"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."
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6 comments:
[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.
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.
Tom
nice trade
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.
The 5EMA is interesting. Less setups but higher probability. Thanks.
TT
Yes TT, it probably cuts my potential candidates by 50% on some days, but higher odds of success.
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