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Saturday, September 09, 2006

Friday's charts

A few of you mentioned EFX in "Comments" on Friday. I passed on it because (as X would say) the 1st bar was too wide range. But looking back at the chart - apart from the wide range 1st bar - it was a textbook set-up. The 2nd and 3rd bars stayed at the top of the 1st bar's range. The 3rd bar closed strong and offset the 2nd bar's red body. And the 3rd bar was a narrow range, inside bar. So, good trade!

One I did trade was CTB (30-minute chart). I like this set-up - it is like a "U" where price declines and moves back up with the 2nd and 3rd bars printing higher lows and higher highs, and the third bar closing strong. The only issue is that the 3rd bar closed below the opening range (OR) high, so X's standard disclaimer applies*.

*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.

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1 comment:

Trader-X said...

I agree on EFX. That was textbook except for the first bar...I would have passed thinking it made its entire move there. Good trading.