Hi All,
back again to my technical analysis blog.
Right now I want to share to you about the powerful Profitunity Trading System (created by Bill William). Some of you might have heard this system. If not, you can read the book "Trading Chaos" for your home learning process. It's very widely used in forex trading but can be also applied in stock trading.
Bill William actually told us not to trade if the price is under the alligator, because the profitunity trading system basically is trend trading system. But, there are exceptions, which one of those is Wisemen 1 (W1).
If there is a bullish divergent bar (lower low bar and close in the upper half of the bar), we have to see AO still red and below 0 plus there must have angulations between price movement and the alligator mouth.
Because the W1 is counter-trend trading, we have to be very careful by trade only small position. It's a gambling phase buy it can be "the best position in the world" says Bill.
Yesterday, I found so many long shadow candle, but, are those candle apply as W1? I'll show you some which apply W1 condition, as follow:
1. ANTM
Buy stop: 2275 (1 tick from high of divergent bar)
Stop loss: 2150 (1 tick lower from low of divergent bar)
Risk: 125 (5.50%)
2. INTP
Buy stop: 13650 (1 tick from high of divergent bar)
Stop loss: 12700 (1 tick lower from low of divergent bar)
Risk: 950 (6.96%)
3. ITMG
Buy stop: 48450 (1 tick from high of divergent bar)
Stop loss: 43650 (1 tick lower from low of divergent bar)
Risk: 4800 (9.91%)
4. SMCB
Buy stop: 1980 (1 tick from high of divergent bar)
Stop loss: 1860 (1 tick lower from low of divergent bar)
Risk: 120 (6.06%)
5. SMGR
Buy stop: 8000 (1 tick from high of divergent bar)
Stop loss: 7200 (1 tick lower from low of divergent bar)
Risk: 800 (10.00%)
Now, after we look at those potential opportunity stocks, we have to choose and apply money management that fits to our risk profile.
The questions is, how much is the target reward? Because this system is trend-following strategy, there is no target set at the beginning, but we have to let the profit run until the chart says to exit. Moreover, we also have to enter another buy signal Wisemen 2 (Super AO) and Wisemen 3 (Fractal) if exist.
We will study W2 and W3 later on, I'll post it whenever the signal occur.
Happy trading...
Regards,
JNS
~We do our best and GOD will do the rest~
