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Monday, March 28, 2011

A few charts from comments

As mentioned last week, I won't be back to a normal posting schedule until the beginning of April, but I will try to make a few posts between now and then.

I pulled some charts of trades that were posted in comments, and marked the entries and exits (entries are a break of the trigger bar denoted with the arrow, exits are the black, dashed horizontal line). The Fibonacci lines are all plotted over the morning's opening range. Please click on the comments of the last few posts to read the analysis and other good discussions on setups.

Todd - regarding chart #1, the risk was a little higher as your entry was still in the retracement zone, even thought it broke the 50% retracement. As long as you were aware of that and willing to take the risk, it was a great trade!



Fred N. said...

These last few posts have really driven home the point of focusing on one thing. Thanks for the help.

Times of Your Life said...

nice trades...

Today (3/29) i traded PVH, 2 min
entered at the break of 10 bar, and exit at the fibonacci...

actually i jumped in at the break of the 6th bar and have a loss, @.@ cuz i kind of break some of the rules....but re entered at the 10th bar and make it back to even

Anonymous said...

Real happy you are back to posting on a regular basis X.

Jim T.

Randy said...

Anyone still trade 15-minute charts? I had a nice one in TSLA today, Thu, enter on a break of the 5th bar and exit at the fibonacci extension, fibs over the morning low/high.

Interested to know if anyone is still trading the 15.

Grove Under said...

Randy - I think the 15 min charts have been working much better than the 5 or 2 min, at least for me. When a stock gaps up on big news and trades with a larger spread, the 2 min feels like being trapped in a small closet with a few dozen bees.

Agreed, TSLA was a nice one. Another okay 15 min setup was DE (11th bar). GOLD had some nice but not perfect setups on the 2 min (7th bar) & 5 min chart (2nd bar).

But yesterday (3/30/2011), there were so many great 15 min setups that kept running higher. Some examples include: RAX (5th bar), OXM (4th bar). There were also many clean 15 min setups taking place in the middle of the day.

Grove Under said...

Trader X and community - I was an active trader in the early '90s, then early '00s, and then moved on to a non-trading life. I've been a lurker on this blog for the past several years, but have only began trading again in the past month.

I've been going back to the archives from 2006, and am surprised how little things have changed. What worked back then still works now. Similar setups worked back in the '90s, and I know they will work 10 years from now.

From a first time commentator, thank you and your community for your generosity, as well as keeping your trading message consistently focused and on track through all these years. Great discipline.

But there is one thing I miss from your earlier posts -- you used to have posts about pop culture/current events. Your excellent analysis of the Soprano's final episode brought back a lot of memories!

Javier said...

Yes Randy. Today, I traded MAKO on 15-minute charts. Entry 8th Bar High and exit at the fibonacci extension, fibs over yesterday´s low to today´s 15m OR high. Cheers.

Flowtastical said...

I migrated from the 15 to the 2/5 min chart because the open definitely does provide alot of opportunity. It is also much more dangerous.

I make trades based off of consolidations on the 15 min chart and TSLA is definitely one I would take. I took that same trade but on the 5 min chart.

Grove Under said...

Another day with many opening range trades based on the 15 min charts. Unfortunately, I didn't take them all, and I'm not sure if it's realistic for one person (at least not me) to screen, enter, and manage them all. But if you did, about 75% were successful based on taking profits at the FE.

These are all setups Trader X explained circa 2006. FE profit targets were calculated based on fib range of the opening 15 min range (although back then, he used prior day low to opening range high). I'm being more conservative. They are not all perfect setups, but I believe they were generally good.

However, please feel free to comment on any of these trades whether or not there were warning signs I may have missed.

