Trading futures

I'd like to learn more about futures... in particular, the risk/reward aspect of it. For example, what are the costs of contracts and how much money can be made per point or whatever. Basically, I need info. Any of you know of some good online articles/blogs to read?

Oh... and Happy New Year to all.

Top ten lessons from 2007

Dare I go out on a ledge and say that 2007 was indeed a breakthrough year for me? Well, it was and without me really knowing it till about halfway through. I've been daytrading for about 2.5 years now and full-time for almost two. I keep hearing it takes at least three years to become proficient at daytrading (if you make it that long). So, as I approach the infamous third year, I hope I can continue to sharpen my skills, pick good candidates and refine my trading style to help maximize profit. Here's my top ten list of things I learned this year:

10 - Papertrading a new strategy is essential for me.
9 - Switching to IB and Quotetracker made me a better trader.
8 - Solid understanding of price and volume.
7 - Creating a good watchlist.
6 - Understanding 'typical' market fluctuations during the year.
5 - Losing money is part of the game.
4 - Being wrong is part of the game.
3 - Waiting for the perfect setup will increase discipline... not profits.
2 - The best entry is easier to spot than the best exit.
1 - Being a profitable trader is entirely possible.

No trades till next year?

I don't know... the action the last couple of days tells me I should just wait till the beginning of the year to trade again. I really don't like wasting time following a bunch of duds that go nowhere. Plus, it's not like volume's gonna pick up during the holidays.

Out sick

This flu has kicked my ass.

BMRN - Long

Been battling the flu the last couple of days so staring at charts has been quite the experience. Today, I went long BRMN on a break of the 9th bar high. My entry was a reversal bar after a red hammer. I typically don't like buying after a 4 bar rundown, but the pullback was pretty shallow. I squeezed out 2R and called it a day. Price looked like it was really going to surge after my exit and I was going to be pissed... but it ended up coming back down. Have a good weekend.

Mixed bag

Shorted ELN and KEM and got out fairly early after no initial movement (small loss with KEM and small gain with ELN). Went long AMIS off the 2pm bar high for some profit. Overall a pretty forgettable day. No interesting charts to show.

TWTC, ALO - Short

Two trades today... both short. I entered ALO after a two bar retrace into a reversal bar (12:15). I partialed after price didn't immediately move and hung around the ORL. I fully exited for a small loss on a break of the 1pm bar high. The next trade was TWTC and I entered after a failed reversal bar. Partialed after 2R and sold the rest just above the fib. ext. I explain the entry a little more on the chart:

MEDX - Short

What's up with the huge fall after the cut? I don't get it... wasn't the cut (and the amount) expected? Anyway... I was hoping to catch some moves in the PM but it doesn't look like that's gonna happen. Made one trade today in MEDX short on a break of the 9th bar low. The 8th bar was a spinning top and looked like price might reverse from there. But the 9th was an inside bar and finished very weak. I implemented the 2R rule and covered at around 10:50. Let's hope tomorrow provides some serious volume and nice moves.

PLAB - Long

Going into today I told myself I was going to try my hardest to 'take the money and run'. Basically if I can make 2R (based on the spread of my entry candle)... I'd take it. And that's what I did with PLAB (twice). From the :15 chart my first entry was the 5th bar high and the second was off the 1pm bar high. The second entry wasn't off a retrace, but it was too good of a candle at the ORH to pass up. Because of slippage I ended up with just over 3R. However, looking at the charts right now, I picked the best times to exit. In the end, I would've made more had I held on to my initial position but on a low volume day and a fairly low volume stock I feel good about the choice and result.

MVSN - Short

Fairly interesting day, albeit a bit sluggish. Short MVSN off a break of the 5th bar low after a three bar retrace and a hanging man-like entry bar at the ORH. Exited all my shares on a break of the 2:15 bar high after it spiked above the 5ema. Also got slapped around in SGR and ICOC.

In case you haven't heard the news... Tom C. has started his own blog. Tom was/is a protege of Trader-X and is a certifiable bad ass trader. Be sure to bookmark and check out his site daily.

Fun day

Don't know about you, but I found a lot of candidates out there. All in all, I traded 4 stocks today (and partialed out quite a few times).

PTIE Long: 5/15
ZUMZ Short: 12/15
TGT Short: 15/15
SVVS Short: 7/15

The least favorite was TGT and the one I liked the most, although I didn't capitalize on the last push was SVVS. Entered after two inside bars and a small consolidation right at S3. Took a partial off the 11:30 bar high (almost after I entered) then exited all at the ORL. While the PnL wasn't huge today it felt good to crack the knuckles after not having an active trading day for a while.

