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Tuesday, August 30, 2011

How bad do you want it?

Next Monday is a market holiday, so posting will be scarce for me this week as I take some personal time ahead of the three day weekend. I encourage you guys to use this week to maybe not trade as much as usual, and instead study and work on focus and discipline. Just a thought.

Here is a motivating video - I don't agree with the "no sleep" philosophy, but the overall message is powerful and should get you charged up.

How Bad Do You Want It from Greyskale Multimedia on Vimeo.

I will check comments periodically for compelling trades to post on the blog. Have a good week!



Pete said...

Nice vid, thanks for the motivation!

Times of Your Life said...


Grove Under said...

I believe Trader-X is being very polite, but if Zorro was giving us the message, he would probably be saying:


I didn't get the memo in time, and was very lucky to get out of 2 trades today with a little lunch money. Lots of choppy action on my watchlist.

Since I still have lots of cleanup to do around the house after the storm, this is probably a good sign that I need to focus on other things this week.

* * * * *

Trader-X, nice video! This has a great message -- you really need the passion to succeed. A "rage to master" your field.

Just a few days ago, I ran into this trader's website that has motivational clips from movies, commercials, original clips, etc. As you would imagine, most are sports related.


After watching the Michael Jordan clip, I followed the link to the "Michael Jordan's Wisdom (Rare Interviews)" clip, he mentioned that what separates the good from the great athlete [replace with trader] is the mental game. Maybe Lebron needs some lessons from him.

Chips and Salsa said...


TCK, 30m, 5ema, Fibs OR, entry above bar 4, exit near the FE, net 2R.

Net losing day for me. Overlooked Fed Minutes on the economic calendar. I hate Fed Days. So choppy. I never trade them. Well, unless I forget. Like today. Lame.

Chips and Salsa said...

Great vid, wow.

bl said...

Passion and drive in that video.
$2-7 >10% WL(10): SVA PRMW FRO 5 min with green bars early on some of the others developed later.
C&S: I like the 2/30" doji/hammer.

PRD trader said...

Wow i must say ,some people work their ass off to be successful.

Klaorman said...

8/30/11 trades

HDB 6th 2m bar
This was a red hammer at the 5ema and 38 fib. There was a small shooting star at the top of the stock’s opening run, but I thought that was OK due to the 3 strong opening bars. It struggled for a while and then got caught in the Fed minutes, stopping me out. However, it recovered right away and hit the FE before falling. I suppose I could’ve gotten right back in it, but the action might’ve still been whippy due to the minutes.

NVAX 6th 15m bar
This was an inverted hammer at the 5ema and 50 fib. The stock struggled all day but finally sniffed whole number 2 near EOD, where I sold.

JCOM 9th 30m bar
This was a small red hammer at the 8ema and 38 fib. The stock popped right after I bought it; I sold right when it paused near the ORH because the run was fast. I planned to rebuy it over the ORH but it never made it back.

Missed trades

JVA 6th 2m bar
This was an inverted hammer at the 5ema and 38 fib. After it triggered it hit the FE in 2 bars.

AG 9th 5m bar
This was a hammer at the 5ema and slightly under the 38 fib. I had noticed the red hammer 3 bars back but then missed seeing this one. The stock almost hit the 200 extension on its first run, based between R2 and 24, and then almost hit the 300 extension on its second run.

JDSU 6th 10m bar
This was a big-bodied hammer at the 5ema and R1. I had passed on the red hammer 2 bars back and missed seeing this one. The stock hit the 162 extension and then the 238.

QNST 8th 30m bar
This was a NR bar at the 5ema. The stock almost hit the FE.

bl said...

Beautiful group fades: CMI CAT DE CLF on JOYG eps. Fwiw SPY DIA QQQ hit .62 fib retacement of recent sell off and reversed. $2-7 5min: ONP KERX ODP WINN CLWR IPSU HOLI DYN (3/8>10%)

Chips and Salsa said...


VMW, 5m, 5ema, Fibs OR, entry above bar 4, stopped out at breakeven after a major, single-candle reversal.