[Sorry for lack of charts, might have to work on getting something setup]

DLTR (2nd bar trigger) - failed trade and questionable entry since trigger bar a bit big, especially with other better setups. If you took it, enough warning signs to scratch the trade or reduce loss (e.g. 5th bar gravestone, and also broke below whole number $57, and 5 min charts had similar warnings).
CCJ (2nd bar) - target hit FE and then dropped.
HRB (2nd bar) - extra juice on this one.
CIG (2nd bar) - see the magic of FE at $19.75, and then see a 2nd above FE trade setup (5th bar).
POT (2nd bar) - the trigger bar was not an inside bar, and this was not good risk/reward setup (based on fib target of opening range), but it still worked for a scalp.
VRX (3rd bar) - not a true gap open above prior high, trigger bar was red, so not a perfect setup. But it got to the FE and it made money.
CBG (3rd bar) - trigger bar was red, and setup was under opening range. If fib range calculated from yesterday low to opening high, then risk/reward ratio was about 1:1.
PCAR (2nd bar) - a failed trade, but on the 5 min chart, there were many warning signs to get out early.

Grove Under said...

Flowtastical and all 2 min traders:

I'd also like to graduate to the 2 min and be done with trading within the first couple hours. But I can tell it will require much more training.

Today (Friday, April 1) I thought FDX might have been a good opportunity.


First setup (7th bar), didn't really work except for a scalp at the high, and I was stopped out on the 11th bar. Was this higher risk because the trigger bar was red? Or was it a good opportunity that just didn't work?

Second setup (12th bar), the bar was green and "hammer like", however, it was far from a narrow range bar. It was profitable, but would you consider it higher risk?

I took the first trade for a loss, and passed on the second. What would you have done?

Thanks everyone and have a great weekend.

Flowtastical said...


First setup 7th bar doesn't look good to me because it just doesn't look like a hammer to me. If you're going to trade a setup, make sure it makes your eyes light up. Don't just pick setups.

12th bar makes more sense because its obviously a hammer. But take some time to think about what is a hammer, and why does a hammer work?

To me a hammer works because the stock gets down to a price and it gets rejected immediately (meaning its too cheap and people WANT it) within the bar causing the price to go higher.

The 2 min is great but there is nothing wrong with 15 min bars. Take a look at WYNN, that one setup on all the timeframes. What about VRX? Can you find setups on that too? I did on multiple time frames. What commonalities do these two stocks have on the charts? Take a look at the daily. A gap up, and threatening or making new highs. Work on your criteria for stock selection, you're going to see better results.

Anonymous said...


Thanks for the great feedback and examples, very helpful. I see them clearly...they're so obvious in hindsight without the noise and "distractions" of the market.

To trade the 2 min, I'll need lots of practice developing a solid and consistent routine to quickly screen 50-100 stocks down to a very manageable watch list.

Flowtastical said...

Three points

1-Get really awesome at putting together a watchlist in under a minute.

2-If you use esignal, play back the stocks bar by bar and find out how you analyzed trades that you made. Then go to other stocks like WYNN and VRX and play those bar by bar.

3-Visualize the setups in your playbook at night. If you have trouble with that then write out all your plays on paper. Then visualize the market giving you that setup, and you taking it. Visualize the process you take from entry to exit.

Chips and Salsa said...

Flowtastical and Times Of Your Life,

Thank you both for the feedback on my posted charts a few weeks back. Much appreciated.


Regarding your last comment, I'm interested. Do you always look at the Daily for each candidate in the morning to narrow and improve your stock selection? If I understood you correctly in what you were saying to Grove, do you find this to increase your number of wins significantly versus merely looking at the intra-day charts?

I used to manually eliminate any stock from my morning screener's watchlist that wasn't breaking out above overhead resistance on the Daily, either to a new 52-week high or outside of an obvious amount of overhead resistance.

E.g., POT broke above its Daily diagonal resistance today (4/1/11), going back to 2/14/11. PDC to CDO, 2-min, Beyond Fib Ext hammer set-up. I didn't catch this one, but noticed it after the close.

Anyhoo, is the Daily something you always check to narrow your list of candidates for the morning? I am going back and forth on this, trying to decide if I should resume this habit. I wonder if it truly increases the number of wins, and I wish I had some sort of stats on this subject, but I have no clue. :)

Always enjoy reading your comments, Flow.

Flowtastical said...

Chips and Salsa,

Thanks for the kind words.

That is what I like to trade in particular. Stocks that gap up nicely and has no resistance.

