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Tuesday, April 03, 2007

Below the OR high



Again, you can still take these trades - just be aware of the higher risk of price reversing when it reaches the OR high; and don't be upset if they fail.

The entry was a break of the ninth bar high* - a cross between a doji and a "hammer-type" candle...but I liked the consolidation after the gap up, and I liked the fact that price had worked its way back into the top half of the morning's range (also note it was a narrow-range, inside bar). I closed the position at the end of the day...it did not reach the Fibonacci extension (of the previous day's low to the OR high), but was still good for .65.

Because of the entry below the OR high and the crazy first bar, I give this set-up a "C+".

*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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6 comments:

Jose V. said...

Nice trade.
Have you seen OCNW today on 15 min chart. Would you have entered when it broke the 3rd bar low? I saw a WR first bar and the 5ema is not close enough to provide resistance, but a stop at 2nd bar high would have been nice.
PD: I found it at 11:45 so I lost all the fun, but worth a view

bl said...

X,
Excellent!. DNDN 1/30 w/too soon exit.Though I do like the lure of the quick 5 min charts esp with news like the airlines: llc uaua amr, the 15/30 time frames are alot more relaxful: grow jsda similar to infy. racers: irbt vdsi.

MillionDollarJourney.com said...

Great site Trader-x. I don't usually day trade, but I've used the "trader-x" gap up technique a couple of times and it has worked like a charm! Thanks for sharing!

FT

bidmarket said...

nice trade. I entered on the break of the 10th bar. similar to your PXD trade earlier.

jc said...

bl,

You are a Scottrade user, right? Can you elaborate on what scans or tools you use to find candidates. I know that one of their platforms provides access to Trade Ideas. Do you use Trade Ideas to find gappers?

Thanks.

bl said...

jc,
I use Scottrade Elite and use their h/l scan as follows: naz stocks >$3 >1000vol >+2% above/below yesterdays close gap or no gap for the first 5 min of the open then close down the scan, toss out any <10000vol and then toss out <50000vol 15 min into the open, or keep top 33 vol stocks at that time. No shorting...too many good long prospects but of course you could just do a ny/naz short scan. Less choices might be a good thing. I think 5 min into the open is enough to get most% up stocks, like IDMI which was a 3-5min bar b/o. I'm thinking of reopening the scan 1 hour into the open at >3% 250000vol to see what I missed and offer better set ups, like CROX. I just have to shut the scan down after 5 min otherwise it's a distraction. I toss out as I go along. I might use 5/10 min charts at the open then go into 15/30 at 30 into the open. I don't use Trade Ideas though it is free. Too distracting for TraderX method. Up to this morning I was using premkt Trade Ideas but won't anymore. I "think" news can alert one to sectors like subprime or stocks that you could assume would be attract interest. Briefing.com most up/dn premkt I don't use.