Here's the chart:

Better safe than sorry

Only PBG made me think of acting today (12th bar, :15) but I saw potential support at 40.94 off the daily and didn't like the R:R. I don't normally look at the daily for entries, but since the market was up big and I was thinking of shorting, I figured I would be extra careful and look at everything. I would've made some decent cash with the trade but, in the end, I just wasn't that confident in the trade.
On a side note... I've noticed Prophet's scan hasn't worked for me the last two days. Anyone else notice the same?

HOLX - Short

If at first you don't succeed... try another timeframe. Isn't that the saying? I first shorted HOLX off a break of the 11:15 bar low on the :15 chart. Took a partial off a break of the 11:45 bar high then fully closed my position off a break of the 12pm bar high. Ended up with latte cash. Then, I looked at the :30 view and saw another setup and shorted off a break of the 1pm bar low. Exited the entire position at the ORL. I also liked RIG at 11:15 (:15 view) but I didn't like the relative volume at the time. Here's the HOLX :30 chart:

Nuttin'

I can confidently say that at this moment - 1:45pm - there is nothing and will not be anything for me to trade today. Here's my watchlist:

PAY, IVZ, PRKR, ATVI, JAKK, DNA, KBR

Back from Nuremberg

 
I went to Nuremberg not really knowing what to expect as I hadn't had the time to read up on it in Wikipedia. However, upon arrival, I was quickly made aware of how 'advanced' this city was. The airport alone is beautifully designed and I would expect that kind of 'modernization' in a more popular city... such as Munich or Berlin. The taxi we rode in was a Mercedes - of course - and all the taxis over there are painted cream or beige. A great Mercedes feature is built-in booster seats in the back for the kids so that was one less thing to worry about.
 
Our hotel was about a 10-min ride from the airport and it too was beautifully designed and within walking distance of the 'Christkindlemarkt'. Walking through downtown Nuremberg really did feel like I was in that scene from Shrek with the cobblestone roads and Middle Age buildings. Bratwurst was everywhere so I was in heaven although we ended up eating at Pizza Hut two nights in a row (partly to satisfy the kids and partly for me to reminisce on my days in the US when this kind of food was readily available). Despite its 'Middle Age' feel, Nuremberg is actually a very modern city with the latest designers shops and department stores. This really was feeling like the perfect city. Part old world, part new world. I don't really like giving up the conveniences of home but I also crave the culture that Paris and other European cities offer. I think that's why I liked Florence so much... it also had a nice mix of old and new.
 
The Christmas market in Nuremberg made me feel like I was walking inside a snow globe. In the center of the city are all these shops selling every possible kind of Xmas decoration you can think of. They also sell handcrafted toys... you know, like the wooden toys you see in those old claymation Xmas movies. We had heard a few stories of how the German people were cold and rude but frankly, I found that to be further from the truth. Most people we encountered spoke English, were friendly and absolutely didn't mind kids at all. Coming from Paris, it was quite refreshing to see folks who smiled a lot and were outwardly friendly.
 
About the only thing that really bummed me out about Nuremberg is when I returned home and finally did look it up in Wikipedia. Turns out, Nuremberg was pretty much the center of the Nazi propaganda machine with huge rallies and a very prominent anti-semitic mentality. Not good. Not good at all.

4 trades

All losses. Felt like I was on a treadmill today and going nowhere. Fortunately, only SHLD was a full 1R loss... the rest were fairly minimal. Traded the following:

SHLD: Short, 1:30pm bar low
GPRO: Long, 12pm bar high
DLTR: Long, 11:30am bar high
ALD: Short: 12pm bar low

Sometimes, proper trade management will cause me to take a loss. For instance, DLTR and ALD never touched my original stop (opposite side of entry) but I partialed out to limit losses.
Have a good weekend, I'm off to Nurnberg, Germany tomorrow! Kicking the Christmas spirit into high gear for the kids as we're going to a bonafide Christmas market.

Tough

Hard to make a high-probability buck lately. Market's up big, I've got a full watchlist and - up to this point - no candidates are setting up. Sucks since this is my 'full' trading day and I'm out of town on Friday.

APC - Short

Still waiting for a day this week when I'm burning up the keyboard with orders. Thought today was boring as well. I caught APC short but initially I didn't like the lack of unusual volume. I decided not to discard it since volume was on the fringe (between too low and just right). My entry bar was a failed reversal at the ORL with volume. Exited on a break of the 2:45pm bar high (I would normally partial here, but since I shorted a stock on a big 'up' day I didn't want to risk too much profit). Turned out to be the right move as the stock moved up big after I exited.

