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Wednesday, October 04, 2006

Hump day

I wrote a post yesterday about daily goals, and mentioned as one of them "don't lose "stupid" money". And today, I lost "stupid" money. I made an order entry mistake that closed a position early, and cost me over .40 in potential profit. Needless to say I failed to reach that goal today!

On a brighter note - I had a "quick hit" this morning with CCJ. It gapped down, and the first bar left an upper tail (bearish). The second bar was a narrow-range, inside bar that formed a "hanging man" candle. I entered on a break of the second bar low*, and covered two bars later at the Fibonacci extension of the previous day's high to the opening range low.




DIVX was another, similar short with a nice % gain. But, I could not borrow any shares.

Now I have to get prepared for the season premiere of Lost tonight.

*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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31 comments:

Dwight said...

X, were you only short today? Good trading.

Trader-X said...

Dwight, no. In fact this was my only short. I had several longs, including the one I mistakenly closed early. And, a nice one above the Fibonacci extension.

Have a good night.

lbcando said...

Took SNE above 3rd bar on 15min.

LB

QQQBall said...

nice trading X. i was looking to build some income positions and hit the canadian enery royalties.

started watvhin grey's anatomy on DVD. never seen lost

Glenn said...

HUM was a sweet Tom C./Trader-X U turn stock.

Thanks guys.

aRs3h0le said...

Hi - newbie here

Do you only post the setup at the end of the day - or do you have realtime poting of trades? Am i missing a link somewhere to the realtime posts.?

Thanks

Trader-X said...

No, I don't post real-time trades. I actually trade for a living, and the blog is something I do for fun, education, helping others.

Anonymous said...

What good is it if you don't make real time calls?

Trader-X said...

I make a point not to post comments by "anonymous" - it is not that hard to make up a name.

But, this one was worth responding to...

"What good is it if you don't make real time calls?"

You are 100% right - it is no good. I advise you not to waste your time reading the blog. You will get no benefit.

You should check out elitetrader.com - there are a lot of people making real-time calls there, and I think you would like the whole atmosphere compared to here. Best of luck!

Howie said...

lol.

Hey X, what did you think of Lost last night? I thought it was good, but man it seems there are just more questions and no answers!

greytrader said...

Hey X, on the CCJ trade if the stop is high of second bar, R is .35 and the fib target it .73 which is 2R. Is there a minimum Risk to reward ratio you use ?

Trader-X said...

howie - it was good, and it has sucked me in for another season!

greytrader - I don't really (formally) calculate risk/reward. Don't get me wrong, I will not risk 1.00 to make .30...but, when I enter a trade I know my target, so I know how much I will make and if the trade is "decent".

TraderWHY said...

X... every consider creating a paid content site for members? Monthly fee just for the priviledge of knowing which trades you're considering every day. I would be the first member willing to fork over the moola.

Bob Ryan said...

What if I were to tell you that all it takes is 150 folks paying you $50 a month to generate $90k a year... is that something you would be interested in?

Trader-X said...

tradewhy and bob - no. I think you are half joking, so I will add lol.

Bottom-line is that things unfold way too fast, and there is no way I could communicate what I am doing in a timely manner. More important, I don't believe in following gurus - even if I am the guru. Everyone has to figure out their own style and methods, and not try to copy (exactly) someone else.

bidmarket said...

X, I like your format. It keeps us thinking.
ACOR-would you have traded it today and if so on the break of the 2nd or 5th bar?
STLD-on break of 2nd bar?
BBV-on break of 1st bar?

Thank you!

Trader-X said...

bidmarket - what time frames?

bidmarket said...

30

Trader-X said...

ACOR was on my watchlist, but I missed it. An entry above the second bar high was great - as long as you were watching the OR high to see if it stalled. Obviously it did not, and flew from there. I would not have taken an entry above the fifth bar - it would have worked, but the action of the third and fourth bars was a little dramatic, and the fifth bar was narrow-range but not really any kind of signal.

Saw STLD, but did not take it. The second bar was too much like a doji representing indecision - upper and lower tail. Having said that, I see the argument. Narrow range bar, rising MA, consolidation at the high of the first bar...I think it was a good trade as long as you knew the risk going in.

BBV - I try not to trade the first bar...not enough info. Having said that, I can see an argument in the second or third bars (with the same caveat as STLD above).

All in all, you are trading (or looking for trades) in some good candidates.

Prospectus said...

I took a long on a break of the 3rd bar high on a 30 min chart of TASR:

http://photos1.blogger.com/blogger/5593/1464/1600/Chart%20of%20TASR.gif

I was stopped out at the low of the next bar. Any pointers?

Anonymous said...

Ex, when you entered TASR it was almost 15% from the previous close. It seems it might have been a little extended.

X has been doing some stuff to help better entries that might have helped you out today. X, are you going to post about that?

But in general, going long after up 15% would have scared me.

TJ

Trader-X said...

TJ - I will expand on this in the future, but the answer is on exengineer's chart...that is, where the entry is in relation to the 5MA. You can use the 5 as a good indication of whether a stock will run, or needs to pullback first. Usually, if price is far away from the 5 you will see it either move sideways or correct back to that area. For the stocks that tend to get a good "take-off", they are usually in close proximity to the 5 - check out ACOR and STLD that we discussed earlier.

I am not saying every stock that rockets has to do so from the 5MA - but usually 75% of them do.

Experiment with it on your own, and see what you think. Where is your entry in relation to the 5MA? If it is far away, I would look for a better set-up. Look at a lot of charts and see if you can see any benefit...

FlyingJ said...

That is very interesting X. I was watching MAMA this morning, and it moved sideways after the gap right into the 5EMA, and exploded on that 5th bar.

I have much studying to do now. Thanks as always. You have to be the king of good karma for sharing so freely.

Wayne said...

Hey x - great blog. Your work is appreciated.

I've never day traded before, but lot's of swing and position experience. A problem I have is that Tradestation doesn't seem to allow a stop and limit to be placed on same stock - so you have to be absolutely glued to the tube. Do other brokers allow this?

James said...

This is a really dumb question but what is meant by the 5 "period" moving average. If you have an intraday chart up what would you set your moving average line to? Does it depend on the timeframe of your candlesticks? What if you're looking at an intraday tick chart of a stock, would the 5 period moving average be set differently? Thanks

ElToro said...

X, Great blog! Been following it for a month now with great results! Take a look at GES today on the 15 min for another good example of a stock moving off of the 5MA.

Thanks

George said...

James, a 5 "period" moving average is 5 "periods", whatever the timeframe. On a daily chart, it is 5 days. On a minute chart, it is 5 minutes. On a 30 minute chart, it is 5 30 minute periods.

I don't know what software you use, but you just plot a moving average with 5 as the period in any software I have ever used.

Hope that helps.

Boilermaker said...

Wayne, If I understand what you are asking, I do such trades at Interactive Brokers. Surprised they can't be done at TradeStation, but I have never used TradeStation. I essentially entered an order that has three parts. For instance on a long, I have a stop-limit to get me in a trade on a break of the previous candle. Than two orders are entered on that execution, a stop-loss sell order and a limit sell profit order. When one of these executes the other is cancelled. Some brokers refer to these os OCO, one cancels other, orders

Boilermaker said...

I promise I will proof read my comment next time before submitting, lol.

RicoS said...

X, if I had followed your 5 rule, I would not have taken 90% of my losing trades over the past two weeks. Damn.

greytrader said...

X, the 5 rule similarly applies on shorts ?