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Tuesday, March 21, 2006

Promoted from comments - BFT

Dave C. made a comment on an earlier post about a nice trade today. It is a good example of the "bread and butter buy" set-up. I missed it completely - great job Dave.

"I got in on HEB today as well, although only on paper! lol

Did anyone catch BFT? It was a pretty good trade. I entered on the break of the 5th bar. Exited out near the Fib extension right on cue! Good thing, since it reversed on the very next bar after the extension was hit!

Dave C"

Here is the chart. And, amazing how those Fibonacci extensions work!



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9 comments:

Martin said...

That was beautiful. And I missed it too! That move was over 8%. Good job mate.

Anonymous said...

Nice trade.

X, I just want to say not only do you have a very educational blog, you are a good writer and very entertaining. I am glad I found your site.

Bob in Portland

Trader-X said...

Thanks for the kind words Bob. And, you live in one of my favorite places. I have spent a lot of time in Portland, and hope to get up there this summer.

Jonathan Dean said...

Hi,

Want to echo the thanks of the previous commenter in terms of the great effort put in to helping people improve their trading. Sincere thanks. As I am new to the blog, could you please provide some more information (or maybe a link?) to more explanation as to why this is a bread and butter buy set up and what Fibonacci is telling you in terms of when to get out?

Thanks again,
Jonathan from San Francisco

Samuel said...

Jonathan, I think I can answer your question. First, you can do a Google search of this site at the bottom of the page for bread and butter and it should pull up all the posts. Baically it is a pullback to the retracement lines and a move off of those. In this case, a rally off the 38.2% retracement. Trader-X tends to sell at least some of the position at what he calls the Fibonacci extension, which is the 138% line on his chart. Also, if you click on the Welcome at the top of the page you will find links to FAQ and definitions.

How did I do Trader-X?

Trader-X said...

Thanks Samuel - you're hired!

Anonymous said...

Trader X: Thanks for the Fibonacci calc file you sent me yesterday. I was so excited to find your blog yesterday and today I actually put your strategy in trading, although in my IB papertrade account:)

The stock I trade was CPST (I actually watched it for some days since its bolling band kept narrowing and seemed to be ready for a break.)

1)What did I see:
Gap up wide-range first bar, although ending in red. The third one is pretty bearish which ends below the open range. The fourth bar was the narrowest in the morning and was a small doji.
2)What is the entry: Break of the fourth bar high.
3)What is the exit: I use X's formular to calculate the fibonacci extension at 3.4, so I exited right at that point.The price kept moving up for only 3c before going down:)

X, do you think I should actually wait for a little longer for an entry since the bullish sign was not clear at my entry point? Anyway, thanks for bringing us this blog. Hope I can start real trading with your strategy soone when I gain enough confidence.

Trader-X said...

Thanks for the kind words. First, take your time paper trading and build your confidence. And, don't try to do exactly what I do - take what I do and make it your own.

Regarding CPST - I see what you saw in the fourth bar, but the high was not taken out by the fifth bar. However, the sixth bar formed a nice hammer and the seventh bar DID take out the sixth bar's high. As you know, price rallied just bast the Fibonacci extension and then reversed. All in all, a good trade.

Jonathan Dean said...

Samuel,

Sincere thanks for taking the time to respond here. Very much appreciate it. Thanks, Trader X, for the confirmation of direction.

Regards, Jonathan.