Gold was hitting new highs again this morning but the usual suspects (ABX, NEM) were too fast out of the gate. GOLD tested resistance on the open and consolidated sideways until the rising 5 period ema caught up with price. After closing above the ORH, it carved out an inside bar, which was my cue to get long. I exited on a euphoric volume spike after 3 WRBs thinking that it was the end of the move.
6 comments:
Nice catch Jamie. Was this a gap up scan or intuitiveness?
BL,
A little of both. I ran a gap up scan but focused on the gold stocks from the scan.
Jamie, great move! I was wondering if you would have also played it this way:
-break above doji 5/15 high? OR
-buy 2 pennies above breakout?
In you view, any problem with the above method?
Also, I noticed you entered on break of 7/15 high. Why not break of prior bar high i.e. 8/15?
Anon,
In this particular setup of sideways price action, I would prefer not to anticipate until price initiates a move higher. Therefore, I would caution a break of 5/15, instead wait for 4/15 to be taken out. 2 pennies above BO is fine but much wider stop.
I prefer to wait until an inside bar takes out previous bar except in a flag pattern. If price can't take out previous bar there's no trade and no unnecessary stop out - a good way to protect capital.
Thanks Jamie. I didn't quite get the last part though. You're saying you prefer to wait for entry bar to take out high of the bar BEFORE the inside bar, as in the case of this trade...is that right?
Anon,
Yes, that's what I meant. This is especially true if the inside bar is a regular doji (indecision).
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