A few charts from comments

As mentioned last week, I won't be back to a normal posting schedule until the beginning of April, but I will try to make a few posts between now and then.

I pulled some charts of trades that were posted in comments, and marked the entries and exits (entries are a break of the trigger bar denoted with the arrow, exits are the black, dashed horizontal line). The Fibonacci lines are all plotted over the morning's opening range. Please click on the comments of the last few posts to read the analysis and other good discussions on setups.

Todd - regarding chart #1, the risk was a little higher as your entry was still in the retracement zone, even thought it broke the 50% retracement. As long as you were aware of that and willing to take the risk, it was a great trade!





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A few charts from comments

I won't be back to a normal posting schedule until the beginning of April, but I will try to make a few posts between now and then.

I pulled some charts of trades that were posted in comments, and marked the entries and exits (entries are a break of the trigger bar denoted with the arrow, exits are the black, dashed horizontal line). The Fibonacci lines are all plotted over the morning's opening range. Please click on the comments of the last few posts to read the analysis and other good discussions on setups.







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Away for a few days

I an involved in a non-profit, and it is requiring a lot of my time outside of trading hours this week. Posting may be somewhat sparse, but feel free to discuss trades in comments.

And for all you Blogger users, here is a cool video about new and coming changes.



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TSL - 031411

It looks like today is going to be interesting - as of this post, NASDAQ futures are down 60+, and S&P futures are down 34+.

On that note, Google has set up a crisis response page for the Japanese Earthquake and Tsunami. Please consider making a donation.

Several people posted variations of this setup in comments yesterday (TSL, 2-minute chart). If you plot your Fibonacci lines over the morning's low/high, it presented a nice orderly pullback and a setup on a break of a narrow-range, inside bar that occurred on top of the retracement zone (RZ). Here are Flowtastical's comments:

"Just want to share a simple Trader-X setup on the 2-minute chart today (03/14).

TSL gapped up.

TSL rallied at the open and pulled back to $26.

TSL made an inside bar on the 2-minute chart at 9:38.

The following bar rallied above $26.20, the high of the inside bar.

I got long.

I sold into the upmove."

Nice, simple analysis and trade. It looks like it yielded just under 3%.



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What really matters?

This blog received a mention on "The T.A.D. Principle" blog this morning. Click the link to read a thought-provoking post on putting your life into perspective.

What really matters?

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MW - 031011

I buy my suits there, and the stock presented a nice setup today. I won't go into a lot of detail, as it is the same setup we have been discussing for the past week. My trigger bar and exit are marked (black arrow, black dashed line), and you can do the analysis on your own. Total profit was a little less than 3% in 15 minutes.



Note - I'm still playing with the colors to see what looks best on the web. Is white for both the Fibonacci lines and EMAs too hard to read/too confusing? Suggestions?

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Watchlists

There are a lot of questions in comments about how I come up with my daily watchlist. My trading platform is RealTick (since the late 90s!), and I use their standard "gap lists" to build my daily watchlist. I don't carry candidates over day-to-day...every day starts a new watchlist based on the daily "gap lists" from RealTick.

In comments, Ken talks about how he builds his watchlist. I do almost the exact same thing, so I will re-publish his comment:

"I use RealTick like X, or at least he used to. X, do you still use RT?

Anyway, I get my watchlist from the gap lists they provide. I dump them into Excel, delete stocks prices above $100, and often delete stocks below $20 though I sometimes leave them. Then I cut and paste back into the RT program and it actively sorts by today's volume. Sounds like a lot of work, but I can literally do the entire process in less than 60 seconds. Since the earliest I take my first trade would be 10 minutes after the open, I have plenty of time to spare.

Hope this helps some of you if you have the ability to cut and paste into Excel, and then back to your trading program."

If you click WELCOME AND LINKS TO KEY POSTS at the top of the page, you will find other posts that cover watchlists, how to find gap candidates, and numerous other subjects. Here is a good post to read. And there are so many more dating back half a decade!

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A few trades from Tuesday

From Brian:

"I've been trying the two minute charts (I've been trading for about 8 years now, so I know what I'm getting into), and I am using your parameters. Fibonacci lines from the previous day's close to the current day's open, and a 5EMA. I traded BSFT today, and made an entry on a break of the 4th bar's high after price pulled back to re-test the current day's open. I had a running stop-loss (mental) of a break of the 5EMA, which didn't happen. I actually added to my position on a break of the 20th bar's high. I closed the total position when price finally broke the 5EMA, at $46.74. Price rallied past my exit but I was happy to get around 9 and 3% on both positions. Thanks!

Here is Brian's chart with his two entries and exit (black dashed line) marked:



Building on last week's post, here is another example of the simple setup discussed. AHD gapped up and the first two bars were strong. It topped out and made an orderly pullback with bars 3-8. If you plot your Fibonacci lines over the morning's low/high (the first two bars), the pullback did not close below the 50% level of the morning's range. The eighth bar was a green body, closed back above the retracement zone (RZ), and had support from a rising EMA. The entry was a break of the eighth bar's high, and exit was the Fibonacci extension. The trade provided over 4% profit in under an hour.



Note the new color scheme...I think I like this one best, as using white for the 5 and 8 EMAs makes them easier to see on the browser. Let me know what you think based on the different ones I have posted.

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CADX - 030411

Juan posted the following in comments:

"X, I decided to follow your advice and focus on three setups. Although it has only been a few days, I have not had a losing trade! Friday I took a trade in CADX, and exited in under 5 minutes with a 4% gain. All of your principles worked perfectly, including the exit which was at a whole dollar - $9. Price reversed and never rallied back to that point. I entered on a break of the 4th bar's high. The first two bars were strong and green, the third bar was a pullback, but it didn't penetrate the 50% mark. The 4th bar, my trigger bar, was strong and had support from a rising 5EMA. Along with the third bar, it formed the offsetting bar pattern you frequently refer to. I got lucky with a good entry, and sold a few minutes later when price hit $9. I wish they could all be that easy. I am ready for next week!"

Here is Juan's chart with his trigger bar and exit marked in black. The volume might have been a little low for me, but congratulations on a great trade!



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BGS - 030211

BGS is a classic setup that happens multiple times a week. I have posted charts of this particular setup for years, and it still works flawlessly and has a substantial success rate (well north of 80% when combined with the other factors I consider in taking a trade). I've said it before - if you pick one setup and focus on it, and don't allow yourself to overtrade or get suckered into trading subpar setups, you can be highly successful.

BGS gapped up, topped out, and made an orderly pullback that didn't close below the 50% mark of the morning's range. The 4th and 5th bars were "offsetting bars" as I like to call them, and the 5th bar was strong, had support from a rising 5EMA, and closed at its high (not to mention it was a narrow range bar, for those of you that follow that kind of thing). I entered on a break of the 5th bar's high, and exited at $17.00 (just above the Fibonacci extension (FE)). The target was hit in under 30 minutes, and the total profit was almost 4%.

Also, I am still experimenting with chart colors to find out what works best. Many of you didn't like the previous colors, so now I am trying these. Both the 5 and 8EMA are the same color (blue) because I really don't care which is which. The 100EMA is black, and my Fibonacci lines are white. Let me know if this is easier to read.



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