GRMN from the WL, gapped out of a bearish flag (daily) and finally set up a dummy short just below the ORL. The entry is Trader-X style - wait for a NRB in close proximity to the down sloping 5 period ema, as price takes out the ORL. I mapped out the Fibonacci extension from the previous day high to the ORL, and then I looked at the daily for potential pivot points.
The swing high from 22/01/08 (January reaction low) was exactly $62.00 and it matched closely with the June 8th 2007 retest of the breakout. This is a significant level and whole dollar level so I decided this would be my target as opposed to the Fib. extension. If you look at the 1 min. time frame below, you can see that price rallied almost a full pt. after tagging the PP.
My afternoon trade was a perfect C&H pattern on the 1 minute time frame. I was cautious with my exits because the cup and handle base is quite a distance from the morning swing low (38% Fib. retracement) and I wasn't sure if the usual 100% extension for this pattern would be realized. From the chart we see that it tagged 100% and immediately reversed.
3 comments:
I'm curious how you determine the daily pivot point, is is two times the OR?
Rick
Rick,
I've just updated the post with explanation on how the daily pivot was derived. It's visual as opposed to mathematical. Also check the CSIQ trade a few days ago with a good example of finding the PP.
Thanks, that helps. I just read Trading the 10 OClock Bulls, so I will probably start incorporating Open Range breakouts in my trading. It seems like a very helpful way to look at the markets.
Rick
Post a Comment