ARTC - Classic Trader-X style - gap - consolidate - base and break of ORH. It was slow until it took out $50.50 and then it moved like a gapper should move. After taking out the 38% Fibonacci extension of the previous day low to the ORH, I though it might go to 62%, but it was exhausted so I closed the position as soon as the 2nd last candle started printing red.Friday, July 27, 2007
Dummy Gapper Trade of the Day - ArthroCare Corporation (Public, NASDAQ:ARTC)
ARTC - Classic Trader-X style - gap - consolidate - base and break of ORH. It was slow until it took out $50.50 and then it moved like a gapper should move. After taking out the 38% Fibonacci extension of the previous day low to the ORH, I though it might go to 62%, but it was exhausted so I closed the position as soon as the 2nd last candle started printing red.
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18 comments:
Hi Jamie,
What do you think about HOKU now? It had breakout up at close. Do you think it has leg uptrend? I read your blog every day and think your are good.
Yhank you.
Nancy
I never looked at my long scan candidates. Very cool. I am starting to try and look at pivots more closely. It helped pick my trade today.....thanks! Although, is a swing low alone considered a pivot?
Nancy,
Thanks for the compliment. HOKU retraced 61.8% of the move from the June low to the July high when it tagged $8.30 today. Then it carved out a perfect intraday reversal and rallied up to $10.00. Nice trade, I'm sorry I missed it. On the daily chart we have a bullish engulfing bar so it looks like HOKU wants to move back up. There is resistance from the bearish earnings gap.
Hey Zoomie,
Nice trade with GSK. I like the NR inside bar which was your trigger. Yes the swing low was a PP. I'm happy to see that more gap traders are looking at the daily timeframe to assess the setup in more detail.
This trade made me think of my papertrade of CROX.
Here is my papertrade break entry.
5 min chart - 11:05 or 11:10
10 min chart - 11:10
15 min chart - break of ORL
Are these correct and would 15 min entry be best of all?
Btw, I forgot which stock I saw last week , 5 min chart entry is near ma but 15 min chart still far from it. Since 15 min is usually for formation, do we still wait for ma to catch-up or enter according to 5 min?
Thanks for the feedback. Watching your trades and how price reacted to the pivots sold me! Or bought me in case of longs ;)
Nice trade. ARTC was also an intra-day cup with handle on a 5 minute chart - - and fulfilled the cup's target price exactly.
Relatively new here - nice blog - thanks. Read your interview ...are you still not trading full-time? I've been full-time for about 5 years - - based on the trades you're making (and your superior trade management), if your not full-time, I'm may get depressed and reconsider my career.
Jerry,
I use multiple timeframes as well, but I prefer to manage the trade on the 15 minute otherwise it's too tempting to take quick profits on the shorter timeframes. I like the NR7 inside bar on the 15 minute 11:00 as a trigger bar, but still above the 5 ema so very risky. What was your target the rising 20 ema?
AVCI on July 19 had a 20% gap open and set up a nice trade on 5 minute timeframe but 5 ema was too far on 15 minute. These are usually quick vertical moves which have to be managed on the lower timeframe.
Zoomie,
That's great. PPs very helpful in setting up the trades. Adds to my confidence level as well. No point in taking a short position if the stock is going to fall into a wall of PP support 10-20 cents away.
Ferde,
Good eye on the cup and handle - perfect 100% extension. I will try and incorporate this type of chart pattern analysis in future trades. It helps determine the correct exit.
Thanks for the compliment and welcome to the blog! I am currently trading full time but find that I still don't get enough trades in. When I was working I would trade 1-2 positions per day and now 1-4. I've been experimenting with the Trade_Ideas scanner to try and fill some time with intraday scalps. Yesterday afternoon managed to catch two nice moves from the scanner with ALXN and MBI.
On average how many trades do you execute per day?
Well, the target from the fib ext. 25% (draw intrady high & low on 5 min chart).
I never remember to view bars as nr3-7, I will noted this down.
So depends on the gap %/dollar, use timeframe accordingly. Got it. This is like kung-fu fighting.
Learn 2 things today.
Thanks.
LOL, yes it is very complex at first but soon everything will become second nature.
Btw, on a daily chart like CHL, how do we handled it?
Do we change it to weekly timeframe and draw support/resistance/PP line?
What if a chart have trades (up/down) congested in tight area, How do we find a point to draw the support/resistance/PP line any?
Jamie,
I average about 12 trades a day, more on bad days, fewer on good days when my early trades run well.
I'm working on trading less often and emulating the patience that you've shown when you let your set-ups emerge. I have too many scratches/small losses which take time to manage and which keep me from finding stronger set-ups.
Nice PM trades on ALXN and MBI. I'll have to check out that scanner. I tend to look for counter-trend set-ups in the afternoon. SONS on Thurs (14th bar entry, 50% retrace target, coming off a higher low, upturning 5ema, on a strong candle above the OR low) is an example.
Jerry,
Look for the closest round number $x.00 or $x.50 in the congestion area. I see a PP at $54.00. Weekly adds different perspective but more long-term. Stocks with lots of gaps require more work because each gap is a potential S/R zone.
Ferde,
Agree that those small losses and scratches take up too much time and have a negative impact on the psych of the day.
Great trade on SONS.
Still working on the scanner to refine the quantity and quality of the hits I'm getting. 99% of the hits don't pan out. ALXN caught my eye because it was on the gapper scan previous day.
Like your strategy of counter trend in the PM. Will try that this week.
Thanks for sharing and Good Trading!
Jamie,
Your blog is definitely one of the best and I read it every day. I think it's a challenge to spot these trades in real time and just wonder on average how many stocks on your watch list per day.
The following is a couple of questions you may choose not to answer all or some of them:
1) What's your expectancy in terms of R?
2) What's the winning percentage?
3) Your average win in terms of R.
4) Your average loss in terms of R.
Thanks Anon,
Agreed, the biggest challenge for a trader is to spot the good setups and monitor them until the BO point. Of course at the end of the day I always go over the ones I missed, but there's no way one person can possibly get to all of the setups unless the watch list is very short.
My average expectancy is 3-4 R. I don't track all of these metrics diligently. I probably should but I'd rather spend more time scoping out watch list stocks than reviewing the day's results. However, I do believe that it is important for new traders to go through that process.
The trades that come from my three main strategies (Gap, PP, and B&B) or a combination thereof, have a much higher success rate than unplanned trades such as intraday scalps.
Not all setups are picture perfect, but if they meet 4/5 of my trading parameters for that particular setup, I take the trade. There are many trades that don't reach their targets, but are still profitable. Never compromise on the stop if it was set at a strategic point.
Good trading!
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