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Thursday, February 23, 2012

Promoted from comments...

John posted this trade in comments, looking for feedback:

"I had a homerun with LL today on the Michael setup. Gap down, wide range first bar, second bar narrow range doji (which led me to believe the downmove was stalling). Entered on a break of the second bar's high, rode it to the 8EMA for a little over a dollar gain. Question for Michael and anyone else - would you have taken this setup even though the second bar was slightly red? Thank you in advance."



Ron said...

[moved from comments on last post]

John, I traded this as well. It was like Michael's GDI chart, but the doji was slightly red whereas his was slightly green. Good trade.

Anonymous said...

I avoid red hammers though they may be tempting because the probability isn't as high as if they are green. However, that is on a shorter timeframe (5-min). I would need to do some research on doji bars on longer timeframes - maybe closing slightly positive/negative isn't really a factor? Interesting research for the weekend.


Times of Your Life said...

nice trade

Ken said...

These trades are really good, solid setups. One thing I am toying with - using a 5EMA instead of an 8EMA for the exit, or at the very least plotting both of them. The 5EMA has kept me out of a few "iffy" setups by not allowing enough room between entry and exit, and it usually lets me exit at a more solid level whereas I feel the 8EMA is only about 50/50 on getting hit. Just something for you guys to consider.

Anonymous said...

The 5EMA is interesting. Less setups but higher probability. Thanks.


Ken said...

Yes TT, it probably cuts my potential candidates by 50% on some days, but higher odds of success.