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Thursday, June 02, 2011

Reader comment - AAPL

Here is a setup for those of you trading the 15-minute timeframe, and for those of you looking for trades later in the day.

Doug R. posted:

"I traded AAPL on Tue with my Fib lines drawn from the opening range high to the previous day's swing low put in around 3:00EST. This was a 15-minute timeframe. I entered on a break of the 1:45EST bar. Why? Price broke through the opening range high and had solid support from the 5EMA. I rode it to the Fib extension."



Klaorman said...

Very nice. I actually saw the 5th bar as a possible entry, but I didn't like the choppy bars that came before it.

Chips and Salsa said...

Doug R,

Nice work, man. I took something similar in DV on 6/2/11, but I think Klaorman actually already spoke about the DV trade. It worked from both the previous day's swing low and low of the day to the ORH.

I normally don't like to take these extreme pullback trades, as the consistency seems to waffle. I also don't like candles that are greater than 1% of the stock's price. But this one lined up so squarely with both the 5ema and 38.2% Fib line, I chose to take it, adjusting my share size, as always. Got 2R out of it. Nothing super-exciting, but it's money I'm happy to take. :]

QQQBall said...

He you are back! I just happened to check!

QQQBall said...

You;re back! That;s awesome. I just checked in for teh first time in forever.

Grove Under said...

Sorry for the late reply, been off the grid for the past week.

But regarding your comment on number of trades, I'd have to imagine that the ideal number of trades will vary for each person.

For me, on a relative basis, the number of trades I had the other week (24) went down significantly compared to the week prior, so I was encouraged to see the positive direction in both profit and accuracy.

I'm with you in trying to target 10-15 trades a week (2-3 per day). However, I'm also looking for contra style trades that have been very accurate for me. Therefore, the number of classic Trader-X style setups I take should be even more selective in order to maintain the 2-3 trades per day.

Klaorman said...

6/3 trades

I had my best day today since I started concentrating on Trader-X setups about a month ago. I had discovered this blog about 3 years ago, but I had never put its ideas into practice until now. Thanks Trader-X for your generosity in sharing your setups. Thanks to your BRCM post for the wake-up call to consider all bars leading to the setup; I’ve been rooting through all your posts and see that you’ve mentioned this idea several times. And thanks to the commenters for the great discussions.

TSLA 2nd 10m bar
This stock gapped up and started falling, so I drew fibs from yesterday’s low to the OR high. The setup bar was a nice hammer-like right above R2; its tail tagged the 38 fib and didn’t break the OR low. Normally I’d partial at the OR high but it looked good going through it so I held. It stalled before the FE so I partialed some there. It then broke through the 162 extension, so I partialed some more. I used a close below the 5ema 5m to exit the rest. That exit setup bar actually closed right at the low, and the next bar kept going down. As I was scrambling to exit, the new bar bottomed, so I decided to put my stop under that. It tried to bounce, but later it hit my stop.

t-money, do you hold your entire position to your 5ema 5m exit or do you partial along the way? I calculated what my profits would’ve been based on holding all shares to the exit and found that I would’ve made 25% more that way on TSLA compared to my partialing method (taking extra commissions into account). That would’ve been nice, but I felt more comfortable taking partials at resistance and after spikes. I’ll stick with my method for now and will keep comparing the profits until I can convince myself to hold all of my shares to the exit. I’ve already done well by sticking with the 5ema 5m until the exit today (instead of jumping out nervously), so that’s a good start. Of course, there were no “wild” swings like there were in VRA and ARUN, so when those occur, they will be a better test of my resolve and holding power.

AMT 3rd 15m bar
This stock gapped down but then showed strength off the open. It pulled back nicely to the 38 fib and then printed a near-doji hammer (somehow Lightspeed’s data was faulty so the hammer doesn’t show on the chart). It promptly hit the OR high. I was looking for more, so I didn’t partial there. It didn’t get much further and stopped out near breakeven using the 5ema 5m. I see now that the OR high was also right at the 5ema 15m.

OXGN 11th 10m bar
This stock wasn’t a gapper, but it spiked up after 10am (that breakout from a narrow base would’ve been nice if I had seen it). The setup bar was a doji hammer above the 38 fib and R2, and was supported by the rising 5ema. The previous bar, which was wide and red and offset the bar before that (engulfed it, actually), was a bit worrisome, but the setup bar was narrow and low-risk, so I decided to try it. I partialed exactly at the OR high without hesitation because this cheapie was already up big and might find significant resistance here. It did drop a bit, but then it spiked up on high volume close to the FE. When it couldn’t make it there on the spike, I partialed some more. I then exited the rest using the 5ema 5m. Because I partialed on the spike, if I had held all of my shares until the exit, I would’ve only made about 5% more; that’s still extra profits, though.

