I was hoping to get back to some normal posting this week, but I have had a lot of things come up that pull me away from the computer once my trading day is through. There are some great comments, setups, and charts in the comments of the past few posts. I encourage everyone to check them out and participate in the conversation. I will try to post a few charts tomorrow or over the weekend.
I hope everyone is having a profitable week!
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Positive Trading Psychology - III: Framework
13 hours ago
7 comments:
On 4/7;
SPRD: 1) gapper above yesterday range. 2) fibs from PDL to Open. 3) candles 1 and 3 are hammers, candle 2 is a doji.
COO: 1) gapper above yesterday range. 2) not sure how to draw fibs on this??? 3) not an ideal setup with 4th candle as shooting star and 6th as reversal candle. but in the end a huge winner. wondering if anyone caught this?
Tajir:
Good question about how to draw fibs on COO. Had a similar situation on a different stock.
When a stock doesn't have a big gap and has a narrow range morning, it's hard to draw the traditional range fibs that are usefule.
Maybe calculate using prior day or current low to most recent high of day? Or forget fibs and resort to candlesticks, moving averages, whole numbers, etc.? Anyone have suggestions?
And what a nice move on COO. On the 5 min, looks like 11:40-11:50 was a good entry. And on the 15 min, 11:30 looked like a good hammer. Wish I caught this one.
TraderX,
You're building a nice community here with very good comments.
4/7 was a tough day for the method because of the Japan news. Lots of good longs got spanked. Mine were KSS and COST. Still did well on COST but definitely felt the pressure of the market on my positions.
SPRD and COO. Both stocks didn't gap too much so I think that is the problem. Find better gappers.
Today (4/8), I found more setups to choose from. All profitable, but left a lot on the table. Fib lines drawn on today's 15 min opening range.
WDC (15 min, 2nd bar trigger) Not the best gap open setup, but it still touched the FE, on the nose. But only got out with a third of the move -- some below minor support of $40.05 and the rest on the break below the whole number support of $40.
PDS (5 min, 2nd bar trigger) A marginal 2 bar gap open setup, but seemed to have some juice. After entry, fib lines drawn on opening range at 9:45, and it passed through the FE by one tick. However, I didn't exit at the FE and sold when it broke back below the whole number $15 level. Again, only captured maybe half the move to the FE. Setup also looked good on 15 min chart, but risk/reward not as good because of bigger stop.
BVN (5 min, 5th bar) The 15 min started looking good for the usual opening gap buy setup. But when I looked on the 5 min chart, that setup to buy above $43.91 (5th bar) looked good and spoke to me. I got conservative, waited for a break of $44, got few ticks slippage on the stop order fill, and got out 1/2 position at FE. Thought it was going to the moon. But sold the remaining when it started falling back to Earth and broke below the FE. In hindsight, the 5 min/11th bar and 15 min/4th bar gravestones were both good warning signs to protect profits.
***
On those days when the stock goes to the moon and Trader-X gets out at the FE, a comment you often see is, aren't you upset that you missed the big move?
Trader-X's response is that on some days, it goes right to the FE and reverses. This was one of those days.
I realize that there is no right or wrong way -- you have to either choose a higher batting average, or go for more home runs, or something in between.
The discovery process continues...
Tom C.,
Hope you're still out there. Just wanted to send you my appreciation and thanks for what you have done with Trader-X on this blog over the years.
I'm still going through the archives, and realize that you have a big part in this blog. What I appreciate is that your style is based on Trader-X, but with enough differences to provide alternative views. Same same, but different.
I'd be the first to admit that blogging isn't easy and is very time consuming (I wouldn't be able to do it consistently with my time commitments). And essentially posting the same setups and patterns that work year after year is like beating a dead horse.
But it's great to see your voice out there, even if it's from the archives. And if you're still involved in the markets, I (and I'm sure many others) hope to see more posts from you in the future. Thanks again.
Hey X, do you still trade the u-turn setups? I find these 3-4 times a week, and they tend to work pretty well. PAAS on 04/08 is a good example. My Fibonacci lines were over the opening range first three bars. I entered a break of the 4th bars high. It was red, but didn't close below the 50% retracement so I saw that as bullish. It made a quick move to the Fibonacci extension and I exited. It had a nice setup again above the Fibonacci extension and kept running.
John
I like seeing the faster timeframes, but I can't make them work and usually stick with the 15-minutes. Glad to see other commenters discussing them as well. I originally started trading 15-minute timeframes years ago after first discovering this blog, so thank you for everything Trader-X and Tom C.
Two from Friday were SLW long and CCL short. SLW was a break of the 5th bar's high and target of the Fibonacci extension - Fib lines plotted from the previous day's low to the first pivot of the current day. I was actually late on this entry, as a break of the 4th bar would have been perfect. The main rationale was support from the rising MAs and bars 2-4 never broke the 50% retracement and formed hammer candles.
On CCL, I went short later in the day after price broke the morning low and retraced to resistance from that area and falling MAs. Entered on a break of the 11th bar low and target was the Fibonacci extension - Fibonacci lines plotted from the previous day's pivot high around 12:30 to the morning's first pivot low. This was one of those Trader-X "magic" reversals where price bounced right at the Fibonacci extension. It was very low risk and the distance to my stop was so small I could take a larger position.
Have a good weekend everyone and keep the great comments coming!
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