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Wednesday, August 23, 2006

DBRN - 082306; 15-minute chart

1.) What did I see?
A gap down and wide-range first bar that left a long upper tail. The second bar is a narrow-range, inside bar that also leaves an upper tail and closes weak.
2.) What is the entry?
A break of the second bar low*.
3.) What is the exit?
The target was the Fibonacci extension of the previous day's high to the opening range low; it was hit in the early afternoon.

Set-up grade = B; the entry was above the OR low.

*as with any entry below/above a previous high/low (in the case of my charts, the opening range (OR) high/low), you need to watch for resistance/support as price approaches those levels. If it stalls, you want to exit. If it breaks through, the odds are good you will have a move to the corresponding Fibonacci extension. As you can see in the DBRN chart, the third bar broke through and closed below the OR low.

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Terry said...

I got some of that, but got impatient and covered early. Good trade.

Dave said...

I put my order in, hit execute, and... no shares to borrow.

Arg! I missed DBRN but caught ISE.

NABNALB said...

As someone new to the day trading scene, it's reassuring to see one of "my" picks highlighted. Unfortunately, I also picked up some RMBS and got stopped out (trading off of 30min bars). I would be curious how you would grade that one...

Trader-X said...

Dave - what broker?

Also, good interview with TraderJamie.

nabnalb - RMBS looks like it made the entire move in that first bar...it was too wide range for me.

Dave said...

Scottrade. I actually called them and they found some shares for me but it was a little too extended at that point.

Jamie seems like a great guy - thanks for the comments.

James said...

Hey just curious what your grade would be on the short set-up for google using 15 minute bars... I shorted on a break of the 4th bar low... Thanks

John said...

Hey T-X

I was wondering why you didn't exit DBRN on the 5th candle engulfing?

I was in ISE and got shaken out on the 14th bar. DBRN actually looks worse on the 5th.

I'm still trying to learn, so I was wondering if I am missing something obvious.


Trader-X said...

John - the main reason was because the fourth bar closed below the halfway point between the low and the Fibonacci extension. I find if price closes below that level, it usually goes all the way to the extension. So, I was willing to give it a little room. Had it closed above that level on the fourth bar, I would have covered my short for a small gain.

NABNALB said...

Thanks for the feedback. I thought I was chasing but did it anyway. Is there a hard and fast rule you use regarding range, or does it depend on what the general market is doing?

Gene said...

This is mainly for "Dave" who mentioned Scottrade. I have personally telephoned Scottrade at least 5 times now concerning the many problems with Scottrade Elite whenever a stock gaps - either up or down. In particlular, the charts on the 15 and 30 minutes are especially vulnerable. I phoned them again yesterday regarding these gaps and also another problem I have been observing, that of alerts not firing when the setpoint is met.

So, if you use the Elite version, the 15 and 30 min charts can be "krap" when there exists a gap.

I usually go to a 10 or 5 min chart when in doubt.

Am seriously considering another platform.