Real-Time Comments for ALTR on Breakout Trade

11/14/00  <Chris>  Watching: ALTR  Near high 30 pullback now
11/14/00  <Chris>   10:28:22 mini range on ALTR is 29 11/16 to 30
11/14/00  <Chris>   10:28:47 if we get pace at 30, consider entry no higher than 30 1/16 with stop at 11/16
11/14/00  <Chris>  Consider Buying: ALTR  30 stop at 29 11/16
11/14/00  <Chris>   10:32:00 need move at least to 30 1/2 to make it worth risk
11/14/00  <Chris>   10:32:32 any move to near 30 1/2 and scalpers exit...holders look to exit at least 1/2 and raise stop to breakeven
11/14/00  <Chris>   10:34:18 scalpers can take 1/4 on ALTR
11/14/00  <Chris>   10:34:22 it's struggling
11/14/00  <Chris>   10:34:30 holders raise stop to 29 13/16
11/14/00  <Chris>   10:38:13 ALTR held 29 13/16..if we break 3/8, exit at least 1/2 shares into any volume spike
11/14/00  <Chris>   10:39:10 ALTR 1/2 shares should be exited here over 30 1/2
11/14/00  <Chris>   10:39:16 raise stop to 29 15/16
11/14/00  <Chris>   10:42:37 on remaining ALTR anything near 31 and exit remaining shares
11/14/00  <Chris>   10:44:00 if ALTR sells 30 1/4, exit this one as well
11/14/00  <Chris>   10:46:28 ALTR 30 3/4 to 31 area for remaining shares
11/14/00  <Chris>   10:46:31 exit as you wish
11/14/00  <Chris>   10:48:34 ALTR is in area for exit
11/14/00  <Chris>   10:48:39 offer it out
11/14/00  <Chris>   10:51:09 I'd be out ALTR at 7/8 or better

Training Session Describing ALTR Breakout Trade

11/15/00  09:28:25  <Chris>  Today I want to do one of our Practical Tape Reading classes using yesterday's alert on ALTR.
11/15/00  09:28:38  <Chris>  Please bring up the chart on ALTR at www.realitytrader.com/calls/altr.htm
11/15/00  09:29:32  <Chris>  Let's first look at the time period just before 10:30 where the stock moves from 29 1/2 to 30 on a relatively good volume spike.
11/15/00  09:30:14  <Chris>  Unfortunately I missed the pickup in pace at the 29 1/2 level so there was no entry alerted at this price.
11/15/00  09:30:39  <Chris>  Howeve, what we saw next was a nice tight range after the volume spike.
11/15/00  09:31:03  <Chris>  The shallow pullback and absorbtion of selling was nice to see for a possible continuation of the uptrend.
11/15/00  09:31:33  <Chris>  We allowed the stock to define it's range from 30 to 29 3/4
11/15/00  09:32:24  <Chris>  In our principles and scenerios of the workbook, we have Range Trading as a scenerio.
11/15/00  09:32:35  <Chris>  In this case, a trader has 3 choices.
11/15/00  09:33:09  <Chris>  First choice is to short the high of the stock mini range, this case nearest 30 and expect a downside move under 29 3/4.
11/15/00  09:33:43  <Chris>  However I am less inclined to hold such a short for more than a scalp for two reasons.
11/15/00  09:33:55  <Chris>  First reason is the stock is moving in an uptrend.
11/15/00  09:34:19  <Chris>  Trying to short the stock in an uptrend on no ""euphoric"" buying is fighting the trend.
11/15/00  09:34:55  <Chris>  We did see a volume spike yes and most likely this is the best place to short, however, in an uptrend, shorting that volume/price spike is for scalp only.
11/15/00  09:35:12  <Chris>  And to be honest, not one of my favorite setups to trade.
11/15/00  09:35:42  <Chris>  So the first choice of shorting the stock is for experienced traders only that realize how to scalp into a price spike/volume spike of the stock.
11/15/00  09:36:05  <Chris>  Second choice of the trader is determining the stock's trend, in this case, the uptrend.