Klaorman said...

8/31/11 trades

Yep, chop city, even on nice setups.

VMW 4th 5m bar
This was Chips and Salsa’s trade, a hammer at the 5ema, 38 fib, and R2. The stock was moving nicely and I was eyeing the FE, when suddenly the floor dropped out. Then it did it again twice more! That’s evil! Bad stock!

MTW 9th 5m bar
This was a hammer at the 8ema and straddling the 38 fib. The stock tried valiantly, but it eventually stopped out.

ORCL 10th 10m bar
This was a hammer at the 8ema, with its tail bouncing off R2. Stopped out.

Missed trades

RHT 8th 15m bar
This was a hammer at the 5ema and 38 fib, right after another hammer. Since I had lost on my other trades, I passed on this one, even though it looked good. The stock popped a bit, but then it started dropping, which got me thinking that nothing was working today. However, it then recovered and almost made it to the ORH before ending at about breakeven.

AMCX 5th 30m bar
This was a small red hammer floating a bit above the 5ema and 38 fib. I didn’t see it at all until much later. The stock hit past the FE to R3 before dropping.

Grove Under said...

I missed this trade by a few minutes, but on 8/31 the AOL setup looked compelling.

AOL 5min, buy above 8th bar

The Fibs drawn over the first 25 minute opening range.

The retracement was shallow, but at least it was orderly and with minimal wicks. FE reached in < 10 minutes and with decent risk/reward.

Wrote about it here, in addition to a EURCHF swing trade I entered yesterday.

JustAGuy said...

Klaorman, kudos to you for posting your trades every day. Having said that, a lot of times I don't see why you took setups. Out of VMW, MTW, and ORCL, to me VMW was the only semi-valid setup. And my question there is, why don't you take partial profits? It was up over $1 from your entry at one point. It stalled out at the 1/2 point between the high and the Fib extension, a level X and Tom C. told us to always watch. In short, you should have made money on VMW.

MTW - just doesn't look like a setup to me. ORCL - big run in the first five bars, and your entry was on a very shallow pullback. This thing was destined to keep falling to the retracement area at the least.

Also, when you look at moving average support, you need to be more critical. If the moving average is running through the middle of a candle's real body, that is iffy at best.

Klaorman said...


Thanks for your feedback; I really appreciate it. I post my trades because I’m trying to learn the Trader-X way; if (when) someone slaps me on the face and says, “What the hell are you doing??” as you’ve no doubt seen recently, then that’s terrific because then I’ll know that I’m doing something wrong.

You said that a lot of times you don’t see why I took setups. I’m surprised since I’m mostly only looking for the pullback special and I want to think that I have an idea what one looks like. Please let me know in the future when you think I take an invalid setup. (Just please don’t say I do that on every trade! Well, if it’s true, then go ahead.) And/or point out some of my previous invalid setups.

How was VMW only semi-valid? It ran up for 2 bars, pulled back for 1 bar, and then formed a hammer at the 5ema, 38 fib, and R2. It looked very good to me. The reasons I didn’t take partials:

1) The stock was in my IRA, where I’m more relaxed with my trades.
2) I didn’t have too many shares of it because my stop was around .80. (I got in a little high because the stock was spready; also, my IRA interface is slow.)
3) I had an “FE or bust” mentality on it (set and forget). I don’t trade many higher-priced stocks with larger spreads setups, but because I had passed up a few in other days that had hit their FEs and this setup was compelling to me, I took VMW and aimed for the FE.
4) Since I was more relaxed and I was looking for the FE, I didn’t monitor the trade too closely. Sure, I’d check in once in a while, but I wasn’t on pins and needles, as I usually am (an exaggeration, but you get my meaning). Soon after I got in, I did half-notice a .80 drop, but I wasn’t concerned.

The thing about resistance areas is that you don’t know (well, I don’t) that they’re truly resistance until afterwards, in hindsight. The drop from the halfway point between the ORH and FE was very quick. Should I have bailed immediately after seeing price drop from there? What if it was a fakeout? The FE was almost within reach. The other day (8/19) I thought I had seen daily resistance overhead on SLW, so I passed on it. I would’ve taken it if the “resistance” wasn’t there. It thumbed its nose at me and hit the FE almost exactly (it went over and then fell back) for almost a buck. And yes, it paused at the “resistance” halfway between the ORH and the FE, but then it kept going.

