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Thursday, August 04, 2011

Look out below!

The markets posted the biggest declines since June of last year. I feel bad for the people with 401Ks, but the market offered traders a lot of profitable opportunities.

I don't have time to post charts, but here are three setups that are in-line with the previous two I posted this week. All are 5-minute charts, with Fibonacci lines plotted over the morning's opening range and my standard EMAs:

WLT - break of the 7th bar's low, covered at the Fibonacci extension (FE)...it didn't reach the target until the afternoon, but it was worth the wait.
MCP - break of the 7th bar's low, covered at the FE.
VMW - break of the 8th bar's low, covered at the FE.

We'll see what tomorrow holds.



Klaorman said...

Excellent trades, Trader-X! I saw WLT too, but 9 stocks all set up at around the same time, and I couldn’t take them all. I probably could’ve if I had gotten in and then set stops and partials targets and then ignored them until EOD though... Awesome hold through the WLT retraces, Trader-X; I suppose it’s easy when you have belief and conviction from years of experience.

8/4/11 trades

Huge downtrend day today, but I couldn’t take advantage of it. I ended up breakeven, but felt like I traded very poorly. Since I missed so many setups today, I’ll want to try to hit every one I see tomorrow, but after such a trend today, tomorrow will likely be a consolidation day, so I should be careful. I shouldn't have too much bias, however.

I can’t believe I created even more charts today than yesterday!

AMLN 2nd 5m bar short
This was kind of a fill-the-tail setup; during the 3rd bar the lows at S2 were tested, so I took the trade, but I got stopped out. I saw that whole number 10 was nearby too, but with the market looking like it was going to fall, I took the risk. An offsetting bar formed on the 5m soon after entry, so I could’ve gotten out earlier over that, but I stuck it out for the full stop. AMLN never did fall and actually exhibited some strength later in the day.

ATML 2nd 5m bar short
As I was suffering in AMLN, I took this fill-the-tail setup too, which seemed stupid, but it looked good to me. This time the setup was right at whole number 11. I made a huge mistake however, by letting AMLN’s stop out influence this trade. I cut ATML short because I thought it would also stop out like AMLN did, since they were similar setups. I should’ve just kept the stop or moved it above S2 as resistance, since ATML didn’t breach that level before dropping like a rock to almost reach the 200 extension. Afterwards, it found resistance at the FE for 2 more possible trades, but I didn’t notice them in time.

SD 6th 5m bar short
This was a great-looking shooting star at the 5ema and S1. I held through the ORL and covered at the FE, one of the rare times that I held a whole position to the FE. Yay me! :-) I looked for an FE trade later in the day, but didn’t find one. However, I noticed too late a shooting star at the 8ema and S2 on the 30m for a 2nd great trade.

SMN 7th 5m bar
This hammer was at the 5ema and 38 fib, just beckoning to me. But with the market down so far, would this ETF keep going? I had to find out, so I took the trade. I partialed at the ORH and then sold the rest when the stock faltered after hitting R2. It dropped back under the ORH, but then rallied “to the FE and beyond.” Way beyond. I now see a narrow red hammer at the FE at 11:05, so that would’ve been a beyond the FE setup, but I didn’t see it at the time.

EXH 8th 15m bar short
This shooting star was at the 5ema, but not near the 38 fib. Soon after I got in, however, the stock spiked up about .20, and the market looked like it was going up. I fought with myself to stay in, trying to “be good” by ignoring the market and concentrating on the setup. However, the market won, and EXH marched straight up to my stop. Later the stock formed a shooting star at the 5ema and 38 fib and proceeded to drop within a whisker of the FE, but I didn’t see the setup in time.

Klaorman said...

8/4/11 Missed trades

CEDC 6th 5m bar short
Here’s the first of 7 setups that formed at around the same time as my SD and SMN trades above. This was a narrow red bar at the 8ema and 38 fib. The stock quickly dropped to the ORL and then later hit the FE.

WLT 6th 5m bar short
This was a green shooting star at the 38 fib and with its tail nearly touching the 5ema. It bounced over $3 at the ORL before settling down to hit the FE and beyond.

SPY 7th 5m bar short
This was a shooting star at the 5ema and 50 fib. The ETF hit the ORL nicely and almost hit the FE, but then it bounced big before finally hitting the FE. It later found resistance at the FE.

ERY 7th 5m bar
This was a doji hammer at the 5ema and 38 fib. The ETF hit the ORH, pulled back near the entry, and then took off like a jackrabbit.

PCX 7th 5m bar short
Yep, broken record time: Green shooting star, 8ema, 38 fib. Hit ORL, pulled back near entry, then onward to the FE. Found resistance at the FE and then dropped much farther.

MELI 7th 5m bar short
This was a spinning top at the 8ema and above the 50 fib. I didn’t like the spinning top much, but the stock still got near the ORL.

MDR 7th 5m bar short
This was a very narrow hanging man near the 5ema and 38 fib. The stock quickly dropped to the FE and then proceeded to base there with lower highs until it broke down (2nd arrow). I didn’t see this, but I did see the 2nd resistance at the FE (3rd arrow). I set my alert for a drop from there (yay, I remembered to do this), but when the alert hit I hesitated, even with the tiny stop, as I didn’t have experience with this setup. The stock dropped very well from there.

SCOR 5th 10m bar short
This was a shooting star at the 5ema and 38 fib, but with a relatively large body. The stock’s wide-ranging initial bar made me hesitate, thinking it would be volatile. It based for 3 1/2 hours before dropping quickly to hit the ORL.

RDC 14th 15m bar short
I saw this shooting star at the 8ema slightly late and could’ve chased it a bit, but I didn’t. The stock almost hit the FE by EOD.

PCLN 7th 30m bar short
I was checking out PCLN after hours for their earnings report and saw this nice shooting star at the 5ema and 38 fib, similar to SOHU’s setup on 8/1, complete with a long lower tail on the bottom bar. This setup bar was actually better, with a small red body. The stock would’ve given $20 at the bottom; you would’ve needed a $4.50 stop, though.

Grove Under said...

Although I didn't take these (8/4 - I didn't trade), here are some other setups inspired by what Trader-X wrote years ago about the "push through" setup.

WNR - sell below the 6th 5min bar

BZ - sell below the 3rd 5min bar
BZ - sell below the 7th 5min bar

CTB - sell below the 6th 5min bar

If you're interested, you can see more details of the setups and charts here.

Chips and Salsa said...


DRE, 15m, 5ema, Fibs OR, short below bar 5 (smallest bar of the day and below a whole number), exit 1/2 at 3R around FE, exit 1/2 at 5R before lunch chop, net 4R profit. May fall farther, but market is so extended, I am out.

The cascade in the market this week is unreal.

Grove Under said...

Chips and Salsa:
DRC was another with a similar setup, 15m, bar 5 or 6.

I thought that was the stock you initially mentioned, very close symbols. BTW, liked that video you posted the other day, funny!

* * * * *
Amazing volatility today (and this week). I'm hoping that when I return back to trading next week, some of it will still be there...

* * * * *
For those interested in an update on my experience with Tradervue (online trading journal), I've posted it here.


I'm finding that it has the potential to be very powerful, but requires a lot of effort to setup properly.

If you're a new trader and serious about trading (or even if you're experienced but without a journal), I highly recommend looking into this. Or at a minimum, start and maintain a good trading journal!