It appears Blogger has been down for the past 24 hours, so a lot of stuff disappeared, I haven't been able to post, and people have not been able to comment. Hopefully things are back on the right track, and anything that vanished will be restored shortly.
I am hoping to be back next week, provided my family situation stabilizes. Before Blogger exploded, the comments were on fire. If anyone thinks they have a valid setup that didn't work (and wasn't addressed/explained by another reader), note it in comments of this post. I will pick a few to highlight and review over the weekend (or on Monday) and explain why I thought it was valid or not valid.
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48 comments:
X,
I took a short trade in ARMH on thursday (5/12) on the 5th red hammer bar (15 min chart) that found resistance at the 50% fib level ala old school trader X.
Everything looked good with the red hammer, 50% bread and butter pullback setup, but it decided to move up strongly and take me out later.
Anyone see something I dont? This felt like a strong trade to me.
Major blowout! I'm still waiting for Wednesday's post to reappear on my blog.
Continued best wishes,
-AT
5/13 trades
VICL gapped up, then closed its gap and more. The 4th 5m bar tagged the RZ high, but was red, had a tail, and closed at 5ema. I see now that the ema wasn't downsloping though. I shorted under the bar and got stopped by a few pennies, and soon after it trended down to hit the OR low.
YHOO gapped down, but had a nice green opening 5m bar. The 3rd and 4th bars were hammer-like, closing above the RZ, though their tails touched the bottom of the RZ. I bought above the 4th bar and got stopped out quickly.
DDS was likely not valid, but I liked that it bounced off the rising 5ema 5m and the bottom of the RZ. Though the bar wasn't narrow enough, I took the trade with minimal shares. It tried for awhile, but then it got dragged down with the market and stopped out later. My mistake.
I missed seeing the GFRE 8th 5m bar, though I'm not sure if the setup is valid. It had an upper tail and closed under the flat 5ema. It was also .03 wide, so if I had bought it .01 over with a stop .01 under for a .05 stop and sold at the FE, I would've had a risk/reward ratio of almost 1:6. The ride wasn't entirely clean, though; it almost hit the FE and then dropped below the OR high before continuing.
I missed seeing the DF 8th 5m bar, though later price came back for another shot. I didn't take it though. It almost hit the OR high, and later a wicked spike down went .01 under the setup bar's low.
PNSN had a nice opening 5m bar, and the 4th bar looked OK, though it was under the RZ. I didn't see this one in time, though; it hit a bit beyond the FE and dropped back later.
I've traded GME today , 15 min chart, Fib. plotted over the first bar (from high to low).
The first bar closed with an upper wick , second bar was very weak with a long real body that closed right befor the "whole number" 27 and the 38.2% Fib. line.
Went short on the third bar (brake of 27) .
Target (Fib. 0% line) was hit pritty easy,at the 7th bar, as there was no major pullback.
Please comment your opinion on this trade.
i would like to join the wishes of Attitude Trader..
Thanks
US
Hi Baron,
if i understood you correctly, you plotted the Fib. lines from the day befor high to the second bar low (15 min chart).The first bar was realy weak but it was followed by 3 srong bars , that showed strength and hardly had upper wicks. The first bar high(or open) was already broken on the
3rd bar.
A pullback happens when a major trend is interrupted by a shorter move on the opposite direction and then the major move resumes.
If the "shorter move" is longer than the "major move", then it becomes the "major" one , and you can look at it as a reversal , or at least as a warning for what you thought was the "major trend".
This is the case with ARMH.
If you will plot the Fib. lines over the Open Range (high-low of the first and the second bars) maybe you'll see the idea from another way:
you can see that the second bar has closed above the 50% line , a sign for strengh , and that the following bar continues and brakes the 100% line, there for the stock is showing more strengh than weakness , and i wouldn't short at this stage.
hopping you'll find it useful
have a nice weekend
US
Hi Everyone,
I was curious if anyone trades stocks with a "Trader X" style that don't gap. I do occasionally and wondered if anyone has success applying the same rules to non-gapping stocks.
