This is a 15 minute timeframe of FWLT. It gapped up on earnings and retraced about 25%. It carved out a hammer reversal bar and then set up series of mini base and break patterns on the 5 minute timeframe below. As you can see from the 5 min. chart, I actually entered before the ORH was taken out on a bullish base and break pattern. My exit was the 38% Fibonacci extension of the previous day low to the ORH. Classic Trader-X I think.
B was a failed gapper dummy setup. The blue and red arrows indicate my entry and exit. Why did it fail? What went wrong?
7 comments:
I was about 1 minute too late for FWLT. That one really hurt as I was waiting for a narrow entry. Glad you got it, nice work. I actually did trade B on the 5-min chart and sold when it hit the fib. ext (intraday fib. lines).
Thanks ooNR7,
I'll have to look into the intraday Fib. lines.
Hi Jamie. I traded B the same as you. I dont know what caused the rally to fail but it was a quick and profitable trade.
Very nice trade on FWLT.
One question, did the volume drop off (prior to you entering) on FWLT scare you at all?
Hi Jamie,
For B, why did you exit at where you did? Seems like you were only in the trade for a short time.
Zen
Hadman,
The volume usually declines during consolidation. I was hoping volume would increase substantially after my entry and it did. The narrow price and volume action before my entry felt like NR7 - contraction before expansion.
Zen,
I exited B when I did because it felt like a failed pattern. Volume did not expand after the break of the ORH and that indicated a potential failure. I'd rather close the position with a small profit than risk a loss. Remember failures sometimes result in fast moves in the opposite direction.
Post a Comment