MDR was my gapper long on Friday and it was sweet. Today it was a perfect PP gapper short. They say price has a memory and that came through in spades today with MDR.
I've color coded the pivot lines on the chart above so it easy to understand. Just click on the chart to enlarge the view.
The blue line has held as pivot support over the previous two sessions. Today's gap open breached the PP, but price quickly reversed in an attempt to regain it. The retest ultimately failed and presented a dummy shorting opportunity on the 5th bar. The red line is Friday's ORH and I used that level to lock in some profit as I knew it was significant and would likely provide some support. Price bounced from this level but could not close above the declining 5 period ema. The pink line is Friday's ORL and I covered the balance of my position as price swooned into this level. The green line marks the gap fill from Thursday to Friday of last week. Move stop a few ticks above the last red WRB on short positions and below last WR green bars for long until price approaches target.
After filling the gap, MDR carved out a perfect hammer and set up a long entry. The reversal rallied almost all the way back to the primary PP.
NB - The 38% Fibonacci extension of the previous day high to the ORL lines up nicely with the gap fill level.
14 comments:
Nice trade, both ways.
I traded BZH today, break of 11th bar on 15min. Moved stop 2 pennies above 12th bar after its completion (thank you for that :-) )
I exited on a break for the 15th bar high for a small profit. Any comment or suggestions ? You seem to nail your exits perfectly.
The red line also happens to be where the 200MA is. (Been reading Olivier Velez stuff)
Thanks GT,
BZH is a tough one. PP support dates back to 2001-2003. It is always easier to pick S/R points from recent memory. I see PP support at $19.25 dating back to early 2001, but price didn't approach that level today.
The market bottomed around noon and rallied into its declining 20 period ema. From that point on it was a chop fest. I think BZH was just trading with the market and I'm sure I couldn't have done any better.
I met Oliver Velez at one of the Pristine promotional seminars. My impression is - He's a good salesman. His partner Capra is the genius trader on the team.
GT,
Are you reading his new book?
I see - the 200 SMA lines up prefectly with Friday's ORH and acted as temp. support on the way down as well as resistance on the way up.
Good stuff!
I am about halfway through it. It is not specifically on intra day trading but I am learning a lot from it. They use 15min 5min and 2min for their intra day examples with the 200 and 20 MA. I watched his latest promotional video, he is no longer with Pristine. www.vcmtrading.com
If you take his seminars, he lets you trade with $50000 of his own money (he sets your max losses). Check out his Trader Advancement Program table on the website.
I don't know, it is expensive, but I have lost a lot more than the price of the seminars learning this stuff...
I am also looking into buying the DVD Intra-Day Trading Tactics with Greg Capra (2003)
It is a lot cheaper than the 7 day class at VCM but these things are often just introductions to the expensive seminars...
Jamie,
Did you take partial at the red line on the way up? Thanks
Zen
Zen,
No partial on the way up, but moved stop to breakeven after price stalled at the red line.
GT, I bought the micro trading tactics DVD with O. Velez. At the time I found something was missing - setups were not described in enough detail. I'm going to view it again this weekend to see if my opinion changes now that I have more experience as a trader.
I checked out the VCM trading site and I see how he can allow students access to $50k. He keeps them on a tight leash - 100 shares per trade with maximum loss per day $30.00. It could interesting for a trader who is almost there and can accelerate to higher risk/capital levels quickly.
I bought the Capra DVD on Ebay for 20$, we will see.
Should be good. Give us some feedback when you're done.
Will do
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