Nothin' happening

Sticking to my guns and waiting for the trades I want. Didn't happen today. I was stalking ISIL at 11am but decided against. Too bad.

No trades

There were trades to be made out there... but they just didn't meet the specifics that I look for. GA and FNM are two decent examples. I'm expecting very low volume after today so I don't expect to trade till next Monday. If I don't post... enjoy your Thanksgiving. We're actually celebrating it here on Saturday with some American friends.

LVS - Short

For all the IB users out there... were you experiencing any issues with IB's data in the first hour of trading? My backfill was acting funky and I had to clear my charts and backfill again. Pain in the ass considering how long IB's backfill takes. Anyway, I traded LVS and missed the first 'ideal' entry off a break of the 12pm bar low. However, I was able to get in on a break of the 12:30pm bar low which closed below S2 on increased volume. Exited the entire position on a break of the 2pm bar high.

Tradeweek

With my new schedule I really needed to find a trading style that was simple, effective for gappers and could be applied throughout the day. What I ended up focusing on were two and three bar retracements. I find these to be not only easy to spot but also highly effective. Also, I'm also going to concentrate on just the :15 timeframe for a more 'relaxed' (dare I say) trading experience. The retracement trade is pretty simple. I look for 2 or 3 bar retracements (either up or down) with a reversal bar and I enter on a confirmation of the reversal. I also look for potential 'dummy' retracement plays where the reversal bar sets up against the retracement trend but there is no confirmation. I remember Trader-X saying a while back that this is a pattern you should look for if you wanted to reduce candidates or wanted more high probability trades. So, here's a look at some charts this week that fit the above criteria:

Executing all these trades, including partials, would've produced the following stats:
Total trades: 9
Win: 7
Loss: 2
Win rate: 78%
Total R: 14.46

EXPE - Long

EXPE had all the making of a nice long gain yesterday. My entry was right above R4 and the ORH after a failed 2-bar retracement. I call this a dummy retracement setup. A trend looks like it's about to fail (especially at a key resistance/support area) but then the next bar continues in the direction of the trend. I always like entering on the confirmation bar.
So, my entry was off the 11:30 bar high, price quickly moved to $31 and then fell sharply back. I partialed on a break of the 12:15 bar low and ended up selling the rest of my shares on a break of the 1:45 bar low. Up and down stock which used the round number $31 (and 119% fib. level) as strong resistance. Small loss, but a loss nonetheless. Bastard!!!!

JCP - Short

Tried a new exit idea and it cost me. First entry was on a break of the 1pm bar low and I was stopped out two bars later. I waited before placing my stop after entry to see if price would try to shake me out during the next bar. The next bar high was my new stop and it proceeded to bend me over and thank me for playing along. I re-entered on a break of the 2pm bar... price started moving my way and I thought I was just too early in my first entry. Unfortunately, this stock did not want to make a big move down but I was able to get out at BE the second time.

No trades

Not much for me to work with today. Although, I did have a limit order in for VMSI but price blew right past it. Would've been a nice gain.

WMT - Long

The day I make a killing when the market soars will be the first day I make a killing when the market soars. Contrary to big down days, I just can't seem to find nice setups or entries during big up days. I was able to make some money on WMT today off the :15 chart (break of 11am high) and broke even entering again on the 30-min chart (1pm bar). At least I can trade the full day tomorrow.

GG, FXI - Short

Made a couple nice trades using the retracement pattern. I had a fortunate 'mistake' on GG. As soon as I entered I went to place a buy-stop order at the top of my entry candle. Instead, I placed a sell-stop order and doubled my position. That's like the 3rd time that's happened in the last few weeks. After a brief debate about whether I should sell or not... I decided to keep all the shares which turned out well. FXI (:15)

• After a previous failed attempt to break the ORH (resistance), a nice 2-bar retracement pattern set up starting at noon (which was also S1)
• Entered short on a break of the 12:45 bar low
• Looked like price was going to once again test the ORH (S1) but it didn't and broke down
• Exited at S2 which was also near the ORL. I figured this was going to be a reversal area (it retraced again and moved further down)

GG (:15)

• I like retracement setups at either a pivot point or the ORH/L
• After breaking above S3, price moved back down and below S3
• A 3-bar retracement started at noon and broke just above the S3
• Entered short on a break of the 12:45 bar (busy time for me) and kept an eye on how price interacted with S3 again
• I was prepared to get out after 1:15 bar as it looked like it was finding support (remember, I had double my position and a very itchy trigger finger)
• Exited just above S4 which was my target price at entry

AMAT; KNOT

Went long AMAT (12th bar, :15) and was stopped out on a revised stop. Shorted KNOT (5th bar, :15) and made some change down to S3 or $15.76.
Not too exciting from a results standpoint today.

