A,AEM,BCS,BID,CBS,CTRP,ERIC,ESV,GG,GU,NSM,PKG,PXP,SINA,
SOLF,STO,STV,VISN,WGOV,WY
GG (gap up)
An interesting one this, as it's a pattern I don't see that much any more, but when I was paper trading last year it did give very good consistent results when it occurred.
First candle is hammer like and thru previous day's high. We then have tight sideways consolidation in a channel between previous day's high and the OR. The 5th is bullish bouncing of prev day's level and closing above the OR as well as closing strong itself. This is our trigger.
Entry: 39.74 Stop: 39.33
Fib Ext: 40.17
1R= 40.15 2R=40.56 3R=40.97
The candle after entry is good adding confidence to our trade. I took partial profits at the Fib Ext since we were in the decade $40 area and left the rest to run. This was closed when we broke back down and closed below the $40 level. So a small gainer, which is ok.
ESV (gap up)
The first candle is not ideal and I came close to ditching this from my watchlist. But since I wasn't watching many I left it in (unfortunately, as it turns out). After the first, we pull back and find support at the ema. The 7th candle is bullish, off the ema and closes strong just above the OR. This was my trigger.
Entry: 70.40 Stop:69.90
Fib Ext: 71.47
1R=70.90 2R=71.40 3R=71.90
The candle after entry was also promising, closed strong and hammer like. But that's where the story ended as the next candle was very weak and closed back ino the oR. So we closed for a loss.
This chart does illustrate how important stops are (or indeed exiting earlier if trade does not work out as planned), since it fell thru $70 easily and just kept going south.
Overall a tough day with not much going on and not much in way of profits. I did enter another trade on PKG, but it never triggered.
6 comments:
TR: a real crappy day. Hope you had better luck.
On the lighter side, what trading related books have been the most influential in your career?
Do you have a trading mentor? And if so, how did you acquire him or her?
Ralph
Ralph, good questions.
TR, what are your thoughts on SLW. I used the 10:30 inside NR7 bar as my trigger. Obviously it didn't work out, but wondering if you saw any red flags as to why it might have failed.
Also, any thought on the 2:45 candle on WGOV. Am I just pushing for a trade here?
ralph.
Not an easy day to trade, but it happens, so keep the faith.
Books > Trading the Zone, Market Wizards, Nasdaq Traders ToolKit
Mentor > Nope, don't have one.
pdt
SLW > Missed that one my scan, but a promising pattern. The 10:30 candle red flags are ema distance and we are still inside the OR, so highe risk. A better choice imo is the 7th candle green hammer which breaks the OR and closes strong. Depending on how much you allow for leeway, this may ormay not have triggered. In any case it would also have been a loser.
WGOV > Yes a trade is there, however it is late in the day and I don't normally enter a trade in that timeframe. Having said that it did work and would have given good rewards. Good call > did you trade it ?
Well I did trade it, but it was a paper trade at that point :) Unfortunately my SLW trade was with real money. It always seems to work like that.
By the way there is a typo on ESV trade. You refer to the 6th candle when in fact you mean the 7th.
Do you generally go for setups like this where a bar that just barely breaks the ORH becomes your trigger. I know its a strong bar but you are almost guaranteed to be filled on the next bar because the bar closed at its high and the next bar will open at that level. Also at that point the stop is pretty wide.
That said, the 8th bar would a "good" trigger because it was more of a confirmation... but look how that turned out.
Thanks for your insight.
pdt.
Thx for typo note > now amended.
Yes, if it breaks OR and fits my criteria I generally trade it. A wider stop means I will buy less shares.
I agree the 8th is also a good trigger, but looking at the prices the following candle would not have opened a position.
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