AAUK,ACI,ANN,AUY,AZN,BK,BMC,C,TRA,DRYS,ELN,FDG,FII,GGB,
GRA,HUN,KLAC,FMCN,NVS,PBT,PDCO,SCSC,SGP,SID,SOLF,UBS,WYE
WYE (gap up)
First candle is red but with a tail, so exhibiting some bullish behaviour. The next two candles trend up and then the 4th breaks the OR and also closes strong. This is our trigger. Ideally I would have liked the ema closer, but the general market was still strong, so a risk worth taking.
Entry:43.54 Stop:43.19
Fib Ext: 43.99
1R=43.89 2R=44.24 3R=44.59
We move up after entry then consolidate sideways briefly. The good sign is that this brief consolidation/pullback finds support at the ema and then continues rising increasing our confidence in this trade.
We take partial profits at the Fib Ext (around 1R) and leave rest to run. I closed the rest at 44.54 since it was a $1 gain. It is purely luck that this happened to be the high of the day. The truth of the matter is that I was travelling home, so left the take profits order in IB.
GGB (gap up)
An indecisive first candle is followed by a quick look outside the OR before we pullback on the 3rd candle. Then we have a trend up along the ema. The 7th is a NR7 which closes above the ema. This is our trigger for a long.
Entry: 37.49 Stop: 37.32
Fib Ext: 38.50
1R=37.66 2R=37.83 3R=38
We trend up slowly, which looked promising initially. But there was no follow thru and it turned round and came back to stop us out for a loss.
PDCO (gap down)
The first candle is red WRB weak. The 2nd is narrow and closes below the OR. The 3rd is a red dragonflyish which is bearish, it rejects the OR after a test, and it closes below the OR and it closes weak itself. This is our trigger candle. Again the ema is not as close as we would like, but the weakness in the previous candles made it worth the risk.
Entry: 35.49 Stop:35.80
Fib Ext: 34.98
1R=35.18 2R=34.87 3R=34.56
After entry it's all downhill as we fall quickly in consecutive candles. We take partial profits at Fib Ext (around 2R) and leave the rest to run. The 8th candle was a potential reversal signal and its high was near the whole number $35.00. So I trailed 1/2 stop at $35.10 and rest at breakeven, both of which were hit in the bullish next candle.
The above were the only 3 trades I made. But a quick look at one other chart which I was watching and some traders I know traded it for good profits.
KLAC (gap up)
This is a nice pattern, which shows an orderly pullback after the 1st candle then a trend up the ema. The 8th candle is a NR7, but it didn't close above the OR. I did briefly think about using it as a trigger, but decided to wait. The next candle was bullish but it had a much larger range, so I didn't bother chasing it after that. Looking at the chart in hindsight it still would have been good for 1R gain.
Overall, not a bad day. Maybe a slight feeling that I had some luck going my way today e.g. the LMT take profit order on WYE and the two trades which were away from the ema both worked out for good gains, whereas maybe on other days they could have reversed on me.
4 comments:
What's your opinion on WM? The 5th is an IB and a hammer on the 5ma and also closed above the OR. It was a a 0.15 stop for about a 10R's trade.
any reason that you see not to take it?
hello pitbull
It certainly does fit the pattern as you describe and would have been a good trade. I would not have traded it for the following reasons:
1. The stock is priced below $15 so it would not have appeared in my scan.
2. Aside from Point 1 above. The first bar closes in yesterdays' range. So i would have discarded it from my watchlist.
3. The trigger bar 5th is still further away from ema than I would like. This is a minor point however.
Please note however, that my method is TraderX with some personal modifications. Consequently, I would agree that it is a good "TraderX" trade.
TR, great trading and analysis!
I caught klac on the 5th bar/15 min. Liked the orderly pullback, and hammer bounce off the 5ema. Also, the 15min ATR was $0.35 and volume at entry was > than 50day average. Exited at the 38% fib ext.
Ralph
Nice trade Ralph.
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