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Monday, July 25, 2011

Something a little different

I tend to find one of these explosive movers every week, and while this was not what I would consider a "textbook" setup it was still a nice, low risk/high reward opportunity.

ATRN gapped up and printed a wide range first bar, but it did leave a long upper tail (bearish). Price pulled back over the next three bars but reversed and rallied sharply back through the retracement zone (RZ) and to the Fibonacci extension (FE). Price then pulled back to solid support from the opening range high (ORH) and a rising 8EMA. I entered on a break of the 15th bar's high (which closed back above the FE). I exited half my position at $6, and the other half on the pullback to $5.50.

There were some red flags, namely the long upper tail on the first bar and the ninth bar. But overall price was acting bullish and when it closed a second time above the FE (search this blog for "beyond the Fibonacci extension" setup), I had a feeling it was setting up for a nice move.



Klaorman said...

Very nice trade, Trader-X! I think I saw this off the open but then removed it from my list after it had pulled back hard. I noticed it again after it was touted on Twitter at $4.50, but by that time, it was "too late" and "too extended." How did you determine that you wanted to hold until $6? Why not $5? There were at least a couple of steep drops along the way to $6. Did you just follow along with the 8ema and then decided that $6 was a good whole number to take a partial? It looks like holding it to $6 would've also worked out using the move-stop-under-higher-lows approach, which I'm trying to follow.

Grove Under said...

Great trade! I totally missed this one and saw it way after the fact.

I've been tracking these "beyond the FE / pull back to the ORH" type trades that initially hit the FE target (or beyond), but then pull back to the ORH (or FE) with a nice setup.

I only have several weeks of data, so my sample size is small. But I've found that many of these setups seem to fail if you take it on the 12th bar, which was the attractive looking green hammer-like bar.

Have you found this to be true? And is this why you waited until the 15th bar for confirmation?

As always, thanks for your great insights.

Randall said...


Do you still use any setups that pull back into the EMAs? i.e. reversion to the mean setups or gap ups that go short?

It seems like there are a lot of those around and good trades are still possible with them.

Trader-X said...

Touted on Twitter?

I don't have a scientific reason why I held for and sold half at $6, except that the setup seemed to be one (based on experience/feel) that had the explosive potential. I had already done everything I was going to do for the day, so I was willing to let this go back to my entry and be stopped out b-e. At the same time, I was watching for a break below the 8EMA to signal that the run ended.

Grove, interesting about the 12th bar. I look for two things - either a break of the FE and a perfect pullback to test that level as support (which this didn't have), OR a break of the FE, pullback, nice reversal, and a setup as it breaks and closes above the FE for the second time.

Trader-X said...

Randall, I do. But generally speaking they are lower probability than my other setups. There is nothing wrong with that as long as you accept the extra risk and plan accordingly. But, if you are looking for just ONE setup to trade, I don't think those would be it.

Grove Under said...

Thanks for the feedback on what you look for with those beyond the FE setups, it's very useful.

I'm tracking different variations of setups to see how well they're doing, so your explanation really helps out.

* * * * *
Online Trading Journal

One of the challenges with tracking setups is to try and keep things as simple as possible, both for the actual journal upkeep, as well as categorizing the setups for future analysis.

I looked for a good trading journal software package, but couldn't find anything, so I've stuck with Excel.

That is, until today. There's a new online trading journal that went live today at Tradervue.com, and it seems to have nearly everything I'm looking for.

I really like the ability to add tags to trades, so that you can filter your analysis based on what type of trade, rating of the setup, etc. Uploading of data is pretty simple (a TradeStation importer is currently being built, LightSpeed, IB and others already supported).

Best of all, this online trading journal is free. Not sure if there's some other fees planned in the future, etc., but for now, it's looking pretty compelling for what I'm interested in and how I want to operate.

Here's an example of a trade I took today via Tradervue:


One the cons I've found is that it's a bit difficult to see the entry and exits on their charts, but at least they are created automatically. It would also be nice for them to allow embedded/linked images on your journals entries, so that you can review your own screen prints of charts.

We'll see if this eventually makes me switch over from Excel, but so far, looking good...

