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Tuesday, March 10, 2009

Tuesday charts - 031009

There were some nice pullbacks today. WYNN was the best trade for me.

I entered on a break of the tenth bar's high. The tenth bar was a narrow-range, inside bar that formed on the halfway point between the OR high and the 50% retracement. There are some who might have entered on a break of the fourth bar high - I didn't for two reasons...the first two bars were very wide-range and price needed to work off that move (ie, pullback or move sideways for several bars); the second reason was that I prefer the setup to form on support - in this case, the halfway point (where my entry actually was).

I exited at the FE...note how price reversed exactly at that point. Sometimes trades are perfect.

AVAV gapped down and made a textbook "push through" setup. The first and second bars rallied and closed green. The third bar formed in the tail of the second and at support from the halfway point between the OR high and the 50% retracement. I exited at the FE.

I usually hold half of my position on setups like this, and AVAV would have been perfect as it continued to rally and gave a nice exit signal on the eighth bar. But I had too much going on, and did not have the bandwidth to focus on it (no complaints - it was still a good trade!).



fxTradr said...

Hi X,

I'm a noob at equities day trading. How much, if any, would your strategy be effected by a reinstitution of the up-tick rule and a change to no naked short selling? Why?

Taking short positions as you do, does that constitute naked short selling?

Thanks in advance.

Trader-X said...

Naked short-selling is against the law. Your broker will not let you short stocks it cannot locate, meaning if they don't have the shares to lend, you can't short the stock.

The up-tick rule would be a minor inconvenience, but it would not affect the strategy overall. The uptick rule has been there longer than it has not been there (at least for me as a trader). I would prefer it is not re-instituted, because I think it is unfair and illogical. But that is just my opinion.