There were also 7 bars of resistance at the ORH. I could’ve partialed there since that’s my usual plan, but I had so few shares that it didn’t seem worth it. If I had more shares, then yes, I would’ve partialed at the ORH, but probably not at the halfway point.

When I monitor my positions (and my P&L) too closely (and get tickitis), I usually freak out and make the wrong moves. Oh look, there’s a shooting star; do I sell? Sometimes I have, and sometimes the stocks went on to hit the ORH or FE. Sometimes, after keeping my original stops for a while, I’ve moved them to “logical” places and minutes later they get hit; later the stocks reach my targets and I roll my eyes, having done the wrong thing again! If I panic at every little shake, then how do I ever reach my targets?


Klaorman said...

How does MTW not look like a setup to you? Its red 2nd bar was offset by its double-wide 3rd bar, its pullback looked orderly, and its hammer was at the 8ema. The hammer’s body straddled the 38 fib, but that was OK by me since I would consider trades at the 50 fib also (with good support from the 5ema or 8ema).

ORCL had a shallow pullback, yes, but it was at the 8ema and R2. Back on 8/1, I had passed on 3 trades that had worked, due to them all not having pulled back “enough” (MAN, AGP, and HCA). Then Jay commented that MAN almost looked perfect to him, so afterwards I allowed myself to consider shallow pullback candidates, especially ones with additional support (like R2).

About MA support: I had asked Trader-X earlier which MA he used (the 5 or the 8) because it had seemed that he switched between them willy-nilly. And willy-nilly was actually his answer; if a setup bar didn’t look good on the 5 but did look good on the 8, then that was fine by him. So I do the same thing; yes, the 5ema cut through the real bodies of MTW and ORCL, but the 8ema supported them nicely.

Thanks again for your feedback; it made me consider my actions more carefully.

Klaorman said...

9/1/11 trades

EGO 7th 10m bar
This was a hammer at the 8ema, with its body right over the 38 fib. R3 was right at the FE; I thought that would’ve been the magnet to draw the price towards the FE. The stock faltered at the ORH, but I held. My target was .03 under the FE. When price hit .05 under my target and then started falling a bit, I sold, thinking “Good enough!” It turned out that that was the high.

PIR 7th 10m bar
This was a red hammer at the 5ema and 38 fib. R2 was right under the ORH. I sold there when the stock tried but failed to push too far over the ORH. R2 was strong with this one.

Missed trades

CCL 3rd 2m bar short
This was a green doji shooting star not quite near the 5ema and hovering above S1; both of these factors made me pass on it, even though the pattern looked nice. Also, I had originally drawn fibs over the small opening range and found that the FE didn’t give much profit. Redrawing fibs over the PDH/ORL, however, gave an FE right near S2, where it bounced sharply after the ISM numbers came out at 10am.

LEA 4th 15m bar short
This was a hanging man at the 5ema and straddling the 38 fib. I had seen the long green shooting star one bar earlier (caused by the ISM numbers), but then I missed this setup bar. The stock bounced at S2, a bit under the ORL, and then later hit the FE.

bl said...

Th 1Sep: $2-9 15min ANW GERN GLUU SHFL GERN inside bars,hammers,marubozu
(body w/o tails). 10:15 mkt reversal...typical and dangerous even if the long set up looks good. COST 2/15 IB

Chips and Salsa said...


I'd like to personally thank you for demonstrating the value of pivot points in your feedback. They're a tremendous resource I never really gave much credence to. I've been keeping them on my charts, and they're quite helpful. Thanks very much.


NVLS, 5m, 5ema, Fibs OR, entry below bar 2, exit at R2, just over 2R profit.

Chips and Salsa said...

Correction: exit at S2, not R2.

Anonymous said...


