First candle red and fails to hold yesterday's low. The 2nd is weak and breaks the OR. We then retrace back into the OR. The 5th resumes weakness and breaks the OR. The 6th is very weak and stays below the OR. It is off the ema and closes weak itself. This is our short trigger. I did hesitate a bit on the range of this bar, but in the end thought it was worth the risk.
Entry: 15.55 Stop: 15.80
Fib Ext: 15.40
1R= 15.30 2R=15.05 3R=14.80
Didn't go anywhere, and we closed at end of day for breakeven. In hindsight, this was probably a trade I shouldn't have taken as the first target (Fib Ext) was less than 1R.
AEM (gap up)
A strong first bar is followed by gentle rise past the OR. Candles 5 thru 8 form a nice pullback. The 8th is second successive NR7 and also a green dragonfly type doji. This was our long trigger. It's true to say that the 9th is a better confirmation trigger, since it also breaks the $70 level. However, the previous price action and successive NR candles was enough for me to use the 8th.
Entry: 70.10 Stop: 69.55
Fib Ext: 71.80
1R=70.65 2R=71.20 3R=71.75
The price trends up nicely, but never reaches the Fib Ext. We close at the end of day for just under 2R. I made a mistake on my LMT order to take partial at 2R, so it never triggered. In the end, still a good gainer.
ISIL (gap down)
Gap down is followed bytrend down with the ema. We get some sideways consolidation after the 6th bar as it moves up to ema resistance. The 10th is NR7 off the ema and is our short trigger.
Entry: 25.24 Stop:25.45
Fib Ext: 25.05
1R=25.03 2R=24.82 3R=24.61
We move down intially but don't reach 1R. Then the stock recovers and we are stopped out for a loss. Ok, we might say, but look closely at my stop on this trade. The 3 candles before my trigger candle all had highs of 25.49/50. This should have been my stop basis rather than the trigger candle itself. I missed this during live trading, consequently we got a losing trade rather than a breakeven one.
FMCN (gap down)
First candle is weak and thru previous day's low. We then have some choppy action within the oR before starting to trend down the ema. The 7th is a red gravestone doji type close to ema and breaks the oR as it closes weak itself. This is our short trigger.
Entry: 27.13 Stop: 27.40
Fib Ext: 26.15
1R= 26.86 2R=26.59 3R= 26.32
It never follows thru and we are stopped out a couple of bars later for a loss.
TSL (gap down)
First bar is weak and second breaks the OR. We then have choppy sideways action before falling again. The 6th is off the ema and closes weak. This is our trigger candle. Again, would have preferred a smaller candle. The 10th/12th are better in hindsight.
Entry: 34.54 Stop: 35.30
Fib Ext: 34.58 (so not in play)
1R=33.78 2R=33.02 3R=32.26
Trended down nicely in our favour and we closed at end of day for around a $1 gain.
KGC (gap up)
Strong first candle. The second breaks the oR and then we have sideways consol above the OR. The 7th is NR7 and above OR and off the ema and closes strong itself. This is our long trigger.
Entry: 21.48 Stop: 21.17
Fib Ext: 22.07
1R= 21.79 2R=22.10 3R=22.41
We trend up strongly and take partial at whole number (Fib Ext) (2R) and the rest is closed at end of day for around 3R.
Overall a good day in terms of profits. But as I said before, a bit fortunate with the mistakes I made. It was all too rushed at times, so I need to manage down my watchlist a bit better in the future. Interestingly, the DOW was down over 300 points today, yet the best trades for me were the longs. Try to find patterns on both long and short on big market move days, it can work out in your favour.
4 comments:
Congrats. Some interesting trades today.
On AUO why did you have such a massive stop? Execellent point about the risk/reward because it's only about .6R to the fib ext.
AEM, why would pass on the 7th bar but then take the 8th. You referred to the 8th as a dragonfly doji but the 7th is actually a dragonfly. The 8th is a gravestone doji which is bearish. Did the bearish 6th bar make you decide to pass on the 7th? I'm a little confused but either way great trade :)
Thanks!
pdt.
AUO > Trigger bar high was 15.70, and my stop was 10c above that. The OR low was 15.73, so I wanted to take that into account as well. I suppose 15.78 should have been my stop. In hindsight, this whole trade was wrong IMO, from risk-reward to Stop setting. Tends to happen when you get rushed into positions and take sub-par setups.
AEM > Good question. It's all about previous price action and where your "entry" is occurring. Take the 7th candle, yes ok it's a dragonfly. But we are heading down, the decade $70 is nearby and as you say previous candle was bearish. It's a judgement call, are there enough red flags to make you wait? In this case IMO I thought yes, so I waited to see what the next candle would do.
The next 8th made a successive NR7 and it made a higher low and high. It also added to OR as support (since we now have 7 consecutive candles closing above OR).
I take your point about about it being a gravestone doji and so bearish. But If you look at TraderX blog, he did say that these can be bullish signals if it's high is taken out on the next candle. In this case we also broke the $70 level.
There is no need to rush on this one. Don't forget the market was very weak, so any longs are not likely to take off without you. It would even have been better to wait for the next candle (9th) which was a better signal.
P.S > I always get my candle names mixed up.
really good stuff. It's a good feeling when you make mistakes but still end up with a nice profit.
Nice feedback on AEM. Thanks.
Didn't mean to be a stickler with the candle names, it was just confusing why you choose to take a bearish pattern long and not take the bullish pattern but your comments cleared that up for me.
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