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Sunday, April 10, 2011

Reader comments, Fibonacci lines, and meditating

I am amazed at the comments that are popping up on the posts - you guys have a lot to contribute! I want to foster the collaborative environment by posting comments, setups, and charts from the readers several times a week. To make it easy on me, I need to get some uniformity in how you list your setups and trades; it will allow me to post them and provide consistency for all the readers.

As such, I am asking everyone to use the following format:

1.) Classify the trade as a success or a failed setup so everyone knows what they are looking at from the beginning. It will help people get in the mindset to provide the proper feedback if you are asking for input.
2.) Post the pertinent details - symbol, timeframe, how you plot your Fibonacci lines. If you use MAs, post what you use or just say "standard Trader-X MAs".
3.) Post your entry - "I went long on a break of the X bar. I went short on a break of the X bar."
4.) Post your rationale for taking the trade, along with any red flags or concerns you had.
5.) Post your target, and where you exited if it is different than the target.
6.) Post any questions you have (if you are asking for input from others).

You can post any other details you want, of course. But at a minimum please include the points above.

A few updates:

I told you guys last month that Kernan from TRADEthemove.com had agreed to do a guest post on different methods of plotting Fibonacci lines. Unfortunately, he has been affected by the Japan tragedy as he has friends and family there (so his time has understandably been occupied with more important matters). I received an email this week and he told me he hasn't forgotten, and hopes to get something to me before the end of the month.

I also promised you guys months ago that I would do a post about meditating - something I believe in passionately and practice daily. A few of you have left comments, and I still plan to post on meditating but it is a bit lower on my "todo" list. I will get to it, though. But you should not wait for me before you start looking into it - you can't do it wrong, and the benefits are amazing.

I hope everyone enjoys the end of their weekend.

_______________

17 comments:

Flowtastical said...

Trader X,

What a tremendous idea. I agree, the comments are going strong as of late and its going to be great capitalizing on everyone's efforts.

On meditating, I have really struggled to find a process that works for me. I found this video about two years ago...

http://vimeo.com/6153913

..and have used some ideas there as my 9:20 mental game warm up. Looking forward to hearing your ideas!

Grove Under said...

OFFSETTING BARS - Why They Work

There were a few questions the other week (mine was one) regarding offsetting bars. Although what I have to share doesn't answer the question about stop placement (I'm assuming use a bigger stop, or go down to a faster timeframe to find alternative smaller stops), my comment below does help to understand why they work.

If you blend the two offsetting bars together (assuming the 2nd bar is green) and look at them on the next higher time frame (e.g. see offsetting bars on 5 min then go to 10 min chart. Or, see offsetting bars on 15 min then go to 30 min), you will see that they form...a hammer!

No wonder why offsetting and "hammer like" bars work so well (assuming other conditions also setup properly).

For a much better explanation and visuals, as well as other variations that create these "stealth" hammer bars, check out the stockcharts.com tutorial link below.

Link to stockcharts.com

I'm sure this is all very obvious to the candlestick experts. However, this discovery was an a-ha moment for me. So I hope this also helps others become more comfortable with the offsetting bar setups.

Tomross58 said...

Trader x,

I made my first comment a couple weeks ago just to say thank you for this great blog and continued to read all the previous archived posts and am now up todate. The comment section is equally as valuable with great information.
Anything to do with meditation and self discovery is of great interest to me. I now have my TV off during trading hours,,,which means no CNBC or news. I dont answer e-mails or allow myself to be distracted with anything while trading. Here is a free music site that I have on during my day and it seems to help lesson other distractions. I googled it...http://www.shoutcast.com/radio/meditation
This was suggested by another trader so I take no credit but just passing along.
I usually have the "nirvana radio-music and relaxation" playing softly all day.
Thank you to all and I hope to add value soon.

Tom

Anonymous said...

Anxiously awaiting any information on meditation. I have always wanted to do it, but seem to be scared to try. The anonymity of the Internet allows me to admit that.

Chuck

Attitude Trader said...

Even though you're not discussing futures anymore I still get your post updates, so I saw you mention your meditation. You already know how important I think our mental state is to our success, so I'm really looking forward to hearing (reading) what you have to say about it.

In the meantime I finished a post about a focus exercise I learned from Mark Douglas years ago.

@ Flowtastical: Wow, must be in the air. I posted that video on my blog on Friday. It's pretty amazing.

Thanks X.

About Me said...

Grove,

That's why your after market routine is going to make you the most money. Click on charts on all timeframes and you are going to see a lot of interesting things.

Attitude Trader,

Yes! Working hard on my mental game lately and results are pretty amazing.

Times of Your Life said...

ahhhhh yesyes looking forward for the meditation

Grove Under said...

[Sorry about the length of this comment. Will work on keeping these shorter/more crisp.]

An interesting experience with SNY today, one that I thought would end in disaster. You know, the trade fails, then you start going down that road thinking how you're going to get even with that stock.

SNY
(3 trades - Fail, Fail, Success)

15 min chart, fib from yesterdays low to opening 15 min high, standard Trader-X MAs.

1ST TRADE - Fail:
=================
Went long on the break of the 2nd bar.

Rationale - Gap up open with a strong green opening bar. The 2nd bar setup was a narrow solid green bar

Concerns - "White space" from the 5ma below. But based on other similar setups, this looked pretty good.

Target - The fib extension. Unfortunately, my stop below the 2nd bar low was hit after a couple bars.

2ND TRADE - Fail:
=================
Went long on the break of the 5th bar.

