Jun 14, 2007

ADSK - Short

Flatwallet asked me yesterday if I only trade hammers... and this was a portion of my reply:

"...if I see a hanging man after a long run up at a key resistance area, I will short the low of the hanging man..."

A great opportunity came up today to do just that in ADSK. Here's the trade:

  • Placed fib. levels from first bar high to the third bar low
  • Price initially gapped down then quickly started climbing towards the HOD (possible resistance)
  • The 10:15 candle formed an inverted hammer with a long upper tail. A sign of a possible reversal
  • The next candle was a hanging man with slightly increased volume and I shorted the stock on a break of this low
  • Exited at the fib. ext after the increased volume at the OR low failed to generate a reversal (I did not manage this exit well)

I didn't like my exit as it never met the Trader X criteria. I should've waited to see if price took out the high of the 11:30 candle. I basically left .62 on the table. Nevertheless, I'm happy with the trade and anytime you can get out near the fib. ext. for a profit is a good thing.


bl said...

n7, nice move. Also go back 6 days 30" and put some longer term fibs//spt/rst. 5" 13 ema worked well as reversal 10:15 hangman/1pm reversal. Guess you could take a partial at $1, or 1.38@45, or 13/15" hammer. Clean!

Jamie said...

Big Cojones on the entry ;)

OONR7 said...

bl... I love how I have to read your comments twice. lol

jamie... thanks. It's not my typical kind of trade, but I was looking to go short on this stock and didn't want to pass up what I thought was a very good entry on two weak candles at the OR. I was prepared to bolt immediately.

bl said...

nr7, I know...you're not the only one. I do the same with my comments. Gotta love it! Check out Jaime.