11/15/00  09:36:26  <Chris>  In this case they want to buy the bottom of the mini range
11/15/00  09:37:00  <Chris>  in this case no higher than 29 13/16 with stop at 29 11/16 or at least selling at 29 3/4.
11/15/00  09:37:16  <Chris>  In the real time alerts, we used 29 11/16 for this case.
11/15/00  09:37:34  <Chris>  If the trader decides to scalp within the range, make sure you assess your risk reward.
11/15/00  09:37:51  <Chris>  our range is 1/4 point and you are willing to give up 1/8 point in loss.
11/15/00  09:38:25  <Chris>  If you buy the stock at 29 13/16 and try to sell at 15/16 using more conservative executions
11/15/00  09:38:30  <Chris>  your risk becomes 1/8 for 1/8.
11/15/00  09:38:35  <Chris>  Is this viable?
11/15/00  09:38:50  <Chris>  I guess so if you are one that trades 1000 shares.
11/15/00  09:39:16  <Chris>  However, I'd refrain from trading within such a tight trading range if you are not comfortable trading this size lot.
11/15/00  09:39:26  <Chris>  Assumign your intention is to scalp within the range.
11/15/00  09:40:07  <Chris>  Therefore, we've cut out the short opportunity as well as the trading within the range opportunity aside from those that are willign to trade larger lot sizes.
11/15/00  09:40:17  <Chris>  This leaves us with breakout of the high trade.
11/15/00  09:40:54  <Chris>  In this case, the trader can still bid the stock 3/4 to 13/16 and keep stop at 11/16 but instead of scalping the trade, either hold for breakout or take flat to small loss.
11/15/00  09:41:14  <Chris>  The other side is to wait for volume pickup at the high and buy the breakout.
11/15/00  09:41:37  <Chris>  One more thing...Threei said earlier in today's trading session.
11/15/00  09:41:53  <Chris>  Bidding the low of the mini range assumes bid strengthening.
11/15/00  09:42:30  <Chris>  If the bid appears to be weak and that a break of the low is imminent, then we need to realize greater potential for the stock to not hold the low of the mini range and pull our bid.
11/15/00  09:42:52  <Chris>  For this reason
11/15/00  09:43:15  <Chris>  I'd like newer traders that are not as confident in their reading of the tape or level 2 screen to back off bidding such a trade for now.
11/15/00  09:43:38  <Chris>  We will help you along in your trading to become more confident in:
11/15/00  09:43:51  <Chris>  1. Seeing the setup that it is reasonable to bid the low
11/15/00  09:44:02  <Chris>  2. Executing the order with confidence.
11/15/00  09:44:12  <Chris>  Back to third case, buying the breakout price.
11/15/00  09:44:39  <Chris>  This breakout to be honest was tough.
11/15/00  09:45:01  <Chris>  The entry at 30 level I am not sure if it was possible for many.
11/15/00  09:45:18  <Chris>  I did see 5 MMs and INCA and REDI on the ask at the time I gave the alert.
11/15/00  09:45:26  <Chris>  From this point, INCA and REDI disappeared
11/15/00  09:45:42  <Chris>  NITE was left with showing 500 shares
11/15/00  09:45:51  <Chris>  other 4 MMs were showing 100 shares
11/15/00  09:46:00  <Chris>  it didn't take long for the ask to get eaten on buying
11/15/00  09:46:08  <Chris>  and I'd assume SOES orders were not filled
11/15/00  09:46:15  <Chris>  possibly a few SNET orders were filled
11/15/00  09:46:27  <Chris>  but majority had to look the level above at 30 1/16
11/15/00  09:46:37  <Chris>  This is where I entered.
11/15/00  09:47:00  <Chris>  I didn't try 30 so I wasn't sure how easy it was
11/15/00  09:47:18  <Chris>  but 30 1/16 was attainable.
