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Monday, April 04, 2011

MCP - 040411

MCP was an interesting trade today. At first glance, it was not a setup that jumped out at me because of the long upper tail on the first candle. However, the first four bars showed a lot of resilience as they refused to close below the 50% level of the opening range (which, in the case of MPC, was the first candle's range). The fifth candle appeared to signal a bearish turn, but the sixth candle formed an "offsetting bar" and closed back above the retracement zone. Price had support from a rising moving average, and I entered on a break of the sixth bar's high.

I closed the position just above the Fibonacci extension at $65.



Flowtastical said...


I was trading MCP on the 2 min chart today which was a bit of a disaster. I moved up to the 5 min chart but really did not like the 75c risk involved with playing the offsetting bar on this stock.

Could you rate this trade you took? I am interested to hear about your confidence level on this trade since I thought about taking it but passed.

Instead, I ended up focusing on TCK on the 2/5 min setup which had a breakout, followed by some inside bars at $55 and made a second leg up.

Grove Under said...


Nice trade on MCP. When I see those offsetting bar setups, they usually seem to involve bigger range bars. So my initial reaction is to pass.

Was your initial stop relatively far away at around 62.98, or did you go down to the 2 min chart and place it around 63.29? Thanks for your insights.

Grove Under said...

Some good 15 min setups today (4/4):

PAAS (2nd bar trigger) - Risk/reward to the Fib Extension (FE) was barely over 1:1, but at least you banked it pretty quick. Unfortunately, I missed this, and scratched a mediocre setup during lunchtime. And also missed the consecutive hammers around 2:00pm.

TCK (2nd bar) - Flowtastical already mentioned this stock, and it was also great on the 15 min. On the 5 min chart, good chance I would have been stopped out at the 10:05 bar, just prior to the big move. That would have been a heartbreaker.

TC (3rd bar) - I entered late (bad entry price), and ended up having to scratch within the hour. Plus, stock had no juice.

WPRT (3rd bar) - The trigger ended up being a red hammer, but I entered based on the 5 min chart (hammer like 4th bar). I got shaken up and scratched the trade when it came back down into the opening range. Should have followed the rules and not messed with the 15 min charts.

CE (3rd bar) - The trigger bar hammer had a wider range, but looking at the 5 min chart, there were 4 consecutive hammers all finding support (and relatively higher lows) on yesterday's high. Interesting looking pattern! I saw this one a few minutes too late.

STO (2nd bar) - Bad setup. Learn from my mistake. Could have ended up being one of those bad setups that worked, maybe if the Dow was up 1000 for the day. But in hindsight, it's best for me to just avoid this setup. Bottom line: it just doesn't look like the others with a strong 1st bar.

NEM (2nd bar) - Trigger was narrow relative to the opening bar, but it had a tall upper wick. However, the risk/reward was good. Plot the fibs from prior day low to opening high, and see how the FE was hit on the nose! In hindsight, yet another trade I unfortunately missed.


As evident above, I have an issue with too many setups taking place after the 2rd/3rd 15 min bar. Can't take 'em all. So I'll need to learn to become much more selective.

As always, any comments or overview of your trades (especially 2 and 5 min charts) is very much appreciated.

Times of Your Life said...

@.@ MCP very great trade

Flowtastical said...


Go check out TraderX old posts on "How I trade" and find his setups.

I looked at your stocks and the setups were not good on many of them.

Compare the hammer setup on CE to the other setups. A huge difference. If a bar closes near the midpoint of its range, it is already telling you that the setup is sloppy.

loanme5 said...

I saw that set up, but I felt the width of the sixth bar was too wide for me to hold to the bars opposite end. X, do you ever consider that or do you just accept the risk of a good set up regardless of the size of the candle?

Karl said...

X, I took this trade and wanted to see what you thought:

Tuesday, 5-minute chart, Fibs over morning range.

Entry break of 8th bar. Support from 5EMA and bounce off 50% line.

Exit fibonacci extension, 2.5% profit.


Karl said...

The ticker might help: PBY.