For example, I shorted BTU today (5/13) after the 30 minute inside bar. I placed my over the first 30 minute range. Price pulled back to the RZ nicely before resuming its move down. I bought back at 58.73, which was the 100% Fib extension.
Does anyone else trade this way once in awhile, and if so, do you have the same type of success as gapping stocks? Thanks.
t-money, yes I used to. I would prepare a daily watchlist and take X trades based on that. It works well, and I would find many on my daily watchlist gapped anyway. But, at the end of the day, it is just easier grabbing the daily gappers and using those. Plus I think the gappers offer some level of protection against the general market direction.
ya blogger is down 24 hours...
crazy...
@.@ today is Friday the 13......ahhhhh......
Volume and Order Type:
Hi Everyone,
I have a question about how you all deal with volume and order types. I often find that due to my risk level I need to purchase 1,000 or more shares. However, even in stocks that are active, with several hundred thousand shares traded in the morning, I see bid and ask of only 100 or 300 shares. When I take the time to check level two pricing, I often see sparse bid/ask levels away from current bid/ask.
So, how do you all deal with this? Do you enter with a stop limit order to reduce your variation? Do you enter with a stop market order and just hope you get a good fill? Do you reduce your share amounts? Do you avoid these kind of stocks?
Jay, I don't look at level 2 but I will say that I regularly trade 1-3K share positions. As long as I am on the higher volume stocks, I don't have many problems. Once every few weeks I will get what I consider a bad fill, but it is nothing that greatly affects my P&L. I sort my watchlist by volume and usually focus on the top 20 so I rarely go into any thinly traded issues.
Jay,
I tend to avoid stocks with wide spreads and low volume. They have more whipsaws and stop me out more often.
I don't mind a stock having 100-300 shares showing as there maybe be hidden size behind what is shown. If there is a 10 cent spread that worries me a lot more.
As Scott said, if you focus on the highest volume names you should be in great shape.
t-money,
Unfortunately, my responses were wiped out by Blogger, but I do remember your talking about a formula for opening range percentages.
It's not that impressive or anything, but I simply take the difference between the opening range high price and the opening range low price. Then I divide the result by the stock's opening price of the day.
For example:
OR high is $70 and OR low is $68. Opening price for the day is $68.50.
Step A
$70 - $68 = $2.00
Step B
$2.00 / $68.50 = 0.029%
So, the opening range is roughly 3% of the stock's opening price.
Grove,
I hope my joking didn't come across the wrong way. Your comments on red bar / green bar, just made me think of that scene in the movie where Happy says, "Green jacket, gold jacket," and I love that movie. I just didn't know how well I conveyed what I meant. Sorry if that came across poorly. Like I told James, I worry about stuff like that. :]
Chips and Salsa,
Thanks for the explanation of your opening range %. I was wondering if you have tested it or how you use it.
For example, do you trade using rules of what opening range % is to large? Like a scenario if a stock has a nice setup but the opening range % is greater than say 8%, you would pass on the setup. Thanks.
t-money,
I like to use the opening range percentage to narrow my candidate list. If I have two great set-ups, but one is 8%, and one is 3%, I will definitely take the latter. I really put opening ranges of greater than 4% at the bottom of my list, and I will only consider taking them if I find nothing narrower.
I certainly do witness some larger opening ranges panning out from time to time, especially on big up or down days in the general market. But I see far more smaller opening range set-ups delivering powerful moves a greater percentage of the time. I have no hard numbers, but from personal observation, I'd say I've noticed that 2 or 3 times more often, the smaller opening ranges outpace the larger opening ranges.
Gaps vs. Non-Gaps
I will trade a stock that is able to move outside its previous day's range within the first 10 or 15 minutes if the first few bars are strong and decisive, even if a gap did not occur. I treat it the same way as gappers, with Fibs over the high of the opening range and low of the current day (for longs; opposite for shorts), and I find that it works well.