11/15/00  09:47:27  <Chris>  As we can see on the chart
11/15/00  09:47:41  <Chris>  the entry of 30 had a spike to 30 1/4 to 5/16 area
11/15/00  09:47:44  <Chris>  and got stuck
11/15/00  09:48:12  <Chris>  At this point of the trade, when it was looking as it the breakout was goign to be weaker..we wanted to have scalpers exit on this pause
11/15/00  09:48:24  <Chris>  Looking back, the risk reward scenerio isn't great
11/15/00  09:48:35  <Chris>  we had 5/16 stop to 1/4 point gain tops for scalpers
11/15/00  09:48:58  <Chris>  I want at least a 1 to 1 risk reward in the trade.
11/15/00  09:49:08  <Chris>  I've already assumed the risk of a 5/16 stop
11/15/00  09:49:29  <Chris>  as a speculator, we assume risk before we enter the trade and take it when the order to enter is filled.
11/15/00  09:49:37  <Chris>  gamblers create the risk, we assume them.
11/15/00  09:49:57  <Chris>  So for scalpers, this trade, while positive, wasn't great risk reward
11/15/00  09:50:06  <Chris>  and is a case to reflect upon
11/15/00  09:50:13  <Chris>  I talked to one trader in afterhours yesterday who scalped it
11/15/00  09:50:26  <Chris>  and said as it broke 30, his expectation was for scalp
11/15/00  09:50:31  <Chris>  and any retest of 30 and he was out
11/15/00  09:50:38  <Chris>  this is fair in my opinion.
11/15/00  09:51:08  <Chris>  So to move away from the scalper scenario, let's look at how we exited with those that wanted more than a scalp.
11/15/00  09:51:27  <Chris>  We still had our low of the previous mini range at 29 3/4.
11/15/00  09:51:36  <Chris>  stop no worse than 29 11/16
11/15/00  09:52:03  <Chris>  On the first pullback of the trade after topping at 30 1/4 area came to a level of 29 13/16.
11/15/00  09:52:10  <Chris>  Then upticked off this level.
11/15/00  09:52:25  <Chris>  In this time frame, this is where I have my raised stop.
11/15/00  09:52:40  <Chris>  If we can't hold 13/16, then I'm less convinced that his breakout will continue an uptrend.
11/15/00  09:53:09  <Chris>  As you can see, the 13/16 level held.
11/15/00  09:53:25  <Chris>  Next we have the pink line moving up.
11/15/00  09:53:46  <Chris>  This shows a moderate price spike into which we want to sell at least 1/2 our shares.
11/15/00  09:54:11  <Chris>  The red circle shows the area 30 1/2 to 30 5/8 is where we'd want to exit at least 1/2 shares.
11/15/00  09:54:16  <Chris>  When looking at the trade
11/15/00  09:54:36  <Chris>  30 5/8 wasn't clear that an offer would have been taken out using ISLD order or other ECN
11/15/00  09:54:42  <Chris>  30 1/2 was certainly possible.
11/15/00  09:54:51  <Chris>  30 5/8, maybe if you were early this was possible.
11/15/00  09:55:11  <Chris>  So using the principle of price spike, we exit 1/2 the shares at least.
11/15/00  09:55:39  <Chris>  It's okay for holders to exit the full position at this level since now we have the risk reward scenerio fullfilled.
11/15/00  09:55:47  <Chris>  And more to this point.
11/15/00  09:55:56  <Chris>  Threei discussed a few weeks ago
11/15/00  09:56:03  <Chris>  to reverse a losing streak
11/15/00  09:56:12  <Chris>  or rebuild confidence in your trading
11/15/00  09:56:34  <Chris>  taking surest profits (although smaller for now) is a good way to get back into the right mindset.
11/15/00  09:56:59  <Chris>  And at these points of price/volume spikes, this is perfectly fine to take full shares to rebuild your proper mindset.
11/15/00  09:57:10  <Chris>  Once you feel confident in being able to take surest profits,
11/15/00  09:57:24  <Chris>  then you can progress further to the process of taking 1/2, holding 1/2.
