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Thursday, March 10, 2011

MW - 031011

I buy my suits there, and the stock presented a nice setup today. I won't go into a lot of detail, as it is the same setup we have been discussing for the past week. My trigger bar and exit are marked (black arrow, black dashed line), and you can do the analysis on your own. Total profit was a little less than 3% in 15 minutes.

Note - I'm still playing with the colors to see what looks best on the web. Is white for both the Fibonacci lines and EMAs too hard to read/too confusing? Suggestions?



Fred N. said...

Trader-X, I notice most of your setups go on to greater profits after you exit. How do you get out of the mindset of not letting that bother you, and not trying to get every dollar possible?

Thank you, wonderful site.

Doug Reiss said...

Great trade. Question - since the trigger bar was so narrow, would you put your stop on the low of the previous bar? Thanks!

Times of Your Life said...

@.@ very nice trade...
I did a few but mostly got stuck after a level...i guess the Trader X and Tom C's special note apply hahahahha

the color of the chart and line are great for me...easy to see...
let see what other say hahahahah

Trader-X said...

Fred - trying to get the exact low and high of every move is a trader's ultimate downfall. In my opinion, if you don't develop the discipline to take profits on a consistent basis based on your strategy, and regardless of what happens to price after you take your profits, you will just ride the roller coaster of profits up and down (and probably, ultimately, lose). Also, even though many stocks continue after I exit, many reverse at my exit and never re-visit those levels.

Doug - yes. My stop would have been a break of the 3rd bar's low. Good catch.

Thanks for the feedback Times!

Jim said...

X - The 5 & 8 EMAs are so close (exception would be huge gaps) it seems that an intermediate 7 EMA would suffice and reduce clutter.

Tajir said...

Trader X,
thanks for sharing. It is absolutely amazing that you were able to make a good long trade when market in clear trend day down. I guess you don't care where market wiggles in your trading decisions. However, I am curious how you were able to find needle in the hay. For stocks priced between 10 and 100 and average 10 day volume of 500k shares, there were 1357 gap downs out of previous day's range and 47 gap ups. The probability finding a good setup in the long is obviously very low. I will appreciate your insight on how you manage such days where you have huge number of gap list with almost everything gapping on one side or the other. thanks in advance

Trader-X said...

Jim, I have an affinity for the 5 and 8!

Tajir, I have detailed how I build my watchlist, most recently in a post a few days back. I encourage you to read the multiple posts I have made. If you are looking for a further way to refine candidates, consider looking at only gaps above/below the previous day's range.

Tajir said...

Thanks TraderX.
Another question, (I asked this question earlier, worded differently, in one of your previous post that you deferred to answer later). Since you mentioned that you are trading only mornings (with 70 to 80% win rate), what is average number of trades you take daily/weekly. I am wondering if you have daily profit targets (win/loss) that triggers you to stop trading. Is it wise to set targets? Do you have losing days with your method, if so, how many have you seen in a row. I am trying to setup a trading plan and wanted to make sure that I do not while trading do not get frustrated if I do see losing streak. thanks again

Trader-X said...

Tajir - weekly, 15-20. I don't set daily targets...I used to, but I don't any more. There are positive and negative arguments about doing it...I can't say which I fully support. It is always good to have a target, because you can't hit something if you don't have it. But, it is bad if it forces you to over trade to try to hit your target.

I don't have losing days. I hate talking about that, because it brings out a lot of anger from readers who don't believe me and won't accept it. But I have spent the past decade plus refining my trading to take fewer trades that are higher quality, and I am able to closely manage those trades.

Having said that, there are plenty of traders who have a lot of losing trades and days, but are still extremely profitable. I can't succeed with that mindset, but I respect those who do!

Chips And Salsa said...


Trader X,

Thank you for your response about watchlists on the previous post, and of course, thank you for all of your wonderful posts and insights! :)

I am glad to see folks are making good trades this week. It gives me hope, since my week has been really tough, especially Thursday (3/10/11) with all of its choppy market action.

Below are 4 shorts I took this week. NVS on Monday, COP on Tuesday, CIEN on Wednesday, and DELL on Thursday. All are on 15-minute charts, as I believed things would be clearer for me this way. Alas, no dice.

Every set-up is a pullback to the 38.2 Fib Retracement and 5 EMA with a bearish candle acting as the trigger bar. I just can't figure out why I'm failing at this set-up over and over.

Maybe, in general, going long (instead of short) offers less volatility and therefore more orderly, consistent results? Or maybe this specific set-up is better for longs rather than shorts? Maybe I need to trade a faster time-frame? Maybe just a unusually volatile week? What am I not seeing here?

Any feedback from anyone is much appreciated, as I am feeling a bit demoralized. :[

Here are the charts. The first arrow indicates the trigger bar, a break of which would trigger an entry to get short. The second arrow indicates the bar that stopped me out at the high of the trigger bar.

NVS (3/7/11):

COP (3/8/11):

CIEN (3/9/11):

DELL (3/10/11):

Times of Your Life said...

not a good entry, the 5th bar has a small tail at the bottom of the candle and didn't closed below the RZ. more risk involve.

green bar, more risk and the entry is right above the whole number, add more risk

ah...that is why you need to find some more better setup before you enter a trade, and you have to keep your mind clear and relax yourself

remember everytime you enter, there is always a risk, no 100% perfect entry, so if something is not right, it add to your risk
like tails, candle color, finbonacci, EMA, whole number, or half way point of the RZ

Flowtastical said...

Chips and Salsa,

Write more in your journal and reduce your size if you are trading poorly or not feeling it.

Study your setups intensely.

I had some trouble in March as well but it just means I have to double my efforts studying the trades I made.