These trades are submitted by Michael. Here are his comments:
"As you noted in a past post, I trade reversion to the mean type setups and I don't use Fibonacci lines often (though I use them some). Basically I look for a strong gap up or down with a lot of white space between current price and the 8EMA. I look for a signal using candlestick charts (and my experience interpreting them), and usually exit when price moves back to the 8EMA.
I also trade longer timeframes - predominantly 30 minute charts. I find that the setups for these types of trades work better on longer-term charts. They do work on shorter timeframes as well, but there tend to be a lot more failures.
A few more tips: movement is key...don't take setups that are in a range. Wide range bars followed by reversals work best (see example 1 below), or an obvious movement out of a trading range (see example 2 below). But, trading a signal that doesn't move out of a trading range (ie, forms in consolidation) is a recipe for disaster. Also, I don't enter trades much after the first three hours, and I prefer setups that work off a gap as opposed to just a sharp move that creates a lot of white space.
Here are two examples from Friday:
GDI - very wide-range first bar. Narrow range 2nd bar. Entry on a break of the 2nd bar high. I closed the position 3 bars later - just shy of the 8EMA - after the 3rd-5th bars all left upper tails. "
"GSVC - this setup represents a movement out of a trading range, in this case a trading range formed by the 2nd-3rd bars. The 4th bar was a strong move up, and the 5th bar was a strong hammer. I entered on a break of that bar's high. I closed the position when price rallied but fell back below the $16 whole number mark."
Be careful with these types of setup - it can be like trying to "catch a falling knife" (for a long entry) or "stepping in front of a moving train" (for a short entry). There is a lot of risk, but if you know how to read and interpret candlestick charts there is a lot of potential. Let me know if anyone has questions.
X note - I marked Michael's trigger bar with an arrow; the entry was a break of that trigger bar's high.
Trading 29-Sept-2016 (+ $0)
6 hours ago