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Thursday, May 21, 2009

Happy Memorial Day

Posted by Tom C.

I thought I would post a few charts ahead of the long holiday weekend. Analysis is brief, but you guys know the routine!

IRE gapped up (yesterday) and traded in a narrow-range for the first 2.5 hours of the morning. The 12th bar rallied off of the 8EMA and closed above the OR high. My Fibonacci lines were plotted in classic X style (previous day's low to the OR high). I entered on a break of the 12th bar high and closed the position at the FE.

MCD gapped up (yesterday) and rallied from the open. If closed above the OR high and traded in a consolidated range for an hour or so. I entered on a break of the 11th bar high (note the yellow arrow points mistakenly to the 3rd bar...I don't have time to correct it right now), which had support from the OR high and a rising 8EMA. I closed the position at the FE.

GME gapped down (today) and formed the opposite of Trader-X's "push-through" setup. I entered on a break of the 3rd bar low, and closed the position at the 1/2-way point between the low and the FE (Fibonacci lines plotted from the previous day's high to the OR low).



Anonymous said...

Hi Tom,

On the Mcd trade, you said you entered on the 11th bar, but the arrow points to the 3rd bar.

A question, do you alway plot your fib lines trader x old way, and if not always, how do you decide to plot the fib intraday vs previous day to current day.

Tom C. said...

Hector, that was a mistake on my part. Thanks for catching it!

Regrading Fib lines, 90% of the time I do it classic X-style. If I am going for quick profits and a fast trade, I will do them over the high/low of the morning's range as X outlined in his new trading setups earlier this year.

Randy said...

I actually traded IRE yesterday. I feel enlightened.

Thanks for a great blog.

the beach apartment said...

Tom: there is a question regarding this setup I wanted to ask to X, but given the fact you have highlighted it I will ask it to you...When I first read the setups X trades (http://traderx.blogspot.com/2009/02/how-i-trade-revised-february-2009.html) I first understood that the 5 setups could be "mirrored": this is when X writes about a "long" setup there is the possibility of "mirroring" the setup to create a "short" setup with the same characteristics (and this is what I think you are doing here, a short push through). But after reviewing the charts on the blog my actual thought was that the 5 setups are used, mainly, in the way they are written, not in the "mirrored" way I thought at the beginning. Could you elaborate a bit on this please?...I still have the doubt after your post...

Anonymous said...

These trades unless verfied like oonr/traderam blong, i would consider charting after the event. Trading live & proving it is another ballgame.

Trader-X said...


Anon - I would suggest not reading this blog, then.

Tom C. - nice trades.

loanme5 said...

These anonymous guys are hilarious. Why do they always feel as though someone has to prove something to them? Weird.

Anyway, Hector asked one of my questions. Thank you, Hector. My other question is about risk. Tom, do you use the other side of the trigger candle as your risk like X?

Thanks and great post again.

Please verify that you are actually Tom C. ;)

trader-s said...

Hi Tom & X, thnaks for your time and effort.

The question is for both of you:
I nothiced that when analysing the trades you don't reffer to:
1. market direction.
2. setups on the daily chart.
3. is the stock is (on daily chart) strong or weak.

Are you taking these things into account in your trading?



Donato said...

Hi Tom & X . . .
I stumbled across this site a few weeks ago and began studying your charts. The deeper I got into the blog, the more I knew there was some real value there. As well as the lessons on life to be gleaned along the way. These past couple of weeks I've made a point to spend a few hours each day studying the charts you have posted and their setups.

Although I have studied and understand the basics behind technical analysis and candlesticks, pulling it all together and making business like decisions has, for the most part, eluded me. Until now. Although I have a long ways to go on my studies, at least now I can see the light at the end of the tunnel. It seems so bizarre, I used to never even scan or run a screen for stocks, I'd just pull them out of a hat willy nilly.

Quite possibly the single best piece of general advice I've run across is "to get good at one strategy and one strategy alone".

Oh yeah, I love all of your other web sites and have generously bought the things you've been selling (just kidding!). Enjoy the long weekend!

Tom C. said...

Thanks X.

Have a good Memorial Day everyone and I will answer comments when I get back.

fozzking said...

do either one of you guys look at average true range of a stock? for instance, say a stock has an ATR 1.00. lets say the stock is at 50, and gaps up at the open to 52. would you trade this stock long, given you liked the setup, even though it's average move was already at 2x the normal trading range (i.e. gapped up 2 dollars vs 1.00 move on an average day). i have been looking at charts and sometimes second guess a trade because a stock seems to have moved too much already based on its average move per day. i have been scanning the gaps with trade ideas and one of my settings is a minimum range of $1 per day. thanks for your help.

Anonymous said...

I see that you took those trades off a 10 min chart. Is a 10 minute chart the lowest time period that you trade from?

Tom C. said...

beach, I agree that the X's setups are to be used the way written and not "mirrored". I still like the setup from this post though.

loanme, yes - unless otherwise indicated it is the opposite extreme of the trigger bar.

trader-s, I don't take those things into account. As X always says, I am not advising you to do what I do. You have to do what works for you and if you are successful using those factors by all means continue.

fozz, I don't look at ATR but your logic sounds right. It seems like a good way to filter and make your list smaller.

Anon, I also trade 5-minute charts.

the beach apartment said...

I saw your answer Tom, thank you for your help (and you have asked several other questions from me, this is Luis Miguel/TheBeachapartment)