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Friday, March 09, 2007

Viewer Mail - consistent profits

Charles sent me this email last night and I thought it was worth publishing...not just because it helps my ego, but also because it has some valuable insights for everyone.


I wanted to write and tell you that I am so appreciative of your blog and all of the information you provide. So far in 2007, I have not had a losing week. For 10 weeks in a row I have made impressive, consistent profits. I made money last year, but I had many peaks and valleys which were nerve racking. I much prefer the consistency I have developed and I owe it to what I learned from you and Tom C. and the other contributors.

It took me a while to figure it out, and it took me multiple times of reading your posts on a trader's job and focusing on a few consistent setups. I always had the problem of needing/wanting to get into trades right after the open because I thought I was missing the action if I didn't. Once I got it through my thick head that was actually costing me money and instead started waiting for good trades was when the consistency came.

Now I focus on 3 setups and I look for those day in and day out. I ignore everything else. This year there has only been a handful of days when I didn't find a setup, but I had the patience to just not trade and as a result did not lose money. Also you will be happy to know for my longer term trades and IRA I have been using the strategies from tradethemove.com, and have had 2 big winners since January.

Overall I am very excited and knock on wood hope my consistency continues. Thanks again for everything. I know you get many negative remarks, and thought you would appreciate something positive for a change. Feel free to share this on the blog if you think it would help others.


Thanks Charles. Here are the posts he was referring to above:

> A trader's job
> Chasing Success

Check back this weekend for charts.



Nate said...

Way to go Charles. X, your Chasing Success post hit home from me. I read it at the beginning of every week. Thanks!

OONR7 said...

geez... sounds like I could've written that. And I'm not kidding. Charles makes perfect sense and I feel like I've taken a path similar to his as well.

Anonymous said...


R.J. said...

Way to go Charles! Continued good fortune!

Craig said...

Glad to hear it Charles, and I have enjoyed reading your comments from time to time. I hope 2007 continues to be successful.

estocastica said...

Oh boy, the last thing this world needs is trader-x with an even larger ego. ;)

Anonymous said...

Come join the Trader X chat room!...

get on aol and add jwz04 to your buddy list.. let's start networking.

Trader-X said...

You might call it the Trader-X "inspired" chat room, or else I will have to charge you a licensing fee.

: )

greytrader said...

Good job Charles, and which 3 setups do you concentrate on ?

J said...

Kudos to Charles and X.

Today(3/9) was slim pickings but found 3 to trade.

CMI 15M/4B - 138 FIB exit

CHRW 15/8B - Mod 138 FIB exit (prior day HI to 4B pivot LO)

BIDU 15M/13B - Mod 138 FIB exit again (1stB HI to 8B pivot LO)

Hope all did well today.

Mike said...

So what is our top 20 list for this weekend?

Mentalic said...

Hi All,

I was doing some paper trading on a couple of stocks on friday, but those trades didnt seem like a good idea...i would really appreciate any inputs you could provide....

1) On a 15' chart for NSM, I was thinking of entering on a break of the 11th bar, which "seemed" like a hammer, but it never made much of a move above that till the EOD. It also had support from the 5ema...

2) On a 15' char for ACH, the 12th bar again was a hammer with support from 5ema, but again, it never moved above that a lot...

Any ideas what could have been red flags for these trades?


bl said...

NSM-set up like a bread and butter trade 2-30'bar but failed. 10-30' hammer/fib looked tradeable
ACH-same as above no hammer at 10/11 bar like nsm.
I think alot of stocks reversed at the open to some fib # and didn't go anywhere/kept failing until the 2:22 magic hour: FFIV 10-30' hammer/fib and rally. I made 2 bad trades on this one based on 5ema-15' ONLY. That's fine if it's close to the OH, or bread and butter play with appropriate candle. Good luck

Jim C. said...

Mentalic - Same red flags for both NSM and ACH which were gap ups:
1) Weak 1st bar or opening range (OR)
2) Downside breakout of OR

That's about all you need, especially on a Friday, to limit the upside of gap ups. These would be classified as "bad and mediocre setups" that should be discarded.

John said...


Can I ask what you mean by "2:22 magic hour"? I've noticed many stocks start to move again around 2pm.


Can I ask which 3 setups you focus on?


John said...


Forgot to ask before...on FFIV, I don't see the 10th bar (30') in line with a fib number, except that it is below the 38.2 or 61.8 depending on how you have your fibs drawn. This is when you plot them from Friday's O.R. high to Thursday's low.

Could just be my charts, but I was hoping you could clarify.

Thanks for the help,

Mentalic said...

Thanks bl...looked at the 2nd 30' bar for NSM..which was a decent hammer...but it failed to move up...btw...whats this "2:22" magic hour??

Thanks Jim C....But, i have seen a lot of setups on X's blog that gap up and then pullback, and then start rising again...this looked like one of those setups to me...but i guess, like you said, the weak first bar might have been a red flag...thanks again...

bl said...

Right, it was a .78 fib, and also a .62 fib from Wed lo to Fri hi. It just pierced the recent 4 day lo trendline and reversed. I heard about the 2:22 strength into the close on a SI site and Trader's Almanac p139-40, 2007 and earlier. Typical weakness first 30 min, then strength, 2-2:30 weakness, then rally to the close, esp in bull markets. Ebb and flow of the market. Some in my 20/20 list with 30' charts. And some are nasty...viewer discretion advised: bcsi 4,cogn 3, chrw 4, rimm 6,cbey 2, ntri 2, chap 2, pcar3, airm 2, bare 4, bucy 2, omri 10.

ADD Trader said...

Just to follow up on what Jim C. said......if you are going to take a trade below the OR, you want price to consolodate in the upper 50% of the OR. In fact, the higher the better. I would prefer the upper 25% of the range. And ususally, when a stock breaks below the OR, I take it off the list as a possible long candidate.

Hope this helps.

ADD Trader

Sameer said...

Good job Charles. I would be interested in hearing what some of your longer-term trades in your IRA were.

Anonymous said...

Mentalic - I did not read all of the comments, so this may be a repeat...but here are my thoughts:

1.) NSM 11th bar might have been hammer-like but it was red and closed below the 5MA. So you are thinking of going long in a downtrend below the 5MA...recipe for disaster.

2.) ACH - the next bar didn't take out the 12th bar's high, so you would not have gotten an entry anyway.

Tom C.

Charles said...

Thanks for all of the positive feedback. I owe turning the corner to this blog, so it was the least I could do to write X.

As far as the 3 set-ups I focus on, I will say that is not the point. You probably should not focus on the same ones. It is less about which ones you focus on and more about that you focus on SOMETHING. In any case, I look for a simple gap up, sideways consolidation, rising 5MA and set-up with a candle moving just above the OR high. Almost like the 5MA is pushing it up (reverse for shorts). And a gap up and pullback to a rising 5MA and a hammer or offsetting bars. The pullback should not penetrate the lower 50% of the morning's range. Sorry, but the 3rd one is secret.

As far as longer term trades in my IRA, you guys really need to check out www.tradethemove.com. It is well worth the money. I caught SYX for a huge (50%) gain and USNA for a nice gain (over 10%). More importantly, I sold them before they cratered.

Thanks again and best wishes to everyone in 2007.

Mentalic said...

Thanks bl...

Thanks ADD Trader...i will keep that in mind for any future setups...

Thanks Tom C...like you said, the 11th bar closed below the 5ema...i guess that might flag it as red...