1.) What did I see?
A gap up and wide range first bar that left an upper tail, but closed green. The second and third bars are inside, narrow range bars that form nice "hammer-type" candles and stay in the upper part of the first bar's range. The fourth bar is the narrowest of the morning (NRM). The morning's action was also supported by a rising moving average.
2.) What is the entry?
A break of the fourth bar high*.
3.) What is the exit?
The position was closed at the Fibonacci extension of the previous day's low to the opening range high.
Set-up grade = C+; the entry was below the OR high, and I did not like the entry bar as it was more of a "doji" (representing indecisiveness) than anything else. I would have preferred a hammer or a candle that closed at its high. I took on the trade aware of the increased risk.
*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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tags:
trader-x, stocks, fibonacci, trading, vts
2 comments:
Hi X....Ive noticed that you have been playing around with short term moving averages....Ive seen you use a 13 day and now a 5 day. Any signifigance with theese? Keep up the great work.
Hey 5150. Here is what I am experimenting with:
5 on the 30-minute chart
8 on the 15-minute chart
13 in general
34 in general (as always)
All are Fibonaci numbers (call it superstition). I have always used MA's, and like looking at different ones periodically. Some come from readers, some from me being bored.
I am finding a lot of nice action using the 5 on the 30-minute chart - used in conjunction with my other methods, of course. Take a look at it on your own.
For the most part, I discourage bouncing around from MA to MA - the bottom-line is that ANY MA will give a good signal at one time or another, so don't get into the habit of chasing different ones from one day to the next. But I also like "tweeking" what I do...so it is a fine line.
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