With my new schedule I really needed to find a trading style that was simple effective for gappers and could be applied throughout the day. What I ended up focusing on were two and three bar retracements. I find these to be not only easy to spot but also highly effective. Also. I'm also going to concentrate on just the :15 timeframe for a more 'relaxed' (dare I say) trading experience. The retracement change is pretty simple. I look for 2 or 3 bar retracements (either up or down) with a reversal bar and I enter on a confirmation of the reversal. I also be for potential 'create' retracement plays where the reversal bar sets up against the retracement trend but there is no confirmation. I remember Trader-X saying a while back that this is a copy you should be for if you wanted to reduce candidates or wanted more high probability trades. So here's a look at some charts this week that fit the above criteria:
guys.. you're gonna be to look at the affix and the charts again. My definition of a retracement means price movement. So if determine moves two bars up prints a down bar then a confirmation bar afterwards... I be to enter. Of cover standard rules bear on: reversal and entry bar must close below 5ema and fairly change in range (around 1%). I also like my entries to be at least within the 15-min opening range or near the ORL/ORH. Tom: as for GG two bars prior to my entry bar was also a valid entry point (probably a better one) but I didn't realize the low had been taken out. So at least you recognized it. Also. I place my stop-limit orders 2 cents above/below my entry.
bl: as I mentioned above it might be easier if you thought of retracement as price movement. So using FOSL as an example.. there was an obvious determine movement starting at 12:30. And while the movement was move of an overall 4 bar act.. the most obvious were the measure two. Okay now at 1pm at the end of that act a down bar printed which would signal a reversal (especially after a 4 bar act). However the 1:15 bar was an inside up bar which never broke the low of the 1pm bar and never confirmed the potential reversal of the 1pm bar. My thinking now is that if the high of the 1:15 bar can be taken out it will just act the upward move and prove that the 1pm bar was not in fact a reversal bar but just a pause. This all comes from reviewing charts of stocks in my watchlist. I didn't take this trade but it ordain show up as a candidate the next measure around. Greytrader first brought up FOSL in a comment on Tuesday.
best way to make money in daytrading is just take a shot at your check enumerate stock.. change surface at 50-50% probability that you would be right all you gotta do is bring home the bacon move.. that is cut your losses and run you wins. This is all you need for daytrade. forget all those lonwinded candles/retrace/NR blah blah blah..5/15 min interpret.(does anyone seriusly believe that 5/15 min prints carry some turn. daily movements are random folks (unless of cover guided by broader market moves)so bring home the bacon you exits and just buy/sell your check listI have consistently made 50 k for 5 yrs this way and just working too 1 PM... I have a life you know...
Anon,Sounds good to me. Trading Solar stocks has been very profitable for some. I think we are trying to better those odds with gap stocks which can undergo increased volitility than WL stocks. NR7. Sounds like your saying 2-3 bar determine movement. 1 bar reversal. 1 bar confirmation of the 2-3 determine movement? Also bars 8-9 up determine movement return 10. 14 could have broken 9 bar high. All higher lows. Or do they have to be continuous? (Bars 11,12,13 non confirming.) Then again 17 confirms up price movement of the whole mess!. Ah life show me path.
anon.. whatever works for you. For me. I don't just throw money at stocks hoping they bring home the bacon. There needs to be some kind of plan. For entries and for exits. I look for entries with the highest probabilities of success.. then throw money at it :)bl: yes you got it right with your first sentence. As for the chart bequeath that I am looking for increased volume on my confirmation bar. While there were other retracement plays.. the volume might not undergo been there during confirmation. I still think there's opportunities to acquire from low-volume confirmation bars... I'm sticking with the volume for now. You may want to experiment on your own to see what the results may be. And yes. I do look for continuous retracement not broken up.
oonr7 what can I say? Simplicity at its beat!. An (1)orderly retracement followed by (2) a candlestick reversal bar (top/bot)(3) reacting above/below 5ema combined with an (4) internal bar is sophistication at its humblest origin. I like the 30 min for stalking the the candlestick reversal bar. desire a fine booze. "I Let the trade infuse with the discipline to be patient (for an internal bar to develop) and the conviction to act once the opportunity manifest itself". Once the candlestick reversal bar is spotted. I like to walk the 1/4 hr for an internal bar. On the 1/4 hr. I especially like when I see a WRB + NRB's "congestion area" then I experience the odds advance a great r/r set-up. Rudy
the 50/50 come about is really interesting b/c fees are not high and yet its reported that maybe 90% or more of daytraders fail i think this supports notion that trading is in fact very counter-inuitive the same "bias" that causes most to fail would not i accept be negated by random entries gaps undergo directional prejudice volatility be expansion volume and with fib extensions target prices if i didnt change gaps i'd go approve to trading only the Qs recently ive been very tentative about taking trades watched PBR and JBX on friday.
rudy: thanks. What I desire most about this method is that I don't need to dress a thing to my watchlist prep work. I still only be at gappers and unusual volume. I definitely look forward to utilizing the 30-min as come up lp: thanks for the advice. However instead of picking up books. I'll be picking up my kids :)to the anons: if the 50/50 system works for you.. more power to ya. Seems odd to combine a system that basically says you're wrong. Sure it can work.. but I imagine it would require a lot of capital to put the odds in you're favor.
GT: thanks for the complement. Someday I might. For now. I am more focused on the psychological aspects of trading. I can't imagine I will add anything new in terms of chart analysis that maoxian or trader x did not already exponded upon. OONR7: after a retracement the reversal bar should be a candlestick top or furnish bar. This is usually a wider stop = higher risk entry point. I ordain be to the 15min for a "congestion" breakout govern.. this may consider one or more internal bars (the more the merrier). I like to set my forbid at the prior 15 min high/low bar for an earlier and displace risk entry than the 30 min. However. I do affirm the 30 min for an IB or a WRB (if 15 min "earlier" entry) to ensure the trade is "still going my way". All things been equal. I do like an internal bar on the 30 min and trading 15 min congestion be breakout!. wish this helps. Rudy
BL. JBX 30 min chart on friday: (1) Retracement on 2nd bar(2) Reversal bar on 3rd examine: (higher low) and notice 15min there was a beat candlestick furnish.(3) the 4th internal bar completed the set-up pattern. In addition:(A) on the 15 min note the proximity to rising 5ema = not extended.(B) also sight the "congestion area" on 15 min = breakout player's paradise!.(C) this was a base and.
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