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Thursday, December 29, 2005

MFLX - 092905; 15-minute chart

1.) What did I see?
A gap up and wide-range first bar. The second bar is narrow range, and closes in the top half of the first bar's range.
2.) What is the entry?
A break of the second bar high.
3.) What is the exit?
1/2 closed after $1 gain. The other 1/2 was held and closed on a break of the 3:00 bar low (fourth bar from the end). As you can see, it left a long upper tail at the high for the day, indicating a good possibility of a pullback into the close.

Notes - you might have been tempted to close the position after the weak fourth and fifth bars, but price never hit the stop which was the low of the entry bar (second bar). You would have missed a good trade by bailing out prematurely.

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