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Monday, March 23, 2009

The Dow moves up 500 points...

and all I got was this lousy EOG trade.

Actually, it was a good trade. But it is days like today that make me re-think my new "only trade the first few hours" philosophy.

EOG gapped up and printed a strong first bar. The second and third bars narrowed in range, with the third bar resuming the rally, closing strong, and closing at a new high. I exited the trade at a $1.00 gain, just below the R2 pivot line (yellow line).



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13 comments:

Brent said...

lol. A lot of late day opportunities for sure. But EOG was a good trade. How many trades did you make today, and how many do you make on average?

Thanks for a great site.

Trader-X said...

Hey Brent - four today, on average four to six. Thanks for reading.

Jerry said...

I actually like your new strategy, but I prefer using the 5-minute bars. I pick up more setups and better moves.

This is the most informative trading blog out there. Thanks for all your efforts.

And RIP RJ.

vp3434 said...

Hi Trader-X,

I'm having trouble getting into trades in time. Today, for example, I found a number of good setups, but by the time the trigger bar ended and I made my calculations for how many shares I wanted to buy, the stocks had already ripped higher beyond my target entry price. Do you run into this problem?

Trader-X said...

vp3434 - yes, every day. I have always said I miss more trades than I make. You get better at it with experience though.

Jerry - you are right about the 5-minute charts. But the 10-minute give cleaner moves imo. However, I miss trading the 5-minute and the faster pace.

Tyler said...

vp3434,

I used to have the same problem problem trying to figure out how many shares to buy and missing trades. I solved the problem by printing off a spreadsheet to help me trade quicker.

Make one column of different size stops. For example, $.10, $.15, $.20, etc. up to your max stop. The next column will be your risk per trade divided by the stop, essentially how many shares you can trade given each stop. I then round these numbers off to give me a cleaner, less cluttered sheet that is easy to scan right before I enter a trade.

This allows me to focus on the setup and then know almost instantly how many shares I can trade.

It may also be helpful to print off another sheet that has the same thing for half your risk in case you lower share size for market conditions.

Tyler

vp3434 said...

Tyler,

That's a great tip. Thanks.

vp3434 said...

X,

If you see a potential setup forming, will you place a stop order in anticipation or do you wait for the stock to trade to your entry price first?

For example, if it's 10:08 and you like the first 3 bars of a chart, and the fourth looks like it's going to be a good trigger bar for a long entry if it closes where it is currently trading, will you place a buy stop order at the top of the bar and wait to see if the stock trades through once 10:10:01 rolls around? Or do you always wait until 10:10:01 before placing the order?

bl said...

Hey X,
Have Tom C call you at the 2:30 magic hour for rally/sell off trades to make! SPY DIA QQQQ all had 2/15" hammers. 30" charts on a day like this prove mighty...run run run.

Trader-X said...

vp3434 - no, I never enter before a bar is complete. It can change drastically even in the final few seconds.

vp3434 said...

X,

A follow up question, if you don't mind: Let's the say trigger bar ends and you've determined that there's a good long setup. Do you ever place a stop order at the high of the trigger bar and wait for the price to trade through and breakout or do you wait for the breakout first and then place a market buy order hoping that the price doesn't move too far above your target entry point?

Thanks.

Trader-X said...

When a trigger bar completes, I put a buy stop in one cent above that bar's high.

vp3434 said...

Got it, thanks!