No Prophet

I talked a few weeks ago about how Prophet was raising their prices on the Silver membership from $29.95 to $44.95. Now, the main issue I had was that I used Prophet for my data feed. However, the feed, just like their scans were unreliable at times. Even with that I was still prepared to fork over a lump sum 1-year membership at the $29.95 monthly rate. I needed to do this by 10/31. I waited till 10/31. I called their office on 10/31 and heard a recording that their were off for the holiday. Holiday??? Are they talking about Halloween? I wasn't aware they employed witches and ghosts and needed to respect the 'national' holiday. So, I called on 11/1. Same message. Guess they employ saints too.
I gave up and said fuck it. They have the worst customer service out there. Oh sure, you can get a person online, but they can't figure shit out and always refer to their 'technical' department which doesn't show up till 11am EST since they're based in CA. 11am when the markets open at 9:30??? Nice. For the last week I've been using my IB scan along with the gapper list provided by Jamie or Knight Trader and the IB data feed. I haven't missed Prophet one single bit. IB's backfill takes a lot longer than Prophet, but since I can pull my scans early on... time isn't really that big of an issue.

KNXA - Short

Hello, my name is OONR7... and I'm a chartaholic. I'm always looking at charts and trying to spot new patterns to make my entries easier to spot and, of course, more profitable. My new craze is price retracement. But not just any retracement... specific 2 and 3 bar retracements which leads to a potential entry bar. I've always used retracements in the past, I just haven't specifically sought out the 2 and 3 bar retracements. What I like is that they're pretty easy to spot and very effective. I took my KNXA trade today based on a 2 bar retracement into a shooting star. The entry was pretty far away from the 5ema, but I really like entering on a shooting star for shorts as it provides a very reliable stop area. I was able to grab 1.2 points off of this trade as I exited at $17. Here's the chart:

Other nice retracement opps:
SI (15-min, 2:45 bar)
RATE (30-min, 12pm bar)

CRL - Long

In my last post, I made a reference to taking a perfect trade as opposed to having a perfect trading day. Well, can't say I had a perfect trading day as there were opportunities that I didn't take (FSLR, 30-min, 8th bar just as an example) but CRL, for me, is what I mean by the perfect trade. Not a lot of worries, acted as it should have with a great fill. Here's the chart:

Missed opportunities

Hindsight is 20/20... yeah, yeah, yeah. If a stock is in my watchlist and if that watchlist is not that long and I miss a trade... then I'm doing something wrong and not looking in the right places. Personally, I have distractions to deal with so I can kinda blame it on that, but sometimes I just get downright bored looking for setups and often will close the computer at a certain time. This will probably change when I return to the US as my work day will start and end sooner than it currently does.
Back to the hindsight thing. I'm still waiting for the perfect trading day. Don't get this confused with executing perfect trades. The perfect trading day for me is spotting and capitalizing on every (or most every - I'm not that anal) opportunity that presents itself in my watchlist.
It can and will be done.

EDIT: Guess I should mention SMSI (15-min) and LFC (30-min) were nice missed opps. There was some movement on my watchlist after all :)

Nothing worked

Shorted CPO and went long MVL... neither worked. Pretty boring day overall. There was little movement in a lot of the stocks in my watchlist.
Hope you all did well.

ABK - Short

ABK presented at least two solid entry points today. One early and one late. I was able to catch the early entry but missed the more profitable later one off the 5-min chart.
 

PXLS, ALVR Charts

PLXS, ALVR

Kinda tired so no charts tonight (maybe in the morning). Went long PLXS off the 5-min chart (can you guess where???) and short ALVR off the 15-min (again... take a guess).
I know, I'm a lazy bastard!!!!

T.I.M.

This is pretty cool. I will definitely check out Timothy Sykes' website daily. Like other bloggers out there, I also got an advance copy of his book - An American Hedge Fund. Unlike other bloggers out there... I haven't finished it. But, what I've read has been really, really insightful. If you've ever wondered 'what if I started trading at a young age??' then this is the book for you.

Traded...

without much success. Was it because of the FED announcement??? Who knows.

BWLD - Short (stopped out)
FEIC - Short (scratch)
FIC - Long (little cash)

Let's see what tomorrow brings.

CBG - Short

What caught my eye with CBG was the clear and orderly retracement to the 38.2% fib. level from yesterday's high that ran into the 5ema and printed a spinning top (indicating indecision) on the 6th bar. I entered short on the 7th bar low on a nice down bar and took it down to the ORL.

