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Saturday, November 08, 2008

PCLN - 110708

PCLN setup with a three-bar pattern that I like to trade. The first candle is a down bar, the second is a narrow-range bar than can be a doji or similar pattern (the key is narrow-range). The third candle is an up bar that closes above the halfway point of the first candle's real body. If there are tails on the candles, they should be short.

PCLN gaps above the previous day's high and falls to the retracement zone (RZ); my Fibonacci lines are plotted from the previous day's low to the opening range (OR) high. The three-bar pattern referenced above occurs at the 50% retracement, and price rallies from that point. I closed the position at the Fibonacci extension (FE).



note - this stock appeared on the Equity Watchlist for today.

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6 comments:

Tyler said...

Trader X,

Great trade! I learned a lot from you blog while you were gone and am glad to see you back at it.

I also follow Jamie's blog and have learned a lot from him. He seems to trade in the direction of the trend using the moving averages.

Are you able to trade with no moving averages just because you have been trading for so long? I have tried to eliminate my moving averages, but it seems that my trades never work out because of resistance or support where a moving average would be.

Thanks,
Tyler

Anonymous said...

Guru, great trade.

Shah

Ryan said...

Hey X,

Now that you use the 5 minute time frame, how many stocks do you keep an eye on at a time? It would seem like watching a 5 min chart requires you to select fewer stocks as you have to react much faster.

Also, I am curious how do you set up the charts on your monitor with 5 minute time frames for all your charts? thanks

Ralph said...

X, I enjoy your style of trading very much. However, can you elaborate on the money management method you employ when managing a trade? For example: (1) % capital risk per trade, (2) Setting of initial stop, (3) Moving stop to b/e, (3) Banking some profits, (4) Letting profits run.

Thanks, Ralph

Anonymous said...

X,
do u look at volume for such setup?

Also, your entry is at the opening of the 4th bar or need to wait for break of 3rd bar high for this type of entry? Of course in this case there isn't much of a difference, but there could be a difference in other setups. Thanks

Dan

Trader-X said...

Tyler - I will make a post regarding MAs later this week.

Ryan - my WL is about 50 deep, but it is sorted by volume and I really only look at the top 15-20.

Ralph - check out WELCOME, LINKS TO KEY POSTS at the top of every page.

Dan - I don't pay attention to volume except to sort my watchlist. And it is always a break of the trigger bar's high (or low for a short) on the entry.