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Monday, September 04, 2006

VTS - 090106; 30-minute chart




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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3 comments:

5150 said...

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.

earnest said...

Long BMY at 10:17. Gap up on volume and above pivots. Bullish tail on 1st candle, although 1st candles’s body was red. Indicisive 2nd candle follow by hammerish 3rd candle that formed above the 2nd with its entire green body above the OR. Both 2nd and 3rd candles were entirely in/above top 50% of OR. Entry was on break of 3rd candle, sold for small loss on break of 11:45 candle.

Will appreciate any comments - would/did others take this trade ...why not? Thanks.

Trader-X said...

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.