Rationale - One bar after my stop was hit, the 5th bar turned into a hammer and also bounced off the 5 ma (and if fibs are drawn over the 15 min opening range, it bounced right off the top retracement line). Looked much better than setup #1, so I thought it was payback time.

Concerns - It needed to clear the top of the opening range, but I thought with all the stars in alignment, why worry. I also recognized that mentally, I didn't get upset, but I knew I had a mindset of getting back to even. I didn't think this would cloud my judgement, but time would tell.

Target - Fib extension (so I can get even). But I got spanked. My stop placed below the low of the 5th bar trigger was hit.

3RD TRADE - Success:
=====================
Long on break of 8th bar and waited for break of opening range high confirmation ($37.16).

Rationale - I had just gotten stopped out on the 8th bar. But after the 15 min bar closed, I noticed it was going back up (it figures, without me) and was approaching the opening range high. On the 5 min, I noticed that a hammer appeared (24th bar/11:30 AM). I got on board after giving up $0.05 waiting for confirmation of a break above the opening range high.

Concerns - The 8th bar trigger was not a hammer or hammer like. The trigger bar closed well within the retracement zone. Was giving up $0.05 too much? And I had a slight feeling that I might be chasing the stock, looking for any excuse to get into any trade just to get revenge.

In hindsight, it was definitely a higher risk setup, but I believe there was enough there to justify the trade (or was this a bad setup that just happened to work?). Please feel free to provide any comments to keep me honest.

Target - Forget the FE target at the $37.50ish area, I'm riding this with a trailing stop to the moon! Trailing stop was for the bar to close below 5 ma, then place stop below the low of the following bar (if a lower low). It triggered on the 20th bar/2:30 PM.

Looking back, the trailing stop gave a lot of room in case it really did go to the moon...but the tradeoff was giving back a lot of profit.

In the end, I only recovered about 1/3 of my losses from the first 2 failed trades. Not great, but it could have been much worse.

http://imgur.com/ndHpA

Questions - Any feedback on what I may have overlooked when entering these trades is always appreciated. Thanks!

***
Quick comments on other 15 min setups:

FRX - 15 min chart, bought above high of 3rd bar (hammer). Exited on close.

OMX - 15 min chart, sold short below low of 7th bar (it hit the declining 5 ma). Exited on close.

...wish I only took these types of trades every day, and stayed away from the sloppy setups.

Grove Under said...

Tomross58:
Thanks for the shoutcast link. I had forgotten all the great channels they have since moving over to Pandora. I gotta go revisit.

Attitude Trader:
I like what you're doing with your refreshed blog. Looking forward to see more of your posts in the future.

About Me:
Great point about reviewing the charts and doing your homework. I'm always seeing something new, or coming up with questions.

Times of Your Life said...

SNY not working at the 2nd bar, maybe, too much white space like you said, need to catch up a bit...

also after the 3rd bar, maybe good idea to get out cuz its off setting bar that cancel each other and with a big top tail very bearish @.@, i think...

David A. said...

Great blog. I am greatly interested in hearing about your experience with meditation as well.

Anonymous said...
This comment has been removed by a blog administrator.
Anonymous said...

1.) Successful trade with two entries today, Tue 04/12.
2.) INVE, 5-minute, Fibs over the morning range. Standard X MAs.
3.) I went long on a break of the 4th bar. Second entry was when price broke $4, and pulled back perfectly to test that level. I entered on a break of the 11:25EST bar.
4.) Strong open, pullback, range narrowed with the 4th bar. Red flags - the fifth bar actually took out the 4th bar's low, but my stop was the low of the 3rd bar because of the narrow range.
5.) My long shot target was 4, but I was going to sell for a quick profit if it reversed at the fibonacci extension. After it broke through I sold at $4, but then re-entered per the above rationale. Held for $5 and was done for the day.

RB

Marc W. said...

Nice trade, RB. Did the trigger bar low get taken out before or after you entered the position?

Attitude Trader said...

@ Grove Under

(I know this is a little old now but thought it best to keep my question here where it's relevant)

You mentioned that you listen to Pandora - I really fell for it last year and just renewed my Pandora One subscription for another year.

I wondered what you listen to (using Pandora) while trading (if anything). I created a station using Bombay Dub Orchestra and then seeded it with some other songs. 99% of them are just instrumental so it works well for me while I'm trading.

Just want to make sure I'm not missing anything good on Pandora!

Thanks,

-AT

Grove Under said...

Attitude Trader:
I usually don't listen to music when watching the markets. Silence seems to work the best for me, so that I can easily tell if I have too much chatter going on in my mind!

I'm sorry I'm not too much help with good ideas for Pandora. I'm probably one of the more "generic" (i.e. boring) listeners of Pandora. I usually listen to classic and/or relatively familiar artists, but with a somewhat eclectic mix.

Channels include Pink Floyd, Journey or Boston from those classic rock years, to Jake Shimabukuro who plays the ukelele in a "how does he do that" kinda way. My mood might divert me off to Brian Eno or some Deep House style music, or perhaps something by 10000 Manics or Marie Digby. Earth Wind and Fire is my good vibes channel. All relatively standard stuff, but all across the board.

Thanks for the tip on Bombay Dub Orchestra. Sounds very interesting, I'm going to check it out. And who knows, I might need to start turning the music on during trading hours!

Attitude Trader said...

@ Grove

Ok, not trying to beat a dead horse here or anything (especially since X has to approve all of these comments!), but I've added a Pandora widget to my main blog so you can see the songs that I've bookmarked and even go to my station if you're interested. It's down a ways so just scroll down until you see it.

-AT