Wednesday, 20 February 2008

Trades 20/Feb/2008

Watchlist:
BHP,CCL,COH,CROX,CSIQ,CY,DSX,GSK,ING,JAKK,KEY,LDK,LEN,NTRI,NVDA,OIS,NTRI,NVDA,SPWR,STP,TRAK,T,VOD,WFMI, WFR,WLT,XEC,YGE

Unfortunately I had to limit my trading today as busy at work and various meetings etc. But a few trades and some charts to follow.

TRAK (gap down)


First candle was bullish, but then we started to retrace back down towards the OR Low. The 5th candle crosses the OR Low and closes at its low. This is our trigger candle.

Entry: 21.02 Stop: 21.65
Fib Ext: 18.79
1R=20.39 2R=19.76 3R=19.13

The price trends down and once it reaches the 1R level I moved my stop to breakeven. I did think about taking partial profits at 1R since we were getting close to the decade $20 level. But in the end I was stopped out for breakeven. If anyone has any comments on how I could have managed this exit better, please post.

VOD (gap down)


AFter the gap down, the stock pretty much went sideways as we approached the ema. The 6th candle crosses the OR low and closes below it. If you made this a trigger candle I wouldn't argue. I decided to wait to see what the next candle did. It was a more bearish candle and the longish wick bounced off the ema above it. I used this as trigger candle to go short.

Entry: 31.40 Stop:31.62
Fib Ext 30.78
1R=31.18, 2R=30.96, 3R=30.74

My entry turned out to be close to the lows as it then performed a shallow turn and headed back up. The 10th candle was bullish and closed above the OR low. I closed my position there for a loss.
You could point to the 3rd candle as a bullish indicator to maybe rethink a short ?

OIS (gap up)


This is an interesting one since it allows us to discuss market direction and whether you could use it as part of your entry criteria. (Note: that TraderX did not use Market direction). I don't use it as a rule, but it did influence my trade here.

The first bar is strong and green. The 2nd is red and longish wick, which can be bullish if it's high price is broken on the next candle. In addition the 2nd candle is in the top portion of the 1st candle. So did we go long on the 2 bar break ?
Well I didn't. The fact that the candle was red combined with the fact that the market at that point was firmly in the red influenced me. And as you can see the the price went up a point from there.

Subsequent to this rise, we then have a retracement back to the OR high and a bounce at that level. See how the 7th candle is red, it does pierce the OR high but still closes above it. We should now be interested and see what the next candle will do. The 8th candle is a NR7 and green and opens and closes above the OR. This is our 2nd chance trigger to go long.
I didn't trade this though as I was away from my PC due to work.

Hope you found this post useful. And hopefully I can concentrate more on my trading tomorrow.

3 comments:

bl said...

Good analysis. I sometimes find a big market gap down can mean a reversal coming. As for VOD there were a few telecom down grades this am and sometimes that works wonders on the short side: s t sbak q vz. VOD and TRAK look like TraderX set ups: break of the OR but then the market reversed. GRMN a few times for small gain. Brokers reversed at the open for some good gains leh $4

OONR7 said...

position size and stops are probably to two most important aspects of daytrading that any trader needs to understand. Another which I find to be just as important is the strength and/or weakness of entry candles. Specifically... if I'm going long, I want my entry candle to have little to no upper wick. Vice versa for shorts. So, I think the lower wicks on VOD would have prompted me to stay out and look for a better entry. With OIS, if the 2nd bar was closer to the 5ema, it might be a good dummy entry. However, the second entry you noted I've seen plenty of times before. Instead of taking the long off the reversal bar when it comes back down to the ORH, I now wait for confirmation after the reversal bar. So, I would look for a NR up bar after the reversal bar to go long. Sometimes when a stock comes back down and pops at the ORH, it's just a temporary pause or consolidation that leads to choppy price patterns or a quick move below the ORH.

TraderIAm said...

Thanks bl and oonr7.

Useful comments from both.