Thursday, October 19, 2006

Trade of the Day - United States Steel Corporation (Public, NYSE:X)

X tagged its 10 day MA on the daily timeframe and immediately reversed on high volume. Once it had taken out its OR high I was looking to get long. My entry was just above the 200 MA. I didn't place a hard stop , but I would have taken a loss if X had breached the 200 MA on a closing basis on the 15 minute timeframe. I booked 50% of my profit after a 1 pt. gain and moved my stop up to yesterday's low. X carved out a bullish engulfing bar on the daily timeframe and I sold my remaining position on weakness late in the session.

2 comments:

Andrew said...

Hi Jamie,

It looks like you are using simple moving average as oppose to exponential. Can you elaborate on the significant of using the two when it comes to the 15 and 30 time frame? What’s the benefit of one over the other when it comes to daytrading, especially trading gapers/breakouts on the 15/30 timeframe. Thanks

-Andrew

Jamie said...

Hi Andrew,

I'm actually using the EMA on the shorter timeframes 10 and 20 and the SMA on the longer timeframes 50 and 200. I try to use what is most common amongst traders. The reason for the 10 and 20 as opposed to just one MA is convergence and crossovers. If the MAs coverge and crossover just below price it is bullish, and vice versa.