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Wednesday, February 25, 2009

Wednesday charts - 022509

MVL was discussed in "Comments" yesterday. I traded MVL on the long side...here was my rationale:

1.) The first bar closed green and above the 50% retracement of its range.
2.) The second bar was a "fill in the tail" pattern that closed above the halfway point between the 50% retracement and the morning's high.
3.) The third bar was narrow-range (NRM) and also closed above the halfway point referenced in #2.

I entered on a break of the third bar high. Note that before taking out the third bar's high, price dipped below that bar's low and then rallied (as opposed to the other way around, which would mean the trade was stopped out). I covered at the FE six bars later.




GAS was an interesting trade today. It is a variation of Tom C.'s "u-turn" and while far from perfect, it was compelling:

1.) The first bar was red but left a lower tail and closed at the halfway point between the 50% retracement and the morning's low.
2.) The second and third bars closed green and above the halfway point referenced in #1.
3.) The fourth bar was strong, left a lower tail, closed at its high and above the 50% retracement, and was a variation of a "fill in the tail" pattern.

I entered on a break of the fourth bar's high and covered half at the halfway point between the morning's high and the FE. I covered the other half at the FE. I felt good about holding the remaining half for the FE target because price could not close below the halfway point between the 50% retracement and the morning's high on the seventh and eighth bars.



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5 comments:

sunyata said...

Couldn't find much today in the way of X trades. How bout you all? And thanks to everyone who replied to my questions about MVL and PWR. Much obliged!

S

Sia said...

Hi, new here. Thanks for the charts of examples. How do you find stocks to trade? Do you search for strength/weakness in previous day, after hours or premarket activity? If you post any losing trades, this would also be very helpful.

nine said...

Hey X,

For GAS, could an alternate entry be above the high of the NR eighth bar? Rationale would be, it bounced off of support at the halfway point between the OR high and the 50% retracement.

Your blog is part of my daily routine - please keep 'em coming!

Tom C. said...

Sia - X trades gaps up or gaps down for the current day.

Nine - I see what you mean, and it obviously worked. It was riskier due to the resistance that turned price down and the big red bar preceding it. But if you were willing to take the risk, I see the rationale for a bounce off that support. Just remember too that the later the setup the more risk.

fxtradr said...

Sia - Check out 'Welcome and Links to Key Posts' at the top of the page. Then read all the links below "Welcome". That should help you out.