ODP - Short

I picked up a friend visiting from London today... had a great lunch and was coming home to start trading (while my wife played host). However, I completely forgot that Daylight Saving Time occurred this weekend over here and I would actually start working an hour earlier than normal. So, I was still able to get a decent watchlist together and found a nice opportunity in ODP (5-min):

• Priced gapped down, retraced 100%, then retraced again back to the ORH
• Entered short on a break of the 10:30 candle low after price ran into the 5ema and printed a nice bearish engulfing, marabuzo-ish candle on reduced volume right at the ORH
• Exited all my shares at the ORL

Also traded CMED for a loss (but it went in my favor at first - hate when that happens).

Hindsight trade - LAVA

While LAVA was on my watchlist, I believe I didn't trade it because I had the intraday fib. lines drawn and it was basing below the 50% level. However, when I drew the fib. lines from Thursday's low to Friday's ORH, you'll see price was actually basing at the 38% level. A perfect, low-risk entry presented itself at the 12pm bar on rising volume (a breakout signal). A .06 risk would've easily netted a .49 return if you exited at the ORH.

HITT - Long

Can I just say that I refuse to buy LEGO toys for anyone else's child because I know it's the father that has to put that shit together. Then, when the freakin' pieces start falling apart you have to be there to put it all back together again. Each finger-shredding piece was created by the devil himself.

On to today's trade. I really wanted to short ORCC but I didn't. Shame on me. I did short WMI for a few Cohibas worth and I went long HITT to end this crazy week on a high note. Here's the trade:

• Gap up with price immediately falling down but still within the 15-min OR
• Price proceeded to climb up and past the intraday 38% level then retrace back
• Entered long on a break of the 11:45 bar high which was an inverted hammer off a nice 2 bar retrace (on decreased volume I might add)
• My entry was right below R3 and I figured it would break through easily but I had my eye on it nonetheless
• Exited just above R4 (which was around the intraday fib. ext.)

Trading European exchanges

Anyone know information regarding trading on, say, the London Stock Exchange or other foreign exchanges? I already checked out the commission structure with IB and it's verrrrry pricey (29 euros for 1000 shares for example).
From a timing standpoint... trading the foreign exchanges would help me considerably. However, I'm not even sure if I could use Quotetracker (have an email to them) or what scanner I would use.

Any info you all can provide would be great. Thanks.

FFIV - Short

So, looks like my new 'work schedule' will go something like this:

Monday: Trade up till 11:15 and after 1pm
Tuesday: Trade after 11:15
Wednesday: Trade all day
Thursday: Trade up till 11:15 and after 1pm
Friday: Hoping to trade all day, but possibly after 11:15

My nanny quit on Monday and I've had to scramble to pick my kids from school this week. Then, they start a two week vacation on Monday (gotta love the French and all their time off). Finding a replacement nanny is not something we look forward to so we're trying to work this out.

On to today... but the time I had to leave my computer, I was only in FFIV. Here's the trade:

• Wide range opening bars with subsequent narrowing bars on lower volume
• Price stayed in the lower half of the 15-min OR
• Entered short on a break of the 5th bar low which was an inside NR7
• Had to leave by 11:15 so I placed a buy limit order at 35 along with my usual stop order. Just trying to protect profits while I'm away and capitalize on a move down if I wasn't there
• Everything worked out well and I walked away with a nice gain

Birthday over trading

It was my son's birthday today and a traditional way of celebrating birthdays in Paris is to have the party on a Wednesday afternoon since pre-schoolers only go half day these days. So, we picked a really nice place and invited his class. However, another tradition over here is to just drop your kid(s) off at the party and then come and pick them up when it's over.
Twelve kids, two adults... candy and cake. Needless to say... it was a pretty damn stressful afternoon. But, my son had a blast and that's all that counts!!!
I saw a lot of nice setups today. ASIA and LM in particular had great inside nr7 entries off the 15-min chart.

Hindsight trades

After looking at my watchlist last night, below are some really good opportunities that presented themselves. A very wise man once told me that the 15-min opening range is very important. Somehow... I've strayed a bit from that. I hope to focus more on entries developing within the 15-min opening range. In any case, here are some nice trades that I hope some of you were able to capitalize on:

EVVV: Nice shooting star/inverted hammer right at the intraday 38% level. I really prefer to call this an inverted hammer since a shooting star occurs in an uptrend (3 bars prior is a good example of a textbook shooting star)

MICC: Great marabuzo candle on decreased volume right at the intraday 50% level.

EPAX: NRB on decreased volume just below the ORL and after a WR breakout candle.