But like Scott said, for me it depends on what other candidates are out there. If there are some beautiful gaps setting up, I will tend to take those due to their momentum. However, if a non-gapper is ripping to a new 52-week high, I will make it more of a priority, assuming a good set-up is there.
t-money,
Your VSH trade on 5/3/11 looks great (5m chart), but I don't remember where you said that you entered. I would've probably entered on a break of the 9th bar's low, which may have been what you stated. Opening range is ~3%, Fibs and 5/8 EMA's working solidly in your favor. Looks like a great trade to me, sir. :]
I took PAY today on a break of the 7th bar's low, 15m chart, and it is looking good so far. Spread was a bit iffy getting in though. Had some slippage. :/
Market was tricky today, but when the SPY and QQQ printed long upper-tails on their 7th 15m bars, I figured it was the perfect time for the PAY short. Thankfully, it worked out.
Chips and Salsa:
No worries at all, I didn't read anything into your comment. In fact, I appreciated the levity!
*****
I was away from the markets for the first hour this morning (5/16) and came back to see a few potential setups.
Here's one that got away...
ENOC, 15 min chart, 6th bar setup to buy was nice, but I passed because the hammer was slightly red.
However, if I would have looked at the 5 min chart, it looked much better and I probably would have taken it.
My goal this week is to get back to being very selective. I also passed on a couple less than perfect setups this morning that I would have easily taken last week.
Looking at this from a positive perspective, I have been successful. Onward to patiently waiting for the next solid setup!
Trader-X,
The similarity between this clip and your sudden appearance in my life in 2010 is uncanny. Thank you for making me a drastically better trader. I am truly "getting it", and I'm so grateful to you and the community here for coaching me "for free," as Chubbs says.
http://movieclips.com/3CqHm-happy-gilmore-movie-chubbs-sees-pro-material/
Chips and Salsa,
Thanks for the feedback on VSH (5/3). I actually wasn't trading the 5m chart, but was trading the 15m Inside Bar. So I ended up just getting in below the low of the opening range at at $17.45. The 5min chart looked good too though.
PAY looks great. Congrats, I wish I would've seen it. I couldn't find any good gappers today, but did manage to trade WYNN below the base at $145. I used the 11:35 5 minute bar as my trigger to go short.
5/16 trades
Grove Under, I was also watching ENOC today. I saw it dip under the top of the RZ and then come back over it on the 10:30 5m bar. I was hoping for that bar to end up narrow, but after it completed, I thought it was too wide, but in retrospect it was an offsetting bar and would've been a good setup. Where would you have gotten in on the 5m chart, perhaps the 10:55 bar?
FE 5th 5m bar looked good, though it was in the lower part of the RZ. The 5ema was still rising, so I got in. It pushed for about .25, but then it made a lower high, which should've been my cue to sell, but I stuck it out and got stopped.
TISA 6th and 7th 5m bars were hammer-like, their bodies were above the RZ, and the 5ema was rising, so I got in. It almost hit the high, then made 2 more lower highs, so I got out just before a spike down would've hit my original stop.
ELN wasn't a gapper, but I saw it pushing up nicely for an hour. It retraced to the top of the RZ and hung out there. The 20ema 5m was also holding it nicely. The 11:30 bar was a penny wide, so I waited for more confirmation and got in a couple cents higher. It almost stopped out, but then it made a run later; when that run faltered a bit, I took my profits.
A question to everyone about trade management: Do you try to hold out for the FE? Or do you try to partial at the OR high and then hold the rest for the FE? What if the trade falters? Do you move stops up? I saw the lower highs on FE, but I kept the faith, held the original stop, and didn't get rewarded. After that I sold TISA a bit earlier after it showed the same pattern. Then I sold ELN even earlier!
ABIO 6th 5m bar was a red hammer at the midpoint of the RZ and at the rising 5ema. However, when the entry occurred my phone rang and I answered it, causing me to miss the price I wanted! I still got in a bit higher with less shares. It hit the OR high, where I sold half, and then it stopped out at b/e. Next time, I won't answer the phone!