Grove Under said...

Thanks for the feedback, good point on going back and getting the fundamentals tightened up and in order before I try and become more of an artist.

CE was interesting on 4/4 not necessarily on the 15 min, but more so on the 5 min chart. Not sure if you saw that bullish wedge with multiple consecutive hammers. I don't think that's a standard Trader X setup, but it was an interesting pattern.

Nice trade on the PBY. With only an $0.08 stop, I probably would have taken that if I saw it!

Grove Under said...

Grove Under has left a new comment on your post "MCP - 040411":

Failed 15 minute trade - good setup but bad luck?

CAVM (2nd bar trigger) - the trigger wasn't a true hammer, but it was green and had a narrow range. Upon breakout, the price shot up and reached the halfway mark to the FE (opening range fib calculation), and then came crashing down to my stop.


Downsides - didn't gap up above prior day high, but strong 1st bar. Going down to the 5 min chart, bars 2 through 5 with long upper tails showing some weakness.

If I saw this pattern again, I would likely take it, and chalk up this loss to part of the usual 20-30% that just fail.

Or are there some other big warning signs that I missed? Thanks.

Anonymous said...

grove, after a huge (read wide range) first bar, I would expect a pullback. There was a lot of white space between the second narrow range bar and your moving average, which confirms price was overextended. The setup itself was good, but I would have entered on a break of the 4th or 6th bars, once the moving average caught up. Just my .02.


Flowtastical said...


Two points.

1-CE had perfect hammer on the 3rd bar 15 min chart.

2-CAVM Nice chart and nice setup because its making new highs. One major factor I consider before making a trade is the liquidity of the stock.

Do you use a level 2 to execute orders? I was looking at this stock as well today and I avoided it because the spread was just a bit wide and although the volume was OK it wasn't amazing enough for me to say OK I must take this. So wider spreads means more volatility in this moves and a bit easier to get stopped out.

Grove Under said...

Very good point about considering the "white space" from the moving average before taking the trade. I had a brief thought before the trade that if I didn't take it, the Trading Gods would take the stock straight up 2 points without me. Hindsight...LOL.

Thanks for the clarification on the CE trade, I misread your original response.

Unfortunately, I don't have level 2 on Nasdaq, although I have something similar on Tradestation (Market Depth) for the other exchanges. Do you find it helpful beyond just monitoring the b/a spread?

And timely comment about spreads. I was initially disappointed I missed the somewhat risky DMND 2 minute setup today (3rd bar trigger on April 5). It screamed higher 3% in 6 minutes to barely pass the FE (plotting fibs on prior close to current open).

What shocked me was the $.05 to $.20 spreads. Combine that with the manic trading activity...I would certainly have felt like I was riding a bull in the rodeo. And who knows what kind of fills I would have gotten.

I'd rather avoid those kinds of nauseating rides (my stomach ain't what it used to be) and go for the smooth but quick trip!

Flowtastical said...


Love your 2 cents. Comment more!


I love stocks that have alot of liquidity and fluid movement.

In my point of view, more liquidity = better linearity on the charts.

If you look at stocks with wider spreads, a random order in the market can cause the charts to whipsaw and hitting some stops.

To me this is a stock selection criteria so its very important. Continue to find out what works for you and do more of that.

Michael said...

IMGN was insane this morning. I entered on a break of the third bar's high (5-min) and just closed at 10.80...I was holding out for $11, but it failed around 10.93 and I decided to lock in some profits (10% to be exact).

Grove Under said...

Michael, nice trade!

There have been a few good runners this morning (4/7), but I just couldn't find many "clean" and familiar setups today (especially on the 5 and 15 min) that triggered. So I had no trades today.

Anyone else find any good setups this morning (Thursday)?

Anonymous said...

IMGN kept running and blew through $11. Good trade though. You can't go broke taking those kind of profits.

Flowtastical said...

Today 4/7 COST and KSS on the 2 or 5 min worked out well.

bl said...

Thrs set ups: RT MCP IL BKE STZ
2,5,10,15,30 periods