EARLY MORNING EDIT - Dinosaur Trader is trying to get a story to move up on Digg...head over and Digg it. If you don't have a Digg account, it only takes a minute to sign-up...and Digg is a great site.
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I am working on a mega-post explaining my new, simplified trading focus. I hope to have it up over the weekend. Until then, you will have to figure out this chart on your own (it shouldn't be that difficult):
Cisco Systems (CSCO) reported earnings after the bell and warned of continued hard times ahead. The chart of CSCO is representative of most charts, but it is still startling to look at; it has been a crazy decade and there are still 11 months left!
On a blog related note, people seem to prefer the "Random Family Guy Quote" over polls...
And thanks to everyone for all of the positive comments!
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15 comments:
Hell yeah!
Even the computer I'm using to make this comment is named "Stewie" on my network!
Stewie rules the world!
-AT
Is the NEM trade, a reversal play? Short on the break of 7th bar low?
Zach
Zach, yes but I am not sure what bar my entry was off the top of my head.
Zach,
40-50 minutes is/was key. From 10m chart - 40m shooting starish, 50m shooting star, 60m hanging man. Short on break of hanging man going thru semi-round number 40.50.
From 30m chart - second 30m bar doji that closes below 30m OR. Same low as 60m hanging man.
Thanks for the CSCO chart. It reminds me of my IRA.
Zach-
Now that I am back at my computer looking at the chart, Jim is exactly right. The hanging-man is the best entry - a more aggressive entry is the candle just prior.
Jim's comment of the first 40-50 minutes being key applies to 90% of my trading now.
I agree, IMO, the best set-ups are the 1st 4-8 15 min bars. After that the charts become sloppy, wide & loose.
My 2 cents
I used to have a reliable source for pre-market gaps, movers (no longer). Anyone out there point me in the direction of resources that I can either create my own list or cut and paste a ready made list or two? Thanks, George
Would you please explain the significance of NR5 & NR7. I realize the NR means a narrow range candle and this is a good thing but why the 5,7? Have learned alot and enjoy your blog. Shared the giraffe with several friends who where gloomy and the image brightened up their day.
Jean-
The numbers refer to how many bars...NR5, the narrowest range of the previous 5 bars. NR7, the narrowest range of the previous 7 bars.
Thanks for the positive feedback!
Thanks Jim (for the detailed beautiful explanation)and Trader-X. How do you set targets for these kind of setups - gap up and then go short (reversal setup)?
Trader-X, do all your trades meet the target easily or you keep an eye on how it behaves and at times exit before the target is reached?
Zach
Zach - read the post I just put up (How I Trade)...this setup falls under the first example, and I will talk more about it next week. But in general, I am looking for it to fall to the FE. I watch the 50% retracement of the first 30-minutes low to high as resistance on the way down, as well as the OR low and a few other points.
Regarding your second question, I keep a close eye on all the trade I am in...that is why I generally take fewer trades.
And for those of you who have not put 2 and 2 together yet, Jim is the same Jim that posts on Wall St. Warrior (Trader Jamie's blog. I referenced him in a post earlier this week, and his comments are much appreciated!!!
Wall St. Warrior
Hello again, Why NR5,NR7 and not NR4,NR6, NR8 etc.?
Jean, NR3, NR5, and NR7 are the most popular. I don't think there is much reason beyond that...I don't actively look for NR bars. I would suspect the longer...ie, above 7, the more prone you are to serious whipsaws when a breakout occurs.
But it is a bit like asking why a 20 period moving average and not a 19 or 24...as X says, find what works for you.
X, great post and as always great blog. Dr. Brett said some good things about you on his blog today too.
Thanks for letting me participate.
RJ
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