Trades 23/Mar/2011

Still work in progress, but I'm looking at trading 2-bar setups on 5min chart. Basic criteria as follows:

• Open inside prev day's range
• Gap needs to be minimal (ideally < 1%)
• Second candle (and ideally the first) closes outside the previous day's range
• Second candle is LL and LH ( for shorts) and opposite for longs
• Close of 2nd candle ideally is not too far from previous day's close (< 3%)
• Entry is break of the 2nd candle in the direction of the move
• Hard Stop is opposite end of 2nd candle but scale out of half if support/resistance is found against you

Check out your charts, do some backtesting etc and see what you think. Comments welcome. The three trades today were all 2-bar setups.

Summary

SPG      +$104
TIF        -$33
VTR      +$36