JCP gapped up and started sinking. I drew fibs around the first 4 5m bars. It retraced, but didn't touch the bottom of the RZ. I considered getting in on the several narrow bars, but then it spiked up, which scared me, so I stopped watching it. However, that bar had a nice upper tail, and the next bar, the 13th at 10:30, was nice and small, right under the RZ, and would've been a nice short setup. It went straight down beyond the FE and just kept on dropping. It would've been a very nice win. Lesson to learn: Keep watching failed setups for new setups.
SPMD 8th 5m bar was nice and tight, only .04 wide, and the retrace went to slightly below the midpoint of the RZ. The 5ema was also rising. However, the spread was also .04, so I passed. It went very nicely, hitting way above the FE before dropping.
Shorting below 5th 15m bar on NYX. I hope the SPY and QQQ don't bounce hard off their 50-day SMAs. Fibs over 1st 30-min OR, 5ema. Worried about a double bottom on this stock on the 5m. Stop above 5th 15m bar.
NYX is setting up a 15m hammer retest on the Fib extension from my earlier post, if you're looking for a clean entry.
Stopped out on NYX above Fib Ext. Net 2R winner. Wish I'd taken JDSU or MU today. But I didn't have a lot of prep time this a.m.
5/17 trades
Nice job on NYX, Chips and Salsa. JDSU and MU didn't gap enough so that I would see them; are they on your permanent watchlist?
GFRE 10th 5m bar, hammer at top of RZ and 5ema. Tried selling as it dropped from OR high, but bids ran away from me. Finally sold for a .10 gain. Two hours later it almost hit the FE. I need to be more patient.
LDK gapped down. The high volume 3rd 5m bar doji with a long lower tail actually looked good for a buy, but I didn't get in. The 12th bar at 10:25 looked good for a short, so I got in. It was very slow going, and I finally got out for a .11 gain. It never made it to its OR low.
HPQ gapped down and had a nice 5th 5m bar in the RZ. I didn't see it in time, however, and it looks like the setup triggered very soon after the bar completed. It dropped very nicely far past the FE.
Klaorman,
Hey, thanks, man. When I used to swing-trade, I regularly maintained a daily permanent watchlist, occasionally adding and removing candidates as needed.
Now that I exclusively day-trade, I no longer use a permanent watchlist. Like X and a few others, I create a new watchlist every morning to be used solely for that day's trading. When the day is done, I delete the watchlist (after studying all the charts taken and passed on) and create a new one the next day.
Each morning I run a scan for stocks trading above their previous day highs/lows, looking for longs/shorts. I run the scan ten to thirty minutes after the open, depending on whether I'm trading 5m or 15m charts. I want to give potential candidates some time to break beyond their previous day ranges.
Gappers are, of course, quickly spotted, and I also look for strong first and/or second bars breaking the previous day's range. If a candidate falls back slightly within its previous day's range but provides a textbook set-up, I will still take it, as long as all my criteria are met, which is mostly following X's criteria.
I prefer the gappers over the non-gappers, but if a clean, orderly, textbook set-up presents itself on a non-gapping stock that is breaking out of its previous day's range with strong bars, I will jump on board if/when a low-risk spot comes along.
Klaorman:
Sorry for the late reply, but regarding ENOC, you're correct on where the setup bar looked good to me.
Chips and Salsa:
Thanks for sharing your comment on creating your watch list, very interesting. Since this is an area I'm still working on improving, you have some good pointers in there.
5/18/11
Looking at RIMM above 4th 5m bar, Fibs over OR, 5ema. May take a while longer than that to set up though. Also CBS, ATML, TCK, same idea. Will watch how they unfold here.
Taking ATML above 4th bar. Other set-ups fell apart before I could finish typing. :D
UA, 5m, break above 5th bar, same details as ATML.
