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Wednesday, February 14, 2007

Wednesday's charts

I traded FDX today - I liked the sixth bar as it rallied to close strong and above the OR high. There was also solid support from a rising 5MA.

The target was the Fibonacci extension of the previous day's low to the OR high, and was hit four bars later. I give the set-up an "A-".

I am catching-up on email, and this one came in about an hour ago:

"Trader-X, I love the blog and have learned so much from studying your charts. Can you look at GPRO today and tell me if you would have traded it off a break of the 3rd bar low (30-minute low). I saw it as a narrow-range hanging man with a declining 5MA. Thanks."

There were several red flags with GPRO - a really wide-range first bar, and the fact that the entry noted was well above the OR low. I do see the rationale for entering (though the candle was not a true "hanging man"), and as I have said many times in the past there is nothing wrong with entering a compelling, higher-risk set-up as long as you are actually aware of the increased risk and trade accordingly. If you used a trailing stop of a close above the 5MA, you should have been able to get ~$1 out of GPRO.

The question I would ask, however, is were there better trades that you could have taken?

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estocastica said...

Great trade X! I passed on GPRO for the same reasons you mentioned but I too can understand why your reader pointed out this trade. FALC was another interesting chart from today.

How do you feel about the 2nd bar of MICC on the 15-min chart. I passed because it seemed a bit far from the 5MA -- what do you think?

J said...

Nice FDX trade. Somehow I didn't have that one on my watchlist.

I did trade DCX 30M/6C break high. The 15M/12C was a nice hammer too. It rallied big from there, unfortunately it went much further than the FIB extension where I exited. At least I was able to get a good piece of the move.

The O/R was a little smallish but with the nice recovery off the lows and closing above the O/R High it was one of the few that I could find that offered a nice opportunity.

Trader-X said...

MICC is interesting - it reminds me of some of the trades Victoria has been making on her blog.

That second bar closed above the 50% mark of the first bar, and was strong with both it and the first bar leaving lower tails (bullish). I would have preferred it been closer to the 5MA, but looking at it after the fact I can say it wasn't that far away. Compelling!

Anonymous said...

Good trade. DCX was actually a nice "beyond the Fibonacci extension" set-up.


Prospectus said...

X, where was your entry exactly? A break of that 6th bar high, meaning after it closed (in the opening of the seventh bar)?

I traded FDX on 30-min today too, but I got in early during the 5th bar as it broke the OR high again.I was lucky that it moved up as planned!

Trader-X said...

A break of the sixth bar high. I don't enter while the candle is still forming - as you indicate on your entry on the initial break of the OR...because I don't know how the bar is going to end. It might look one way 10-minutes in, and completely different 15-20 minutes later.

In other words, it could shoot past the OR high but end up leaving a long upper tail - bullish at the beginning but the actual bar ends up very bearish.

The sixth bar closed above the OR high - that was the signal or trigger. A break of the sixth bar high was the entry. Had price not broken the sixth bar high on the next candle, there would have been no trade.

Prospectus said...

X, what's your entry mechanism? Do you put in a buy stop above the high of the completed bar, or do you just watch manually and send a market order?

TradingGoddess said...


greytrader said...

CIEN 15min break of 7th bar, missed 6th bar entry.

One that did not work: PFCB break of 5th bar on 15min, stopped out on 7th for a small loss. I do not like stops on Nasdaq that trigger on a bid instead of an actual transaction... price reversed 2 cents away from stop but there were bids at 43.10 :-(

Gary said...

Interesting charts for today besides that awesome FDX trade X posted --> NTRI CTRP RIMM DRIV MA and BIDU--cant belive the risk was only 30 cents on BIDU--btw all 15' candles charts.

Trader-X said...

I do both prospectus. It depends on how busy I am, how many stocks I am watching, how many postions I am in...

Great comments all.

Gary said...


Just my input on your PFCB trade--its so far away from OR high why would you even consider that trade??

Just trying to give you some insight- I used to trade like that too--as long as you learn why it didnt work.

greytrader said...

Thanks for the comment Gary.
The idea was a X "bread and butter" setup. Prices retraced to the 38% Fib and bar 4 and 5 were offsetting bars (albeit not perfect) with 5MA support. Bar 2 to 4 were high volume and were a red flag in hindsight. I do not really see the distance to the OR high as a problem since prices bounced at the 38% fib ?
Here is an X trade which I thought looked like today's PFCB:

I have a lot to learn and I appreciate any additional comments on this.

Trader-X said...

grey - your thinking is correct. Just remember I have pointed out over the past three months or so that the B&B set-ups are not as reliable/consistent as some of the others on the blog. As long as you know that and keep a close eye on them, I see no problem trading them (provided there are not better set-ups at the time!).