9/2/11 - 5 min chart / GS / Fib Drawn 1-3 bars

What I see? After opening, side-way actions 4-8 bars occured under 50% RZ. 9th wire spread bar took out all 4-8 bar low and closed below 38% RZ. This was a great entry but I decided to wait because below is Pivot which also correspondence with $107 whole number.

Entry: 10th bar hanging man close below 38% RZ with 5ma pressing down.

I was stopped out later. GS traded as far the around $106 Morning Low (which you always reminded it can be resistance) and reversed. In retrospect, the 9th bar is an aggressive entry that worked, but base on above reason, 10th bar was a conservative entry I took. I have no regret as technical work when it does, and don't when it doesn't.

Where would you have enter and is there any more I did not see on chart? please give me some advise to improve. Thanks so much!


Jay said...


As you have mentioned my earlier comment, let me add my thoughts to the ORCL trade comments. The two trades are actually not as similar as one might think at first glance. For the MAN trade (short) I noted that the trigger bar was an inside bar, the narrowest of the day, and the two previous bars showed weakness. But for the ORCL trade (long) the trigger was not an inside bar, not the narrowest, and the previous bar showed weakness (upper wick) instead of strength. Also the MAs are in the bar as others have noted.

But please note that this is my analysis in the comfort of not actively trading. I must confess that I probably would have also taken the ORCL trade in the heat of an active day. So let me thank you for posting these charts as the act of doing the analysis helps me improve my trading.

Klaorman said...


Oh, I wasn’t saying that MAN and ORCL were similar setups, just the fact that your comments made me consider setups that hadn’t pulled back to the 38 fib. However, your analysis of ORCL is interesting; you said the bar previous to the trigger showed weakness. Back on 8/12/11, I had wondered why my ST long trade had failed and speculated that 2 previous bars were weak, but you replied that those bars were part of the pullback so they shouldn’t have been a concern. So which is it? ;-) I’m not trying to trap you; I just remembered someone saying the above about ST, and when I found that comment it turned out to be you!

Also, you noted that the MAs are in the bar, but the 8ema is not in the bar’s real body. Do you strictly use the 5ema then, instead of 5ema OR 8ema as Trader-X does?

Grove Under said...

"Would you have taken this trade?"

TRI 5min, sell below 9th bar. Fibs over the opening 5 bars. I scratched this trade after the large green 15th bar (10:40).

I thought this setup was decent enough, but it didn't work. The retracement was a bit shallow, and the 5th bar with the lower wick was slightly bullish. However, I thought it would at least test the lows of the day, and it didn't even get there.

Any other warning flags on this one? Thanks.

Klaorman said...


The market’s big gap down and attempted gap fill invalidated almost every stock for me; I only saw a setup that I had missed, a red hammer on the 2m for XRA. It was at the 5ema and R2 and near the 38 fib. The stock hit the ORH and exploded on volume there; I should’ve set an alert there. It hit the 200 extension in about 15 minutes.

Jay said...


You bring up a very good question about weakness in the pullback bars and my inconsistent thinking/advice. I would like to be able to say my thinking has evolved or give a definitive theory, but the simple and honest answer is that I do not know.

I took a short trade in WMT today. 5 min bars, fibs over the first 30 minutes. Trigger bar was a break below the 10th bar inverted hammer. I will say that the fact that all the bars but one before it had upper wicks helped me feel more confident that WMT would go down again. I covered at 51.02 after giving the price a few chances to fall like a rock under 51.00.

As for MAs, I only use the 8 MA. I do not have a good reason for using the 8 over the 5. I just picked one and use it.

bl said...

Gap down/fade/reversal/contra. It sometimes works if you have a WL of Group beta leaders that reverse on gap ups/dn: MOS AAPL AMZN GOOG NFLX FFIV LVS CF BIDU GMCR LULU OPEN PCLN(20 PT MOVE)etc.
$2-10: XRA HOLI SWS(put your fib tool[100%-.78] on the first 10 or 15 min bar 100% and extend upward=preprogrammed where it was going to go. I want to hear about some reversal esp on days like this, does it work for you?