Personal issues

Been dealing with some 'issues' that may cause me to miss trading the first couple of hours in the morning a few days a week. I'll still be able to put together a watchlist till about 10am but then won't be back to my computer till 11:15 or so. Bummer, but at least there's afternoon trading which I haven't really looked at. This could end up being a good thing. Not sure if this is a permanent thing yet... we'll see.
As for today... sorry, couldn't trade. If I did, AMZN was a monster. There were 5 NR7 bars in a row leading up to the big jump. There was a nice OONR7 entry on the 1pm bar right at the intraday 38% fib. level on increased volume (which was an entry signal if I ever saw one considering the price contraction of the previous bars).

Late start

Had some stuff to take care of today so I wasn't able to get a watchlist going till about 10:30 or so. I ended up just using the IB scan and really didn't find anything of interest (as of this post).

Typical OPEX day

You never know what you're gonna get on OPEX day. Sometimes you get some nice runs and sometimes you get chopped out. I made some quick money on GRMN (inside bar, 15-min) and then got stopped out of CERN (11:45, 15-min) fairly quickly. That's just how it goes. FWLT and RIO were also nice inside bar candidates.
 
Have a good weekend.

Missed trades

I was looking at an early setup in ABX off the 2nd bar high (15-min) but price dropped quickly during the 3rd bar and I basically ignored the trade. Would've been good for a nice quick gain.
 
With LOGI, I was actually planning on buying on a break of the 10th bar high (15-min), but that never materialized and I pulled my order. However, the next bar was still NR and volume decreased even further and I said I would keep my original buy order in place. But... I went to clear my chart to see if the top tail in the second bar was just a data glitch and when I did that something weird happened with QT. After a couple of minutes, I realized I needed to log on again. By that time, price had already gone past my entry. Would've been good for at least a point.
 
Bottomline: Great plan... poor execution :)
 

PMI - Short ; PTR - Long

Finally... charts worthy enough to post. Feels like ages since I did that. Anyway, the 'new' stuff I've been working on involves inside bars and declining volume. I've been spending a good amount of time going back on my charts to look for inside bar entries and I find them to be very reliable and powerful. Also, tracking the 5, 10 and 15-min charts are too time-consuming and I'm leaning towards eliminating the 5-min chart from the scan list and just concentrating on the 10 and 15 (like I did today). Scanning all my charts every 3 minutes gives me a headache... despite the successes. Plus, if I can find a good move on the 15 or 10 and plot the fib. lines from yesterday's low I should get a nice price target.

Why the change? Well, I just mentioned one reason... trading on the 5-min timeframe is heavy on the brain. I was also ready for a philosophical change regarding volume. After seeing trade after trade on Jamie's site involving low volume plays on inside bars... it became apparent to me that I need to look into it. Finding a narrow-range, low volume inside bar at a key support or resistance area can often act as either a reversal point or a brief consolidation before a further move in the prevailing trend. And the biggest reason for the change is... opportunity. A trader's best friend is finding plenty of opportunities every day. I don't take advantage of every single one - for good or bad - but I'd rather have missed opportunities than limited opportunities.

I'm rambling... let's talk about today's trades. I took PMI short and PTR long.

PTR (15-min)

• Price quickly rose above the ORH then settled down to find support
• Entered on a break of the 8th bar high which was the second of two inside bars on declining volume. Since the spread on this candle was $3 (I usually don't enter candles with that kind of spread but the entry was too good to pass up and I said WTF). I didn't grab a ton of shares but the price target was $6 above at $261 so I could make a nice profit AND keep my risk the same
• Price ended up pegging the fib. ext. a couple bars later which is approximately where I exited

PMI (10-min)

• Used the 15-min ORH for my fib. lines (I will be doing this from now on, just simpler)
  
• Watched price steadily rise on declining volume with upper tails forming near the intraday 50% fib. level (I draw the intraday fib. levels first with all my stocks then adjust once they get close to their ORH or ORL)
• Entered short on a break of the 8th bar low (I actually wanted to enter on a break of the 7th bar low but it didn't materialize. However, the 8th bar was just as nice and also an inside bar)
• Price moved sluggishly downward and until the big one bar drop at 1:20. This bar came very close to the fib. ext. and I should exited near the fib. ext. but missed it. I sold all shares on the next bar at $26.10 on the way up

You name it....

It got chopped. As Eyal mentioned... it was chop city today. I traded WERN, SVU and KEY. Only SVU made me some money.

New stuff

Been trying out some new things and today didn't seem to be a very rewarding day. I was in UNG right below the ORH (10-min chart) but then got stopped out (small risk size). It then proceeded to move up. Also saw a lot of countergap trades. Hope everyone did well.

