TBSI from the WL and highlighted on the Briefing.com gapper list, set up a low risk short following a narrow range consolidation. The entire group was weak including DRYS. A quick look at the DRYS daily chart and it is clear that this is a reversal as opposed to a retracement. What's the difference between a reversal and a retracement? Volume - high volume on reversals as opposed to lower or declining volume on a retracement. Three WRBs in less than a week and a 22% price decline. The bull is gone and the bears are clearly in control.
V was a
HCPG pick at $78.00. Thought I had missed the move on this one in early trade, but then V delivered a low risk, dummy short (NRIB -NR7) right on the number. Sweet!
LEH was a B&B short. The target was the ORL and I took a partial midway near support from the the second bar low.
TBSI from the WL and highlighted on the Briefing.com gapper list, set up a low risk short following a narrow range consolidation. The entire group was weak including DRYS. A quick look at the DRYS daily chart and it is clear that this is a reversal as opposed to a retracement. What's the difference between a reversal and a retracement? Volume - high volume on reversals as opposed to lower or declining volume on a retracement. Three WRBs in less than a week and a 22% price decline. The bull is gone and the bears are clearly in control.
V was a HCPG pick at $78.00. Thought I had missed the move on this one in early trade, but then V delivered a low risk, dummy short (NRIB -NR7) right on the number. Sweet!
LEH was a B&B short. The target was the ORL and I took a partial midway near support from the the second bar low.
15 comments:
Jamie, thanks for the posts. Very informative. I've noticed over the past few months your style has changed a bit. It seems now you are more in tune with the overall market and you give a more top down approach, which is excellent. Keep up the good work.
Can you comment on a trade I took today. PERY on the 5 min chart rallied strong into yesterdays high before an orderly retracement into the 5 ema. I saw an excellent oppurtunity on the 10:05 NR7 forming right at the base of $26.00. As you can see the next bar broke through $26.00 on very high volume and I rode the stock until the shooting star around $29.00. Obviously things worked out on this, but I was wondering if you had any comments.
At the time I entered the 15 min chart look beautiful too. The 10:00 bar was a double inside NR7 (although it didn't close that way). The only caveat was that the 5 ema was not as close as I would have liked.
What would you consider this play? A B&B, C&H? It almost looked like a C&H (starting from yesterdays high) but its hard to distinguish. The handle also have very high volume which is unlike a C&H.
Do you think the entry was too premature? Should one wait till a break of the ORH. The 10:20 NR7 may have been safer?
Any thoughts would be greatly appreciated. Thanks.
One last question :)
If you took the PERY trade off of the 10:05 NR7, what would you use as your stop? Low of the NR7 or the low of the retracement ~$25.60?
Thanks.
Hey Jamie,
I noticed your using the 50 SMA intraday as opposed to the EMA. I'm currently looking at 5 and 20 EMA for both. Why the preference of the SMA over the EMA for the 50? Caught that V as well, great setup. Thanks.
Nice trade in V... I mean, I had your entry, but you kicked my ass with the exit.
I noticed that you use 15-minute graphs to explain your trades. Do you use them as well when you're making your entries? I figure you have to use a smaller timeframe intraday, right?
I still need loads of work with my exits and I'm wondering if I should be focusing more on longer time frame graphs once I get my entry... because I tend to jump on profits... perhaps the longer timeframe would help me stick out the trades.
Have a nice long weekend.
-DT
PDT
Nice work with PERY. Looks like a B&B at $26.00 on the daily. Except for the minor breach on yesterday's OR, $26.00 was the pivot high over the last few sessions.
Stop placement is a function of trader psychology. Trading to win vs. trading not to lose. I use previous bar high or low on the 15 minute chart, but on a 5 or 3 minute chart, I prefer to give it a little more room. If there's an outside bar , I go with that.
In my trading not to lose strategy, I tighten my stop after each new high. In the PERY trade, you could have moved the stop below the 5 min. NR7 after the BO took out the previous high.
The trade was perfect. I prefer to get in as close as possible to the whole $ number. If the ORH is just 5 cents away, I'll wait.
Alex,
I use EMA for 5, 10, and 20 for smoothing purposes. For the 50 and 200 I use the SMA because they are the most commonly used by Wall St. traders.
Yeah, V was a perfect setup. Congrats!
Hey DT,
Yeah that V setup was a gift.
I use 4 timeframes daily, 1, (3 or 5), and 15 min. If the trade sets up nicely on all 3 intraday timeframes and has room to move on the daily, I take the trade. If I have a lot of confidence in the setup, once it gets going, I manage the trade on 15 minute. If I'm scalping, I manage on 1 or 3 minute chart. Most of my gapper trades are executed on the 15 minute.
If you're trading to win based on a setup you have confidence in, you might want to let your profits run, or partial out after 3 WRBs or obvious S/R levels. If the setup is less than perfect, or the markets are choppy, then, I sometimes use the trade not to lose strategy. After the initial BO I tighten stop after each new high. So on a three minute chart, my stop is just one or two bars behind the current price bar. This strategy usually insures a win unless the BO is a complete head fake, but if the stock really takes off, you want to give it more room, otherwise you'll get stopped out on the first pullback. This last strategy works best with highly liquid stocks.
Nice trades Jamie.
I love shorting DRYS, but for some reason my broker has no shares now for the last month or so.
Glenn,
Hate when that happens. So far shippers are available but some of the smaller solars not available for shorting here at IB.
Scratch that, tried it this am and am now short DRYS 90.59, hope I can hold all day.
Also your reversal and retracement info is very educational, tks!!
Jamie,
Thanks. Similar problem for me today in the SLB. Actually, I just got in early twice, was shaken out, and then the third time, when it broke for real, I covered some too early because I thought for sure he was gonna screw me again.
Looking forward to seeing how you demolished this trade. Just breaking $100 now... I covered my last shares at $100.65. Shoot me.
-DT
So much for hold all day, I bailed on DRYS at 9:32 for 2 pts. Rally on.
Nice work Glenn!
I sure never believed in holding all day anyway.
DT,
I wasn't here this morning. Great job on SLB!. I missed the best part of the day and got stuck with the afternoon chop fest. Managed one good trade in QCOM, the rest was just trading not to lose.
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