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Saturday, October 30, 2010

3% in six minutes

Three different views of the same chart for you to ponder over the weekend. This setup happens many times a week.

Chart #1:

Fibonacci lines plotted from the previous day's close to the current day's open. My thoughts - strong first bar, orderly pullback, no resistance to the Fibonacci extension (FE).

Chart #2:

Fibonacci lines plotted over the high/low of the opening range. My thoughts - orderly pullback that didn't break the 50% retracement of the opening bar's range, "hammer-type" candles with (bullish) long lower tails.

Chart #3:

The horizontal line represents a "whole number" - $19. My thoughts - nice target that corresponds with the FE mentioned on chart #1 above.

My actual entry was a break of the fifth bar high. My exit was $19.



Stephen said...

Nice. I have to get some focus. Thanks for trying to beat into everyone, I truly think it will make the difference between success and failure.

Thank you for sharing.

Dominick said...

Hello X, any reason why the entry was not on a break of the third bar high?

Thanks for sharing your techniques. It is appreciated.
It is also nice to see you posting again. I enjoy dropping in to be greeted by the pleasant suprise of a new post.

Trader-X said...

Thanks Stephen. Dominick, a strong argument can be made for that entry. I wanted to see a little green, and a move off the 50%. But a break of the third bar's high was absolutely a good setup as it still closed above the 50% retracement.

bl said...

Thanks for previous reply. Looks like mostly 2 min charts, >$10, vol ranked? I sometimes look at Group WL: coal, steel/ore,fert for Group participation so as not to get confused by the many ways gapping stocks from various groups behave. Thanks

Ken said...

Thanks for sharing your setup and trade. I'm guessing that for this type of trade you want to see it start moving in your favor almost immediately. Where would you have dumped the trade if it went against, through the 50% fib level?

HAGAY said...

Hi X,

Trader-X said...

ken and hagay, thanks for reading. Both of these questions can be answered by clicking "Welcome and links to key posts" at the top of the page.

In short, my stop is the opposite extreme of the entry bar. And I don't consider the general market condition when I am evaluating setups.

Javier said...

Hi X,

Nice set up X !!
How many set ups are you using nowadays with your 2 minute candles ?
What Fib. Extensions are you using ?

Happy to read you again.

Dominick said...

Thanks for the response X enjoy the rest of the weekend.

Times of Your Life said...

thanks Trader X

I learn something from every post you make

eyal said...

Hi Trader X
Realy enjoy reading your Blog - your method is very intersting and inspiring.
alot of traders that want to teach a certain technique usualy open a chat room while trading real-time. why dont you start one? ;-)
i know i will be defenity willing to pay to join it.
good to have you back!!!

Trader-X said...

Javier, I have about five setups I watch for. Eyal, no way. I don't need the money and from a time commitment standpoint, I am happy just making one or two posts a week. If they help people think about new ways to look at things then I am happy! And, I don't think I would ever want to do anything during my actual trading time that would jeopardize my results.

Flowtastical said...

Trader X,

On avg. how many stocks do you trade per day?

-with your new 2 min timeframe
-in the past with your 10 min timeframe

Anonymous said...

X, On any chart, would you consider to cancel an entry order if next bar traded above/below but finished with range of trigger bar?

Thanks so much.

TL said...

It's so great to see you blogging once again! Would you do a post (or just a few examples) to illustrate the 5 setups that you are trading now?

Thanks a lot!


Anonymous said...

X, welcome back, We miss you greatly.
BTW, in your opinion, why is the 10 and 15 min charts not working anymore?. A lot of traders are having a hard time.

Also, since you are now trading the 2 min charts, how many trades are you making per day? I am thinking this will lead to overtrading on my part.

Thanks, Ralph

Anonymous said...

Hi X,

I am glad you are going to post once or twice a week. I rather have that then you burning out and not posting at all. Do you still read trading books or are you just tweaking your system, thanks for sharing. Hector

Trader-X said...

A lot of questions. Here are a few answers:

Hector - I haven't read any in a while. Is there anything good out there?

Ralph - why do you say they aren't working any more? I still review different timeframes, and see setups daily. What are some examples? And my trading is usually limited to the first few hours, so overtrading is not an issue. Also, I don't take more trades than I can actively monitor.

TL - I hope to post them all in the upcoming weeks.

Anon - no, not usually. Either the target is hit or the stop.

Flowtastical - 2-5/day.

Flowtastical said...

Trader X,

Of all the stuff I've followed over the last few years only the words you write make the most sense to me.

It has made a tremendous impact on my trading and I am glad you are back. Thank you.

Anonymous said...

Hi X,
I haven't read any books for a long while. I stopped paper trading a long time ago; I just got into bad habits and treated it like monopoly money instead of real money. I just recently started paper trading again, results are positives. Do you still recommend reading trade the move?

Do you think the yankees are still going to sign cliff lee? He didn't look invincible and he's 33 years old. Hector

Trader-X said...

Flowtastical, thank you for the kind words (and thank you to everyone else as well) - they are much appreciated!

Hector, the Yankees should have had Cliff Lee this year!!! Then again, he didn't help in the World Series. Regarding tradethemove, I will always recommend it because I would not be trading the way I do today had I not found it almost 10 years ago. But just like anything else, there is no holy grail. You just have to take what you find everyone (including here) and use it to develop your own style.

Times of Your Life said...

Trader X and Other Great Traders,

For today,

will you take the following trades (all at 30 min time frame):

1. EOG
- short at the break of the 3rd bar low?
from my analysis, its not working because the first bar has a long tail and 2nd bar has another tail at the support, and 3rd bar is green. Also, its far from the MA.
um...how is this analysis sound?

however, its a nice trade if long at the break of 7th bar high, very very nice @.@. will you go long at the 7th bar or you will go for the 6th?

2. PWR
-will you go long at the break of the 6th bar high?
maybe you will not go long beacause the 6th bar is not closed enough of the support area?

ah...just want to see my thinking is in the right direction or not...

Many Thanks

Anonymous said...

Hi X,

I have mixed feeling about not getting Lee this season. The core 4 is getting old fast, and they would have gone to world series with Lee. On the other hand, trading Montero is tough since the Yankees are going to need a catcher soon. Cervilli is okay, but no bat.
Paper trading not going good. Need to be more patient and wait for a good setup, not medicore.

joshua said...

@hector, trade real money for a few months, maybe 3-6, after that, switch back to paper trading and you will feel it is real money. you will not think it is monopoly money. i paper traded for the first month, went live for probably 8 months, and now back to paper trading. i am thoroughly enjoying the paper trading and it feels just as real as a live account. i enjoyed the trade the move book. it helps you see the basis of what X looks at.

@K, what dates are you talking about?