No trades

Second straight day I was looking at CELG on a break of the 2nd bar and the 2nd straight day I passed. Although today I just didn't feel like there was a big volume surge to warrant my entry. Nothing else gave me a compelling reason to enter. So, while it was boring... I feel like I was fairly wise to stay out. Looking forward to next week.

MDG - Long; RT - Short

By a show of hands, how many of you have been staring at the monitor, waiting for a setup only to be distracted or get tired and move on to something else... but when you get back to that same stock the setup you were originally looking for happened during the exact time you were away from the computer? Nice... I see about 5,000 hands. That happened with WX today (at the 1:15 bar on the 15-min chart). Breathe in.... breathe out.
It's not so bad as I had success with MDG and RT today. Here are the charts:

MDG - typical OONR7 play (haven't seen much of those lately).

• Entry above the 38.2% fib. level (nr7 bar with volume) and right above R2
• Exit at intraday fib. ext

RT - very nice Trader-X trade (finding more of these lately)

• Entry below the ORL, inside bar, inverted hammer on decreased volume. Not as close to the 5ema as I would like, but close enough considering the upper tail
• Exited during 12:50 bar... didn't like how volume dried up with nr bars... felt like a reversal and I didn't want to give up dough

Prophet price increases

Just received a friendly customer service call from Prophet letting me know that their rates will be increasing and if I wanted to 'lock in' to a lower rate than what I'm paying now for 1 or 2 years. I asked what the rate increase would be and he said from $29.95 (my silver membership) to $45 a month.
 
I've actually been thinking of canceling my membership because of a) all the reliability issues with Prophet lately and b) I think I can get my candidates from Briefing.com's gap list (provided by Jamie) and my IB scans.
 
However, I currently use Prophet as my intraday data feed along with my data provider for backfilling. After hanging up the phone, I went over to IQFeed to check in on their data rates. I may be calculating incorrectly, but I think they want to charge $32 a month just for data. Is this correct? I remember signing on with them for a trial run in February and it was only like $10 a month plus $3 for the exchange fees.
 
In any case... if anyone has a good option for a data feed. Please pass along.

Frustrating day

Went long XING (break of 10:10 bar, 10-min chart) and it stalled at the ORH. Then, I went short DSL on a nice NR bar with low volume on the 10-min chart again (12:10 bar low) and I was shaken out a few bars later for a very small loss.
Now, XING... eh, I can understand how it didn't have the engine to get past the ORH on such a down day. But DSL... WTF???? It drops right after my entry and I'm all ready to pop open a Tsing Tao and then it gets all choppy. DSL proceeded to drop to the daily pivot low of 52.81... and I had a sell limit order already in place at 53.10 (you know, I didn't want to be greedy or anything).
This week has made me want to become a scalper. I have left so much on the table after large initial moves after my entry.

No magic trick

Couldn't pull a rabbit out my hat today as I haven't seen any great setups on my watchlist - as of right now.

I did manage to make a decent gain shorting SIGM off the 2nd bar low (15-min) and then selling before the huge upward turn (touched and consolidated at the fib. ext. from yesterday's high).

COGN - Long

The anatomy of 1.08R trade (COGN):

5-min chart

• Entered on a break of the 10am bar high which was an inside nr7 bar with drastically reduced volume (contraction) right at the intraday 38.2% fib. level
• After being up 3R quickly, I ended up partialing out and then getting stopped out for an .8R loss

15-min chart

• This is a trade I wish I didn't make. I tried to get all Trader-X like
• Entered on break of the 10:45 bar high which was an inside nr7 hammer right at the ORH (with fibs. drawn from yesterday's low)
• Exited for a full 1R loss 2 bars later

30-min chart

• Yes, you read correctly, I traded the 30-min chart. I actually studied a lot this weekend and I'm going to start looking at the 30-min chart for inside bar opportunities
• Entered on a break of the 6th bar high after bars 4 and 5 formed inside bars. Bar 6 was also an nr7 with increased volume right at the ORH and very close to the 5ema
• I exited on what is looking like the top of the move (as I write this at 3pm) at 50.35... it was getting late over here and I was happy to take a 2.88R gain

I also traded ABAT which is a more traditional trade for me

• Entered long on a break of the 6th bar high which was an nr7, closed above the 38.2% fib. level and sat on top of R2
• While the entry was pretty, the exit wasn't and after noticing resistance at the ORH in bars 8 and 9 I decided to just exit at the ORH with a gain

No movement

Some pretty boring stuff the last two days. Entered NVDA and made some cash, but there was really no follow through.

