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Tuesday, March 08, 2011

A few trades from Tuesday

From Brian:

"I've been trying the two minute charts (I've been trading for about 8 years now, so I know what I'm getting into), and I am using your parameters. Fibonacci lines from the previous day's close to the current day's open, and a 5EMA. I traded BSFT today, and made an entry on a break of the 4th bar's high after price pulled back to re-test the current day's open. I had a running stop-loss (mental) of a break of the 5EMA, which didn't happen. I actually added to my position on a break of the 20th bar's high. I closed the total position when price finally broke the 5EMA, at $46.74. Price rallied past my exit but I was happy to get around 9 and 3% on both positions. Thanks!

Here is Brian's chart with his two entries and exit (black dashed line) marked:

Building on last week's post, here is another example of the simple setup discussed. AHD gapped up and the first two bars were strong. It topped out and made an orderly pullback with bars 3-8. If you plot your Fibonacci lines over the morning's low/high (the first two bars), the pullback did not close below the 50% level of the morning's range. The eighth bar was a green body, closed back above the retracement zone (RZ), and had support from a rising EMA. The entry was a break of the eighth bar's high, and exit was the Fibonacci extension. The trade provided over 4% profit in under an hour.

Note the new color scheme...I think I like this one best, as using white for the 5 and 8 EMAs makes them easier to see on the browser. Let me know what you think based on the different ones I have posted.



Anonymous said...

Nice trades. I actually traded BSFT on the 5 minute, entry on a break of the hammer bar #8. Good day today!


Times of Your Life said...

Nice trade for BSFT and AHD

I see the AHD too but did it with a 2 min...

entered at 19th bar

Flowtastical said...

Trader X, Nice trades though I have to ask:

Does your watchlist ever get too big that you end up missing setups? Any tips for sorting them?

I think I just had too many pop up lately and I'm missing setups. I missed AHD today but found BSFT.

Trader-X said...

Good trades guys.

Flow, my watchlist is big but I have been managing it the same way for years now. I sort by volume, so the highest volume stocks always float to the top. And then, I go as deep as I need to. If there are a lot of setups in the top 10 or 20, that is all I look at. If not I just keep scrolling. Realistically, I probably never go over 40 deep.

Other tips - I tend to delete issues priced over $100 from my watchlist. If you want to narrow it even more, you might consider other pricing parameters...ie, only looking at $30-$70 priced stocks.

Maggie said...

Nice! I haven't looked at this blog in almost two years. Good to see you are going strong. I like the reader trades as well.

Chips and Salsa said...

Trader X,

When you sort by volume for your watchlist, do you sort by relative volume? E.g., a stock that is currently trading today at 3x its average daily volume will be higher on the list than a stock that is currently trading today at 1.5x its average daily volume. (Average daily volume over, say, 3 months, for example.)

Or is your watchlist sorted by current volume? E.g., a stock that has traded 500,000 shares today since the open will be higher on the list than a stock that has traded 250,000 shares today since the open.

Dominick said...

Hello X. That AHD trade would have worked well off your older 15 min. setups also. But your newer 2 or 5 min. setup certainly captures more of the move.

Flowtastical: I have the same distraction problem and missed it also. I am going to give the following a try. My trading platform (Think or Swim)allows me to open several (up to 24) charts within one window. I plan on plugging in the symbols of the gappers that look likely to breakout into the indivdual charts. Hopfuly this will allow me to monitor a handfull of symbols at a glance. I'll give it a try and see how it works out.

Also like X, I screen based on price $5-$50 and volume.

By the way X, if you don't mind divulging, what are the volume parameters you screen for? And as always thanks for all you do.

Michael said...

Good trades. Chips and Salsa, I have read in many past posts that X sorts by current volume not relative.

Flowtastical said...

TraderX, Thanks. Yeah I've done that as per your older posts. Great advice on filtering out price above $100, will use that.

My platform is lightspeed and their filers are pretty horrid. I'm doing a free trial of www.equityfeed.com and I think its real nice.

Ken said...

I use RealTick like X, or at least he used to. X, do you still use RT?

Anyway, I get my watchlist from the gap lists they provide. I dump them into Excel, delete stocks prices above $100, and often delete stocks below $20 though I sometimes leave them. Then I cut and paste back into the RT program and it actively sorts by today's volume. Sounds like a lot of work, but I can literally do the entire process in less than 60 seconds. Since the earliest I take my first trade would be 10 minutes after the open, I have plenty of time to spare.

Hope this helps some of you if you have the ability to cut and paste into Excel, and then back to your trading program.

Flowtastical said...

Ken, nice advice.

Trying to perfect my process like yours.

loanme5 said...

AHD was my my only trade yesterday. I use 10 minute charts and plot my Fibs over the morning range. I had the same entry and exit. Feels like I am finally getting it. Thank you X.

X, when you say you sort by volume, is that a volume increase relative to its "xx day" average volume? And is your watch list a new list of gappers every day or a larger list of stocks you always watch?

Again, thank you for all your help. It is really unbelievable, and I appreciate it beyond measure.

Jean said...

Trader X, In your morning sort, do you also consider the spread between the bid and ask? Wider spreads create additional risk dollars which is not good. Although, do notice that the spread tightens when volume comes in.