An interesting morning - I wanted to highlight a few trades. RELL was a nice long and a big percentage winner off a break of the third bar high. OSI was a nice short off a break of the second bar low - it reversed just short of the target and I closed the position on a break of the seventh bar high.
Charts later today or tonight.
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Trader-X, Stocks, Fibonacci, RELL, OSI
Wednesday, April 05, 2006
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8 comments:
RELL was a great trade, and I missed it. I am short OSI, and still holding. I think it will turn back down.
Charles - you may be right about OSI. I needed to lighten up my number of positions, I had a nice profit in it and I took it. Best of luck.
usg was a good play today. tad
Trader-x
For trades like RELL, what do you use to determine that price is reversing and filling the gap, rather than just a pullback. For Rell the entry was too early for me to decide... other than the first 2 candle tails and the 3rd green candle. Oh... and I took OSI with you today.
thanks Joe(calif)
Hey Joe - for RELL my target was the retracement zone, and I closed the position when that was hit.
To answer your question in general, there is no real answer! I think it is experience. I look for trouble penetrating resistance (or support), long tails, etc. But, I may close a position only to see it pullback, reverse, and continue to the target...I do that several times a week. You can never be 100%, but I also subscribe to the old adage "you never go broke taking a profit". So, I don't shed too many tears.
But, if I have a really big profit or have already closed a portion of the position, I am willing to take a little more risk and see if it is just a pullback.
Bottom-line - I just watch the price action and candles and make the best decision based on the data and experience.
Hey X. I caught one of your above the fib extension moves today with RYL, a break of the 12:45 bar high. It has paid off well. Thanks for everything and keep up the great posts.
Traderx... thanks for your reply. My question wasn't clear. My question was referring to your entry.... Quite often, when price moves to close the gap, like RELL today, and I can't use fib's to value the entry long... I am am unsure whether price is just a pullback or a reversal... today, RELL had the first 2 candles red, but they both had tails, then the 3rd bar was green... at the third bar, I couldn't tell if price was reversing (and it did) or price was just pulling back. How do you make that call.
thanks Joe
Hey Joe (isn't that a Hendrix song?) - I use the opening range (OR)...for me - I usually (USUALLY) define the opening range as the first 15-minutes. So, I draw my Fibs from the previous day's high/low to the opening range low/high. RELL was moving off the opening range low.
Take a look at some of my past charts, and look at the top of the page under "Welcome" for some more info on how I trade this way.
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