Price broke through the high and pulled back to retest that level as support; it presented a nice setup with offsetting bars (see bottom arrow). I bought on a break of the green bar's high, and sold at the Fibonacci extension (FE). It was a $12 stock with a nice percentage gain.
Note - there was also a setup on the 15-minute chart at the same level; price formed a hammer-type candle.
If you refer back to my post on plotting Fibonacci lines, this is a classic example of #2.
note - this stock appeared on the Equity Watchlist for today.
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6 comments:
Hi Trader X,
Do you ususally wait for the test support after the break of the OR High or do you sometimes open position on the initial break of the OR high?
Thanks,
Elad.
Where do you get your gap list from? Thank you for sharing your knowledge and experience.
Jean, click on the welcome link at the top of the page. I found several posts about gap lists.
Elad-
I don't always wait - if I get a good candle and setup I will buy on the break. But, the odds of a successful trade increase dramatically with a pullback to support (resistance) and a good setup at that point.
X, what is your % of stock to futures trades now?
Do you always sell at the fibonaci extension or do you hold something for more?
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