No trades

Didn't see anything interesting and decided to go get some Lebanese food in Paris. Had a great dinner with a friend that's in town. Hope to have some better setups tomorrow. There were actually a few times today that I thought my connection was down because price seemed to stall.

I did a stupid thing...

I was long DISH - that's not the stupid part - and I decided to sell all my shares at R2 (that's the stupid part). I should've partialed at R2 and I think greed got the best of me as I entered the trade and 15 minutes later I was up a nice amount (and this is early in the morning). Not wanting to give any early morning profits back, I figured I'd just sell all and if the stock jumped up a bit afterwards... I'd deal with it. Well, it 'jumped' up $4.6 from my exit. If I would've partialed... I'd be up another +9R. This isn't hingsight... partialing is what I should've done. But anyway, here's the trade (a Jaime-inspired trade):

• Everyday, I look at Jamie's watchlist and watch for good opportunities forming at a pivot levels. DISH was a great candidate today
• Entered long off a break of the 2nd bar high (hammer-like) right above R1
• Price took off and my original target was R2 where I ended up selling all my shares and watched (with a tear in my eye) as price skyrocketed upwards
• Pissed I missed the big move, I also shorted this stock off the 11:50 bar low on the 5-min chart and made some additional money which helped
• A big thanks to Jamie for sharing his watchlist.
• I also traded CREE for some change
  

NOK - Short

I made money today and that's all that counts. Did a make a crapload?? No. Took two trades which were both profitable but the end result was only 1R. 1R... doesn't sound like much - and it really isn't - but it's also not -1, -2 or -3R. It's a positive result and that's the bottomline. I try to shoot for average and hope to get a couple of runners during the week. Haven't gotten the runners yet, but they will come. I actually contemplated entering BIDU on the 10-min chart (11:20 bar), but passed because the high/low spread was almost $2. A little too rich for my tastes. I think $1 spread is the maximum amount I'm willing to go and that still needs to be around 1% of the closing price. I traded CAL (Jamie-inspired trade) and NOK. Here's the NOK trade:

• As you can see, price gapped down but then immediately started moving up
• Price hit a brick wall at $37.50 and proceed to sharply decline
• The 10 and 10:05 bar had nice volume on the decline which made me forget about the rise at the open
• The 10:10 bar offered a brief pause in the decline and this is where price should've gone back up if it was going to
• Entered short on a break of the 10:20 bar low with the fib. ext and S1 as the price target
• Price moved down without a problem and I was able to exit at S1 with no problems... pretty smooth

PHM - Long

With PHM, I entered based on my criteria but then exited using Trader-X-style fib. lines from yesterday's low. I do this from time to time if price moves strongly towards my intraday price target and I want to see what the next 'logical' price target may be by using more extended fib. lines. I really wanted to get into this trade for some reason. I liked how it was basing along the intraday 38.2% fib. level. I thought the huge volume spike would cause the price to move down - which it did momentarily - but then it picked up again and I entered on another inverted hammer... fast becoming my favorite type of entry. Also notice how price set up along R2.
 
Entry (15-min):

 
Exit

HAR - Long

What a difference a couple of days make. In hindsight, going 0 for 5 Tuesday was probably a good thing. It helped me re-focus on volume and remind me how important it is to my system. Not saying I won't make mistakes in the future, but I like how I was able to spot a divergence, make changes and see positive results. I traded HAR and ACN today. I was shaken out of ACN (5-min) at the ORH for a gain before it proceeded to jump up and through the ORH and tag the intraday fib. ext. With both HAR and ACN, my entries were made off of inverted hammers. Jamie uses these a lot and it makes sense. It's a bar that demonstrates the bears tried to take over but the bulls were still in charge. So, if the high is broken on the next bar it's kinda like the bulls telling the bears to piss off. Or something like that :)
Here's the HAR trade:

• Nice, strong first bar
• Price retraced down to the 61.8% fib. level (gee, so weird how that always happens :)
• I really wanted to enter off a break of the 10:50 bar high as it was an inside nr7 hammer with low volume, but it wasn't above the 38.2% fib. level so I waited
• Entered long on a break of the 11am bar high (inverted hammer) on increased volume
• Speaking of volume, the spike on the 10:40 bar showed me the bulls were interested and the increased volume on my entry bar basically confirmed it (at least that's how I interpreted it)
• Exited at the beginning of the 1pm bar as I didn't want to risk giving back my gains (a doji formed on the 15-min chart too). If I stayed in the position, my new stop would've been on a break of the 12:50 bar low but I didn't want to risk losing .30 on a hunch... plus, I had to go out and get dinner