Updates on GEO and MBT, Position Sizing  

Posted by Book Eater in ,


Updates on MBT:

I show below a graph of MBT. I traded this when I listened to Mr. Fitz's recommendation last Wednesday. Today however, looking at the charts. This is going to have a very hard time going up. What I usually do when market is uncertain is to stay away, perhaps like most people. So, today, I'm staying out of MBT, from purchase price of 45 with a TP of 50. cutting the loss to 43.50 or 43 today. It couldn't get past previous highs and closed at the lows showing weakness. All other technical indicators say so as well.

Updates on GEO:
The downtrendline of GEO is still intact. The 1.46 price that happened just this tuesday was a valid break of resistance, however it retreated to close at 1.30, a crucial support line. Yesterday, the stock showed further weakening falling intraday to as low as 1.26

My recommendation: Lighten for a while but take a good watch as prices still made higher lows and are above key support levels of 1.24 . A possible move will be to sell at prices close to 1.30 or higher as much as possible, and wait for re-entry from a successful bounce of 1.24 (even if its just an intraday thing.)

If this falls near 1.18, we can see the stock drift sideways with a range of 1.12 to 1.18 again with heavy resistance at 1.22, however, since we haven't entered that scenario. Let's not exit all our positions just yet.

Also, momentum indicators : RSI and MACD still point to a divergence indicating some more upside.

If this holds, don't panic sell yet. Just lighten. Take a look at Double support trailing stops below. Will help in position sizing.

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Taken from Rob Hana of quanitifiableedges.blogspot.com and told by my ahia david to me during a conversation about my bad entry point and wrong position sizing with GEO. Pretty helpful. Read up.

Whenever we trade---size the position using a break of the double support trailing stop. Here's how it works:


The Double Support Trailing Stop
by Rob Hana
The Concept
Like most traders, I have a whole checklist of criteria that must be met before I will consider purchasing a stock. I spend a substantial amount of time researching potential candidates so that I may find a few stocks that meet my criteria. One of the most frustrating and difficult things for me is finding a great stock, buying it at the right time, and then being stopped out of it just before it reverses and goes on to huge gains. Having traded in multiple time frames over the years I have experienced this frustration with day, swing, and intermediate term trades. To keep myself in winning trades longer and avoid being shaken out early, I developed my “Double Support Trailing Stop Technique”. I will show an example of this technique on an intermediate term trade, but have successfully employed it in many different time frames, and originally created it for my day trades.

The idea is simple. If I require a large numbers of reasons to enter a trade, I should require more than just one reason to exit it if I want to catch as much of the move as possible. I will therefore require two levels of support to be broken before I will PERMANENTLY & COMPLETELY exit a trade. How you define support does not really matter. You can use pullbacks, consolidation lows (or highs), fibonacci’s, moving averages, trend lines, or whatever fits your trading style.

for more info, just go to his website. Thanks.


- Nix

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