FCS, 15m chart shaping up for a long above 2nd bar.
RIMM waking up, finally. Entering on break of 7th 5m bar, as 7th 5m bar would be an offsetting bar.
Last one, then I'll stop, I swear. FCX (as opposed to FCS), long on break of 4th 15m bar, 5ema, Fibs over 1st 30-min range.
Never entered RIMM, as it never triggered.
RVBD looked good, but I missed it while I was typing all this stuff.
CBS and TCK had entries set up a bit later, but I can't type everything I see in time. Now I see why folks don't tweet or blog the moves they make in real time. It's too much to keep up with.
hahhahaha yesyes too hard to do so much at once
Hey guys,
I took a trade in DE today where outside of the risk on the candle being a bit large but in comparison to the price of the stock and its morning range not horrible,I didn't really see much else wrong with it so wanted to get people's thoughts. Fibs placed over the opening range. I entered on a break of the low of the 4th bar. It was the narrowest bar of the morning and the previous 2 candles had upper wicks in front of 85.5 so I saw that as resistence as well. Is there anything that stands out to you guys that would have prevented you from taking the trade.
Thanks,
MikeS
Chips and salsa, kudos for your ongoing contributions. But I have to say, respectfully, that all the realtime calls will muddy up the format here which is to solicit feedback on trades and setups from X and other readers. If they have to wade through a lot of comments to find postswhere they can contribute, they may give up. Also, I don't think your comments always get posted realtime. I remember from some past discussion that X's nephew reviews comments for spam and then posts. If he doesn't do that until six hours later one day, your realtime calls will be a bit dated. Just my .02.
i looked at DE today too and thinking about the 4th bar but the wide range and the lower tail on the 3rd bar stop my entry
also most important, i think it already hit the half way point in the zone, so...i was thinking its might pullback a bit to the resistance cuz its too far away from the resistance already...
not sure how correct is it but that is why i didn't take the trade and went for something else like CHS (but chicken out cuz didn't follow my plan)
Michael,
No, I'm totally on board with you, absolutely. I was thinking the whole time how annoying it might be to the readers to keep throwing out symbols that could change at any minute anyway, so I realized pretty quickly I wasn't really adding much value that way, lol.
Plus, it's just too tough to post real-time ideas on different time-frames and trade simultaneously. I actually missed a few entries that I had been watching that took off without me when I was posting my comments. I really frustrated myself by doing that.
And I also agree that it's all up in the air anyway as far as if it benefits anybody, since the time between my post and the actual approval upon review could be substantial. No offense taken at all. I don't want to be the guy that everyone rolls their eyes at for streaming my consciousness every two minutes. Thanks for helping me nip that in the bud. :D
MikeS,
That's a tough question. I personally struggle to short in the face of an uptrending market like today's, but there are obviously a few shorts out there that are working.
On the Daily chart, I see that DE is hitting old support from back in March, but I don't know how much that helps either.
If I think of anything else, I'll post it.
Hi Everyone,
I was watching NOA today (5/18) on the 5 minute chart. I liked the pullback to the RZ, but I couldn't pull the trigger after the 4th bar or the 5th bar for some reason. It just didn't feel right to me. Was anyone else watching this or trading this? And if so, would you have taken this trade and why? Thanks.
Chips and Salsa, thanks for sharing your watchlist preparation method; it's very interesting and also explains why I don't see the stocks that you consider for setups. I look for gappers (usually > 3% or so) in the premarket; by the time the market opens I have a good number on my list and don't bother looking for more. However, I've set up a scan using your method; let's see what it comes up with tomorrow!
I was actually thinking recently that perhaps there should be a real-time chat focused on Trader X strategies; then you started posting in pseudo-real-time. :-) I thought, ah, interesting! But I agree with Michael that it will muddy up the format here and that it's not real-time (though I did get to watch your NYX trade play out). I have missed a few good setups recently, and more eyes would be great, though those eyes probably wouldn't be watching all of my potential setups, of course.
t-money, I didn't see NOA, but if I had I would've taken it. Yes, the OR was fairly wide and the 5ema was far away (which was probably why it didn't feel right to you?), but I like the shallow pullback and the narrow 4th bar right at the whole number resistance. My eyes would've probably opened wide and I would've probably jumped on it!