Grove Under said...

CORRECTION: I accidentally deleted the link to Tradervue in my comment above, so here's the new link:


On a positive note -- The developer of the site created an import for TradeStation last night (quick turnaround!), and he also pointed out that it already supports displaying your own linked charts into the journal notes. Nice.

Chips and Salsa said...


MRVL, 5m, 5ema, Fibs OR, entry above bar 8, exit near FE with net 3R profit.


ENR, 15m, 5ema, Fibs OR, entry above bar 6, exited when I hit 3R profit. The stock reached 10R from my entry. Oops. For once, I didn't let half run. Shoulda, woulda, coulda.

Ray said...

Thu - for those of you who trade later in the day, JNY made a nice setup off a hammer (5-minute timeframe) when price broke the morning high. I entered on a break of the 1:35EST bar and sold at the fibonacci extension for a .30 gain. Doesn't look like much, but almost 2.5% and I'll take it. Fibs over the morning low to high, 8EMA provided support.

Klaorman said...


I follow several breakout traders on Twitter, and some of them mentioned or "touted" ATRN as it was crossing $4.50. I sometimes call it touting when more than one of them mention the same stock, usually at the same time.

Chips and Salsa,

I saw ENR way after the fact, but noticed the same 6th 15m bar setup and also the 8th or 9th 10m bar setup. I had ENR on my list in the morning, but I'm not sure why I took it off. I don't usually see these types of setups, but I did recognize this one and thought that someone here must've seen it!

Klaorman said...

7/25/11 trades

HNSN 4th 5m bar
This doji hammer was at the 38 fib, but above the 5ema. It quickly popped almost to the FE and R3, where I sold. It was only a .12 profit, but the setup worked, and money is money!

MMSI 8th 5m bar short
This bar was deep in the RZ and past the 8ema, but it almost engulfed the last 2 bars, so I thought it was kind of reasonable. However, the stock started popping up the instant I got in. I usually put my stop .05 to .07 above the setup bar, so even though the top of the bar was breached at first (and missed my stop by a penny), I was still in. I also moved the stop back .03. The stock tried again at breakeven, but then it popped again; this time it hit my adjusted stop exactly and then proceeded to drop almost straight down past the ORL. This was very frustrating since I was at first saved by a whisker, but then later I was shaved by that same whisker, which proceeded to laugh at me as the trade worked without me.

RBA 13th 10m bar
This bar offset the previous bar and straddled the 38 fib, R2, and the 5ema and 8ema, though both emas were starting to slope down. I took the trade anyway, partialed around the ORH, and sold the rest right near the FE and HOD (since I usually try to sell a bit ahead of resistance). Good thing too, since the stock immediately collapsed, right back to my entry.

ARBA 8th 15m bar
This bar was a hammer-like, but it was kind of iffy, since the pullback was a bit steep but still not near the 38fib and the previous bar was shooting star-like. I took the trade anyway and then watched the stock struggle for 4 hours before finally giving up near EOD. I have to stop taking the iffy setups.

ATRN 20th 10m bar
And speaking of iffy setups...
After missing this stock’s huge run, I thought that its first large pullback looked OK, with the setup bar being above the 38 fib but straddling the 8ema. I shouldn’t have taken the trade, though, because the run was just too much, exhausting any power the stock might have had for a push back to highs.

Missed trades

AGCO 7th 15m bar
This red hammer was at the 8ema and 38 fib, but I didn’t see it in time. The stock rose quickly to within .09 of its ORH; I don’t know if I would’ve partialed there. It then came back under the entry, but it didn’t stop out.

KOG 8th 15m bar
I saw this offsetting bar at the 8ema and under R2, but I thought the potential to the ORH was too small, so I didn’t take it. The stock just kept going and going until it almost hit the FE. As with my HNSN winner above, money is money, so I should’ve taken it.

EXEL 8th 15m bar short
I didn’t see this shooting star at the 8ema and straddling the 38 fib in time. The stock made it to the FE.

IMAX 11th 15m bar short
I saw this shooting star at the 8ema and 38 fib very late. The stock almost made it to the FE.