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Friday, November 12, 2010

NBL - 111210

This is a good chart to study. Price gapped down and made an attempt to rally. It failed and price declined below the open. At this point it was too far away from the 8EMA to consider an entry, so I made a mental note to watch it. Price attempted to rally a second time and failed at the declining 8EMA.

I entered on a break of the 13th bar's low, after price closed below the open for a second time. I covered the position at the FE less than twenty minutes later.

I'll try to post more over the weekend.



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10 comments:

Randall said...

X,

If you look for certain setups, does that mean you will pass on other setups that you know that have proven to work in the past?

Ken said...

That was definitely a great short setup. 83.50 was the low of the day before as well. I had an alert on the stock for 86, but pulled up the chart near the open because of the high volume it was trading. I also was in a few other trades at the same time, or I probably would have been watching it closer to enter the trade. Nice job! Have enjoyed the setups you have posted in the past as well.

http://independent-trader-ken.blogspot.com/2010/11/yesterdays-trades.html

Anonymous said...

QUESTION

want to know what was your reaction when you observed the 17th & 23rd bar both with big lower shadows indicative of a probable bottom.

cegr

Anonymous said...

Hi X,
Entering on a break of the 13th bar's low seem to me as a very aggressive entry.In the chart we see the opening bar and the 5th bar's low as a possible support level. Although the resistance of the 8EMA it is more then possible that the price move will go up
(as i saw in the past in many cases it indeed went up or just went to a long side walk).
In your opinion, as you see the chart now, isn't it better to enter on a break of the 5th bar's low (It happened on the 16th bar), or still on a break of the 13th bar's low, depending on the very good karma of yours...:)))
Thanks for everything and best regards,
Hagay

Trader-X said...

Randall - yes, I only look at my handful of setups...the focus is what keeps me doing good.

Anon - I covered the position before the 23rd bar. The 17th bar might have caused concern if its high was taken out, but it wasn't.

Anon - I am not sure I understand your question. You say the entry on a break of the 13th bar's low was aggressive, but then ask if a better entry would have been on a break of the 5th bar's low. First, the 5th bar's low was not taken out on the next bar, and for my trading that is what I look at. Second, the 13th bar represented a setup after the opening line was broken for the second time, which increases the odds of a good setup. Having said that, if you have a system that had you entering at a different time and it works for you, then I am all for it!

Thanks for reading.

eyal said...

Hi X,
when you trade, Do you give any weight to the claim that Gaps tend to close. Because is see that alot of your trades may go in the diraction of the Gap. (SHort on Gap down and vice versa)

Anonymous said...

Trader-X,

I've read how you only look at the most recent 2 days (intra-day charts) and nothing else (if I follow correctly).

Does this mean you do not look at the Daily Chart time-frame to be aware of longer-term overhead resistance/support in the form of, for example, the 200-Day Moving Average, or a previously established Daily Price High/Low that could serve as resistance/support?

Doesn't that add risk to the trade, or lower its probability of success, if, say, the 20-Day Moving Average was just above my upward gapping stock set-up without my knowledge?

I would love to not have to analyze the Daily Charts and instead just analyze the current and previous day's intraday charts (15m charts).

The freedom of streamlining and simplifying my morning analysis is VERY appealing, but I'm unsure of how to avoid pitfalls that exist on the Daily (longer-term) chart.

How do you address this obstacle? Do you simply not find it to be an issue?

I just wonder because a stock can gap up/down from anywhere and still be stuck in a LOT of congestion on the Daily Chart.

Again, sincere thanks.

I check for your posts daily!

We're hungry out here for your knowledge!

Flowtastical said...

Trader X,

I have changed from a short time frame to the 15-30 min charts. I think it works for me.

I know your exit is on the low of your entry bar but are there candles that can form on subsequent bars that would make you exit early? Like Doji or a reversal bar?

Trader-X said...

I don't look at the daily chart. I am not saying you shouldn't look at it - if you can work it into your analysis and it helps your trading, by all means do so. But for me and the short-term trading I do, it is more of a hindrance than a help.

Flowtastical - yes, if I see obvious signs of a move ending I will take money off the table. I have always been a proponent of having fewer open positions so you can properly monitor them. Having said that, it is a fine balance - you have to give a trade time to unfold if it is a solid setup, and not allow yourself to get shaken out.

Flowtastical said...

Thanks Trader X!