Viewer Mail - analyzing MXIM

I am a day late - this email is from Monday, so refer to Monday's chart (not today's):

"I discovered your blog a few weeks ago, and it is very educational. Kudos on a job well done.

I trade similar to you, at least to some of your charts. I am looking for stocks that are moving, and I enter on a countertrend bar. My win rate is not as high as I like, and I cannot tell the good trades from the bad ones like I want to. I need some additional filters. An example from today is MXIM, which I traded for a small loss. I was using a 15 minute cahrt, and entered on a break of the 3rd countertrend bar.

Any advice? TIA."

First, thanks for the kind words. Second, you say you trade "movers" - MXIM gapped up so it had that potential, but after the first three bars it had traded in a very narrow range, so I would not have considered it a "mover". If the first bar had been stronger and wider range, then MXIM would have exhibited some potential. But at best, by entering on a break of the third bar, you are "betting" on a breakout with little evidence that MXIM was going to provide one. Compare that to the strong first bar in GLW which I posted yesterday.

Also, you say your strategy is entering on a countertrend bar. This is dangerous if you don't take any other price action into consideration, or map out levels of support and resistance (in my case, I use Fibonacci based on the previous day and opening range). If you are only looking at a countertrend bar early in the day, then I understand why you say your win rate is not very high.

I would suggest looking at the "bigger picture", not just one counter-trend bar in a vacuum. What did the previous bars do? Is the stock moving, or just in sideways (narrow-range) chop? Is there support or resistance nearby? Is there a logical profit target if you enter the trade?

That is a start - I will post more thoughts later in the week. Good luck!

Disclaimer - hindsight is always 20/20!