I love to look at stocks in multiple time frames. So if I click on the daily I see whats going on with it. Does it move smoothly or jerky? Is it at new highs or is it bouncing off lows? Then I click down to lower time frames. Hourly, 30 min, 15 min 5 min, 2min. How does it trade on those timeframes? Smooth or jerky? Are there alot of whipsaws? Sometimes I can eliminate stocks just because it trades crazy with tons of whipsaws. I believe stocks have personalities and I avoid the ones that I see don't trade well.

From this type of analysis take a look at FDX which was a stock chosen earlier. I've looked at that stock before and it just trades crazy. Even if it gapped up perfectly with no resistance I know to leave it alone. Look at the 5 min chart and the length of the bars and the whipsaws it has. Would you really want to be trading a stock that has 50 cent whipsaws? For me, it just doesn't work.

I've given alot of ideas but my suggestion is to spend more time finding out what you do well and do more of it. That's going to increase your win percentage exponentially.

Times of Your Life said...

you are welcome Chips and Salsa

about the FDX, i don't think i will enter at the 7th bar but will enter at the 12th bar in 2 min time frame

the 7th bar is not ideal entry:
1. the candle is red
2. it is off the support quite a lot like its not touching it and almost to the middle of the zone

but if you really have to take the entry at the 7th bar, you already hit a finbonacci resisitance at around 95.54 so profit need to taken out or you have to watch very closely at that level
Also, the 9th bar already give you warning about the bearish move

12th bar is good entry but have to watch it very careful,
1. green bar and with a nice hammer look
2. support by the Finbonacci

but you see the candle is actually in the middle of the 8 EMA so not exactly supported by it...maybe better to have the green body above the 8EMA for support. so watch carefully here to see if price level got stuck or any other warning candle

bl said...

These are all great tips and allows traders to bounce off ideas. I don't like to scroll so I chart up 4-8 x 5min charts per page, perhaps 2 pages, compare and contrast the unfolding charts, and trade the best set up. or 2)somtimes short WL(6) and scroll thru with 4 time frames(5 10 15 30) on 1 page or 3) have a premkt WL and charted up-news or eps plays(Friday:ndaq kkd med ccrt xrtx recn es dman exfo) or 4) trade just one "in play" premkt stock, like ndaq. Might not be the best candidates but more relaxing to have it pre open. Anybody trade like the above??

Grove Under said...

I'm still in the process of trying to figure out how to get my watch list setup quickly, and to then monitor them effectively.

I basically have 2 workspaces (pages) in Tradestation, some of which sounds similar to what you do.

1) Scan page: All screens and watchlist are here, with 9 smaller charts.
2) Trade page: Contains 5, 15 and daily charts for a single stock, with 3 smaller charts for monitoring active or potential charts. I also duplicate my watchlist here.

Once I go through my screens and identify good candidates, I create a watch list and chart the ones that look most interesting.

The challenge I run into is keeping the charts updated. For example, after a few bars, you generally know if the stock is on track for a good setup or not.

I then have to go back to the existing watch list, or scan and create a new watch list, and then finding a new stock to replace the stale one, without getting too distracted.

And all this activity has to take place while I'm keeping my eyes on potential setups and managing existing trades, if applicable.

With the recent post from Trader X regarding watch lists as well as comments from the community, this site has been tremendous help. Thanks everyone.

bl said...

Groove Under, I feeling when I'm scrolling I feel I'm "chasing" stocks on the WL. Today I charted up 12-15min(+pts) charts on 1 page, 15 min into the open and traded CIEN break of 2/15" for a small gain. I should have stayed with it and shrted it latter. I did have a premkt news WL: goog aapl cree kbh wag lvs from Seeking Alpha and 24/7, and might have done alot better as no scrolling/chasing an at the open WL. I noticed today(Tues) alot of stocks momo'ed up from flat open: lulu vrx mur. I think using the daily and even wk can work IF your just trading 1 or2 premkt stocks that are in play. If you have a long WL forget it-don't have visual time- use a single period chart: 2.5.10. or 15. No time to scroll thru a WL in all these different periods. Good luck