Man, my posts are getting too long! Continued in the next post...

Klaorman said...

This stock woke up today with big volume. Even with .10 to .20 spreads (and I saw .70 once), I was prepared to enter, but I didn’t see a pullback. Looking at the 15m now, the 2nd bar filled in the 1st bar’s upper tail, so that would’ve been a good setup. The long base at 70 was also nice.

NYT 8th 15m bar
I didn’t see this non-gapper setup until the trade was over. After a strong opening move, the 4th bar hammer bounced off R1 and the 38 fib. The next 4 bars based tightly until the 8th bar almost hit the 8ema and price took off to touch slightly over the FE in 4 bars.

FRX 2nd 15m bar
I didn’t see this non-gapper either, but after a WR 1st bar, the 2nd bar pulled back nicely to form a hammer-like, though it was red. The stock ended up a bit past the 162 extension.

Anonymous said...

Klaorman, not sure what happened but it should be visible now.


Klaorman said...

6/6 trades

I didn’t see too much today, but I still got off 2 small winners.

AMED 9th 15m bar short
This stock gapped down and kept going down, creating a 1 1/2 hour OR. The setup bar was a shooting star at the falling 5ema. It went fast, so I chased it a bit. I covered at the OR low, even though the bounce at the setup bar was weak and the market was down; I’m not sure why, I just felt like covering there. It went for another .50 later, but it didn’t make it to the FE.

DCTH 24th 10m bar
This stock wasn’t a gapper and also dropped from the open, but then it kept rising until a blowout high-volume spike stopped it. The setup bar was a hammer at R1 and the 5ema, with the tail touching the 38 fib. I targeted R2 and the highs, but sold when it got near R2 and then failed.

Missed setups

SBUX 6th 10m bar
This gapper had a nice WR opening and an orderly pullback to the 38 fib. The setup bar was a doji hammer on the 38 fib and above the 5ema; it also followed a NR bar. I saw this setup during the next bar, after it had triggered and after it was looking to form a shooting star. Price technically broke the low of the setup bar, but if I had taken this trade I would’ve used .05 under the low, which wasn’t hit. Price made it to the OR high before faltering and eventually falling.

OSG 4th 15m bar
I was watching this gapper at the 6th 5m bar setup, but it didn’t trigger. However, when it dipped and came back, it formed an offsetting bar setup. It triggered too fast though, popping .09 before I could pull it up after my alert hit, so I passed on it. It hit the OR high before falling.

bl said...

Monday premkt >5% >$8: see stkl enoc uthr scco bvn bap exel. Not a bad WL

bl said...

Tuesday premkt WL >+/-5% >$7:EXEL MOD SWKS MIND BZ STKL BAH CTXS GIII PBY exception TLB, news IP CPO TIF. Curious, does anyone use a premkt WL for their trades and not at the Open?? Preference?

Chips and Salsa said...

Summer Movie Recommendation:

If you have not seen the film "Limitless", I encourage you to do so. Fantastic story, and a little bit of day-trading to boot.


Took IBN today on the 5m, 5ema, OR Fibs, break of 4th bar's high, 2.5R profit.

Chips and Salsa said...


I don't use a pre-market WL, but I don't think it's a bad idea.

My scan runs from the open and automatically updates itself as candidates are added or removed based on the criteria. 30 minutes to an hour in, I will manually save the list to make it permanent for the remainder of the session, no longer permitting new, automated additions or omissions.

I don't think a pre-market WL is hurtful, especially if you are trading very fast time-frames and need to jump on them as soon as they set up. But I find that running the scan after the open is just as effective for what I'm trading (5m to 30m charts). For me personally, it would be redundant.

If the set-up is there, it will show up on my scan. But again, I don't trade 2m charts or even scramble to catch every 5m set-up.

I've recently become very content to find set-ups on 10m, 15m and 30m charts and still catch 2R to 3R, and on occasion, much more. I'm in no hurry to rush my trading or demand large R multiples, and this lack of urgency has relaxed my mind and body and made me a better trader. :)

joshua said...


Is "limitless" a movie that we can wait on for dvd. it is only playing at one theater way across town. did you catch it in the afternoon $1 movie theater? we have one of those around here in PHX. it's me and a bunch of school kids, old ladies, and some special needs kids enjoying the cheap movies, lol.

Klaorman said...

6/7 trades

Today was a miss the good stuff and buy the so-so stuff day; I’m still not used to looking for fill-the-tail type trades.

PKG 7th 5m bar
This stock pulled back a bit farther than I would’ve liked, past the 50 fib, but the setup bar was hammer-like and closed above the 38 fib, its tail tagging the rising 5ema. It didn’t go far; I got out under the 5ema.

