Monday, March 16, 2009

Range Trading


The first chart is X and it was one of the weakest WL stocks Friday, setting up a short when it couldn't hold the R-zone of the PDL to ORH as support.

Today X printed an IB in the upper shadow of the OB, green on green, for a target trade back up to Friday's high. It then carved out a tower top reversal pattern for a short back to the R-zone.

SU and CNQ set up shorting opps on Friday after Thursday's big rally. I was hoping to go from top of channel to lower channel, but prices stalled.

Today they opened weak but found support on the lower channel and rallied back to test Friday's highs. SU carved out a morning star reversal for a long entry and CNQ IB. After testing Friday's highs, we had shorting opps.

So, we were long SU and CNQ Thursday, short Friday, long and short today - making the same money over and over. Tomorrow, I expect the channel to break.

I added ECA to the short oil list as it extended to the 50% Fib. level of the ORL to PDH.


MS, a long on Friday, should have been shorted on a trendline break, but I missed it. Eventually, it carved out a bear flag for a quick short.

8 comments:

Jean said...

Hello, What are the two parallel diagonal lines on su and cnq? I have heard of Andrew's pitchforks. Is this what they are? Thank you.

Jamie said...

Jean,

Esignal refers to this drawing tool as regression trend channel. They have a pitchfork tool, but I'm not familiar with how it works.

john said...

Here I was, pleased with myself for doing OK on a non-trending day, then you bitch slap me with your inspired trading ...I sincerely appreciate your continual raising of the bar.

Do you have a feel for which stick patterns have the highest win rate? ...do you have a preferred time frame (e.g. 15 minute) for various stick patterns?

What's your overall win rate on trades?

Thanks

Jamie said...

Thanks John,

The three stick patterns are usually powerful as long as they form at well defined support/resistance (Fib) levels. The one stick patterns often foreshadow a reversal but finding the correct entry point is sometimes more challenging. Twezer tops and bottoms also good, but sometimes retracement is shallow.

The longer timeframe (15 min.) is much more meaningful when it comes sticks, but I prefer shorter timeframes for chart patterns.

Average win rate is tracking around 70%.

Trader 504 said...

Add me to the bitch slap list. Great job Jamie.

Jamie said...

Thanks 504,

Trading the same stocks over a few days gives me a good feel for the price action.

yr said...

Jamie,
What do u mean by three stick patterns?

Jamie said...

YR,

I should have said 3 or more stick patterns, such as morning star, evening star, which have 3 plus tower tops and bottoms which have three or more.