Posted by Tom C.
I am fortunate that the first six months have been very profitable, so it allows me to take some time off. I took yesterday off, and because next week is a short trading week (due to the July 4th holiday), I will be taking a few extra days off.
Here is a trade that is a little different for the weekend. Trader-X often talks of my "u-turn" setup. One thing I look for is a gap above the previous day's high and a move back down to that high where price establishes support. It doesn't always happen, but when it does it is a great setup. As you can see from Chart 1, the 4th bar is a "hammer-type" candle and the 7th bar is a strong candle that rallies off the 8EMA (and both bars find support from the previous day's high - the black horizontal line).
I entered on a break of the 7th bar high and held the stock until late in the day. It rallied nicely, and made a run at the morning high but stalled out at the halfway point between the 50% level and that high (Fibonacci lines plotted from the morning high to low). I sold at $9.08 as price rolled over from the second attempt to break away from the halfway point (top yellow arrow, 2nd chart).
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