similar to Globaldata (LON:DATA) with consolidation after swift rebound. Codemasters Group (LON:CDM) is another example which looks like breaking to the upside. Computer gaming must be doing well during this period.
I was watching Codemasters Group (LON:CDM) at the beginning of April but it gapped out of the low cheat. There are now a few technical setup's which are close to buyable, my concern is if we get a general market pullback most or all of your stops are likely to get hit. I have had plenty of injury by dozens of paper cuts in the past 2 years.
Thanks Unwise. I was a little nervous posting the bit about TDOC because I’m so new to this and thought I would be way off the mark. It’s reassuring to see I was close. Will be interesting to observe proper VCP stocks.
Mark did a vote yesterday on Twitter asking if people thought the Dow would re-test lows first or go to new highs. The result was 60/40. From his tweets recently I get the feeling he is still not ready to start going long properly. Maybe a few here and there but nothing like normal. The market trend isn’t clear at the moment.
ITM is building a classic vcp pattern, problem is the pivot is way too wide for a low risk entry - a common theme in the market at the moment, too much price volatility for tight stop trading.
https://www.stockopedia.com/sh...
XLRN is another one he holds.
Thanks, herbie