I rarely go into the trading day with a bias - and I don't recommend it - but I admit I was looking for shorts from the open and was more aggressive on the short side today. So both of these setups were riskier than my usual trades.
I took BA after it formed multiple narrow-range bars, culminating with a NR5 and an inside bar. I entered on a break of the 5th bar low, and closed the position at the halfway point between the low and the FE (Fibonacci lines plotted in the traditional X style - the previous day's high to the ORL).
RMBS gapped down and printed two weak bars. It made a textbook pullback before resuming the downtrend. I entered on a break of the 6th bar low (the 6th bar was weak and left a long upper tail). I was holding for the halfway point between the low and the FE...price never reached that level and I closed the position at the end of the day.
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5 comments:
Hi Tom,
Thanks for the post. How do you decide what your target is? Sometimes you target the FE and this time midway to the FE? Thanks Hector
Argh. I was watching BA but didn't pull the trigger. Good trades.
Hector, it depends. I would always like to hold out for the FE, but that is not always feasible. If I entered the trade well above the ORL (or below the ORH for a long), and I have several positions, and the move down is quick, I may cover at the halfway point as I did with BA yesterday.
I also watch the price action at the halfway point...BA left long lower tails over multiple bars signaling that the area was strong support.
Tom, I also shorted BA more or less where you did (but with the 5 min timeframe), for a nice gain. I have seen your chart (10 min timeframe) and I have compared it with mine: I'm really surprised because
"my 5th 10 min bar" it's NOT an inside bar like yours; it's NR but not so narrow like yours and definitively it's not an inside bar. I'm charting with Ninjatrader with data from IB: I guess this might be a problem with the data, but I am wondering the impact that issues like this could have in real trading. What do you think about?...have you experienced something like this before?...Thank you very much in advance!
Luis, I am not sure why your bars are different. I have never had an issue, and have used my charting program (Real Tick) for the past ten years.
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