11/15/00  09:57:56  <Chris>  After we took 1/2 shares at the 30 1/2 area, we had another shallow pullback.
11/15/00  09:58:12  <Chris>  Selling again was being absorbed, forgive me as I do not remember who was supporting it.
11/15/00  09:59:16  <Chris>  After the break of 30 1/2, we raised our stop to just under 30, the previous breakout level which I wanted to serve as support. Any selling at 30 and I'm not turning 1/2 point profit into more than flat to 1/16 loss on remaining shares.
11/15/00  09:59:57  <Chris>  After selling was absorbed and we tested the 30 5/8 level again, we broke that level.
11/15/00  10:00:05  <Chris>  You will again notice a large volume spike on the chart.
11/15/00  10:00:35  <Chris>  Relating to tape reading principle, we want to now look to exit the remaining shares on this larger volume.
11/15/00  10:00:48  <Chris>  We chose an area of 30 3/4 to 31 as a reasonable exit area.
11/15/00  10:01:18  <Chris>  On the break of 30 3/4, the stock hit a high of 31 but again.
11/15/00  10:01:39  <Chris>  I am uncertain that the trader could have offered it out at 31 and been hit on the volume spike.
11/15/00  10:01:52  <Chris>  There were plenty of sellers on the ask at 31 that you would have competed to sell shares.
11/15/00  10:02:11  <Chris>  FBCO was holding it nicely at 30 7/8 by himself.
11/15/00  10:02:15  <Chris>  Showing 500 shares
11/15/00  10:02:17  <Chris>  and reloading
11/15/00  10:02:29  <Chris>  SNET PREF for your order and you had a good chance to exit.
11/15/00  10:02:44  <Chris>  If no fill and he let off, 20 3/4 had 4 MMs and 1 ECN to try
11/15/00  10:03:12  <Chris>  next time I'll try to get Level 2 shots, but it's hard at times when the trade is moving to get screenshots of the level 2 if pace is fast
11/15/00  10:03:40  <Chris>  So we exit remaining shares at 30 3/4 to 31 area, taking 30 7/8 pretty easy.
11/15/00  10:04:02  <Chris>  Easy exit I mean
11/15/00  10:04:06  <Chris>  Not easy trade :)
11/15/00  10:04:34  <Chris>  As we look at the chart later, the next 15 minutes or so shows a climb to 31 1/2.
11/15/00  10:04:48  <Chris>  So by exiting into that volume spike, we left about 1/2 on the table.
11/15/00  10:05:04  <Chris>  However, on a breakout trade, we never know how far they go.
11/15/00  10:05:31  <Chris>  Trading within these ranges, trailing stops and following tape principles according to the price and volume.
11/15/00  10:05:37  <Chris>  We can bring an order into our trading
11/15/00  10:06:00  <Chris>  and let the rest of the profits go to those that have a bit more strength to hold for extra gains.
11/15/00  10:06:36  <Chris>  I think with that, I'm done with this chart.
11/15/00  10:06:42  <Chris>  If there are any questions, I can take them now.
11/15/00  10:06:50  <Larisa>  [12:37] <Chris> We allowed the stock to define it's range from 30 to 29 *
11/15/00  10:06:51  <Larisa>  [12:39] <Chris> ** the stock is moving in an uptrend.
11/15/00  10:06:51  <Larisa>  [12:45] <ennui> what made ALTR an uptrending stock was that it was higher than it opened when we were looking to trade it?
11/15/00  10:07:47  <Chris>  The chart I before the 10:30 period I think shows a bottom near 29 level
11/15/00  10:07:50  <Chris>  if I'm wrong
11/15/00  10:07:59  <Chris>  please tell me, don't have the chart in front of me
11/15/00  10:08:24  <Chris>  the reversal from the selling at the open and then move towards that open price of 30...break of 30 shows continuation of uptrend.
11/15/00  10:08:39  <Chris>  If I had the whole chart for you to see, it would be easier to explain.
11/15/00  10:08:49  <Chris>  I can do it afterhours during our Q/A session if you like.