TYC 5th 5m bar
The setup bar on TYC was a hammer-like, but it was under the 38 fib, though over the rising 5ema. The next bar broke the low of the setup bar by a bit, but the trade hadn’t triggered yet. After I got in, a shooting star formed after 48.00 was breached, so I sold at 48.00 for a few pennies; the stock never got back to this level.

WY 11th 15m bar
There was a nice setup on the 2nd bar, but I didn’t see it. After it touched its high, the setup bar was a hammer-like above the 38 fib and the 5ema. It valiantly tried for the high, but it failed to get there; I got out under the 5ema for a few pennies again.

Missed setups

SUN 2nd 5m bar
I saw this fill-the-tail-like setup, but I failed to set a price alert and was busy watching for PKG and BZ to trigger and missed this trigger. It almost reached the FE but then fell back to bounce at the OR high before hitting the 162 extension. If I had gotten in, this would’ve been a good test of my abilities to hold for the 5ema cross since price was way above it most of the time; I would’ve likely partialed at the FE and the 162, but it wouldn’t have been fun watching the drop back to the OR high.

SWKS 2nd 10m bar
I completely missed this setup, which looked even better on the 5m. It hit the 162 extension.

Chips and Salsa said...


Crap, sorry, buddy, you're absolutely right, it's outta most theaters now. I wanted to mention it earlier when it was still around, but I kept forgetting to post about it.

It will hopefully be available on DVD and On-Demand / Pay-Per-View shortly. It's not over-the-top offensive, but it's not a family-friendly movie, just a heads-up on that, since you mentioned school kids and old ladies. :]

I'd like to hear what you think if you see it. It was kind of a sleeper that didn't get a lot of press, but it's a gem of a film.

Stark said...

Hi Klaorman,
I have been looking at PKG, SUN, SWKS as well.
i have a question about the way you apply fibs retrecments. this is a subject i have not quite figure out.
when do you decide to apply it from Previous day close to ORH (xstyle), and when do you choose to apply it only on ORH? if you choose the first do you have different rules to the retrecment price move (dont let it fall from the 38 fib rather than 50 fib)?

in addition, you were reffering to the 5 EMA and price falls threw this line - is this your signal to get out of the stock? does trader X refer to it as well? i must have missed it.

bl said...

Chips and Salsa,
Thanks for you your input and agree anything that show ups on a >+/- 5%Premkt scan will show up on an Open scan. The Premkt WL is smaller and well known by the opening bell and I have them charted already and not have to "chase" a WL. That's just me.
Wed Premkt: CIEN ANF QNST MCP ULTA FNSR BKD WPRT VRUS JDSU. COG showed up on cnn most % Premkt. I trade mostly inside bars and hammers, ema's and don't concern myself with fib# or volume. More of a visual thing.
Shorted CIEN 3/5" off setting bar for a small scalp with good opp's in the 10 15 30 time frames.

Klaorman said...

6/8 trades

I didn’t see much of anything today, which seemed unusual. Or maybe it was just me. Anyone find some good trades?

NCS 5th 5m bar
The setup bar was hammer-like and over the rising 5ema, but it was under the 50 fib. I tried it anyway. It technically stopped out, but since I was using .05 under the low of the setup bar as my stop, I wasn’t hit. It tried for the OR high, but it couldn’t make it; the 5ema stopped me out for a few pennies of profit.

Missed setup

BOBE 7th 10m bar
The setup bar was a hammer supported by the rising 5ema. It hit the ORH exactly but then got rejected.


When a stock gaps up and starts dropping and makes a WR initial bar, then I draw fibs from the previous day’s low to the ORH in an effort to catch it bouncing from the RZ. On 6/3 TSLA formed a 10m hammer on R2 and near the top of the RZ; that was a great trade. I will also draw fibs this way for fill-the-tail setups where I target the FE.

When a stock gaps up and keeps going up and makes a WR initial bar, then I draw fibs over the OR. I don’t require that a setup bar be above the 38 fib, since I did take NCS above when the setup bar was under the 50 fib.

I don’t think Trader-X uses the 5ema as an exit signal; I just try to use it in all of my trades. But at times when price gets far away from the 5ema, I get nervous and want to take profits. Then price might keep going and I regret it. At other times price may hug the 5ema closely and then try to shake me by dipping under and recovering. If I’m using .05 or .10 under the 5ema as my stop, then I might get shaken out; in fact, this does happen more often than not. t-money’s suggestion that I wait for a bar to close under the 5ema and then set my stop under that bar is good, though I still worry that price may plunge through the 5ema during the current bar.