I didn't see much today. A few (like HDY), touched the top of the RZ briefly and then bounced, but I didn't see them in real-time. I do have fibs drawn on CHS, so apparently I was considering it, but I missed the setup bar. I think I need 8 eyes or so! :-)
Anybody else getting kicked around today? Raise you hand. Mine is already raised. MON long and LPL short, 15m charts, kicked outta both on sharp reversals after entry. No me gusta! That's Spanish for "Today's action really sucks".
[raises hand]
Yes, Chips and Salsa, I'm getting kicked around...by myself!
5/19 PETM 11:10 5m bar, hammer-like. Yes, it had earlier almost hit its lows, but that was a quick dip. The 11:10 area also looked good on the 10m and 15m and was supported by the 20ema on the 5m, 10ema on the 10m, and 5ema on the 15m. I got in over the bar, but soon freaked out over a .05 dip because I had earlier losses and thought that this was the start of another one. I then had several chances to get back in but I couldn't pull the trigger. It broke the OR highs and is now resting nicely after hitting whole number resistance. This is one of my biggest problems, watching my P&L too closely and forgetting that I had gotten in on a strong setup. As I had said before, I have to BELIEVE!
BIG was on my list, but I missed the nice short under the 10:15 5m bar.
Chips and Salsa,
I found it rough out there today too. Just couldn't find a decent setup to trade. I ended up having one trade in CSX above the 3rd bar on the 5 minute chart. I had to bail on it though when it couldn't hold the ORH and formed that nasty candle on the 8th bar. Just no follow through today on anything that I was watching. Sucked.
Klaorman,
I used to do that exact same thing when watching the P&L of my trades and it drove me crazy. I was always getting out to soon, or failing to take a good setup if already down on the morning.
I ended up taking P&L off my screens completely. That way I put on a trade with a profit target and a stop based on a good setup and not worrying about past trades.
Also, I stopped watching candles of trades that I am in as they are forming. This would always cause me to sell to early if I saw a candle crash through the moving average, only to see it move back up and end up forming a hammer or something. Now I just monitor my trade after each candle has formed already on whatever timeframe I am using.
Maybe that will help you not to go crazy and freak out like I used do.
I posted a quick poll/survey regarding UPS usage (do you use one?) on my blog. If you get a second to answer, that'd be great.
Thanks,
-AT
yeah, two trades, two stops outs. FLO and ORLY, 15min charts.
t-money, i started covering my pnl as well. and i stopped watching the level II. only for entry. i have to remind myself i trade charts, not the level II.
klaorman and chips/salsa following up, what software you use for the scan. i use trade ideas hooked up to quotetracker. finviz is a great free source.
Funny, PETM was my only good trade of the day. Bought on break of 11th bar high on 10 minute chart. Had moving average support on whole number (45) support. Sold when it falteredat the ORH.
t-money, thanks for your suggestions. If I remove my P&L, I think I'd probably be even more anxious not knowing how I'm doing (of course I would have a general idea). The thing that I really have to do is accept my risk completely on every trade; if I don't (if it's too big for me), then I shouldn't even take the trade.
I've heard of the candle completion idea, but I worry that the current candle may crash through my MA and hit my stop; if I wait for the candle to complete, it may just keep going past my stop. How would you deal with this situation?
joshua, I use Madscan, a real-time scanner. I set up a scan for stocks approaching their previous day's highs/lows, but since it's real-time, it's continuous, so I got deluged with tons of hits today. I clicked on some of them, but I didn't really find any candidates.
arbaway, great trade. You bought the same area for the same reasons that I found; I also saw the 45 support but forgot to mention it. Excellent job holding to the OR highs.
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