Aug 20, 2007

MRO - Short

Actually surprised myself today by acting on an inside NR7 trade so quickly. What surprised me more about my MRO trade is that the inside NR7 occurred during an up bar on a potential short position. In the end... it was a very good 'dummy' entry and I'm glad I took it. Here's the trade (10-min):

  • Placed fibs. from second bar low to 5th bar high
  • Noticed an inside NR7 forming during the 10:50 bar right at the 61.8% fib. level. This had all the markings of a trade I'd really regret not taking if I didn't
  • I liked the long upper tails of the 8th and 9th bar
  • Entered short on a break of the 9th bar low
  • Sold all my shares just above the fib. ext.

14 comments:

Jerry said...

Great trade to start the week.

Weird my scanner have 0 for gap down as we have the same configure.

Anyway, many that I missed on countergap, too.

Well, maybe tomorrow.

OONR7 said...

jerry... I only had like 1 or 2 on my prophet scan as well. I suppose MRO came from my IB top % losers list. Don't worry, tomorrow is a brand new day.

greytrader said...

Jerry,

The prophet gap down filter requires that the Open price today be x % less than the previous low for the previous day. Not the low of the previous 15 min bar. In the case of MRO Monday's price action was within range of Friday so no gap according to this definition.

If you want to hit stocks with whitespace from the previous close regardless of the range, use "%chg from Prev. Close is less than -2 %" or whatever % value you want.

Also MRO's virtual volume was not greater than 15% average volume if you have that restriction as OONR7's scan does. So the restriction would have to be removed to see MRO.

On a day like today where there were not many scan results, one has to play with their filters a bit :-)

Closet Daytrader said...

oonr7,

Nice trade! But what about the '1.5x the volume' rule? Are you still following?

Jerry said...

Greytrader, thanks for your tips.

bidmarket said...

00NR7,
nice trading. after you arrive at your gapper list, how do you manage all of the stocks on it. do you filter it down to a small number and then draw your fib lines? do you sort by volume. how many stocks do you look at daily.
thank you
bid

richard said...

Gorgeous trade, very nice. None of mine played out that well today.

Flatwallet said...

Nice

Anonymous said...

they are so sweet when the work like that. the tail above the OR bar high with a close below are good signals to start honing in? i like these set-ups as they are early and stops are clearly defined.

was working all day, so no trading.

QQQBall

OONR7 said...

closet: I will only ignore the 1.25x in the case of inside nr7 bars. In the charts that I've analyzed I've noticed these types of bars are consolidation areas and the moves are usually fairly quick after entry. I am still following the 1.25x volume rule on all other entry bars.

jerry: if you start removing all the filters in my scan, you'll get a very big list. I used to change my scan criteria when X or Tom C. would trade a stock that didn't appear in my list and it literally drove me crazy. I think you trade with IB... so a good way to pick up on movers that haven't gapped is to run the top % gainers and losers list in IB. Then you can export those results into an excel file and then into QT. Also, I've learned that I won't get every stock that's out there.

bidmarket: One thing I do with my prophet scan is only import stocks that have a virtual volume of 700,000 or more. Sometimes, if the list is really long, I'll up that to 1,000,000.
Once I have my list, I do sort by volume and then start eliminating. If price increments on the :15 chart are not .10 or more... gone. Looking at the :15 opening range, if price has hit the fib. ext as I'm putting my list together... gone. Also, if a stock gaps up, then falls below the OR... it's gone as I'm trading in the direction of the gap and for that stock to come back to the area where I like to buy usually means it's exhausted by then.
I haven't really counted, but I usually have a watchlist that contains around 30-40 stocks. I then divide my list into 'stocks that are trading close to my entry area (38.2 and 61.8)' and all the rest. Then I flip through all my charts and add alerts wherever I can so I don't have to constantly look at all of them. Once a stock has hit the fib. ext.... I take it off the list as well. So, my list definitely gets shorter as the day wears on. This feels like a whole post within a post :)

richard: thanks. It's funny, I've been trading for quite some time now but I still get the 'anxious' jitters when I see a nice setup. I nearly fumbled this away but it worked out. I was also in UNG, but my 5-min exit method took me out before the big move down.

OONR7 said...

flatwallet: thank you.

QQQBall: I know what you mean. This was a no brainer trade for me especially considering where the inside nr7 occurred and the fact that the natural stop was above the 50% level and right up against the 5ema. I thought it would definitely hit the OR low... then I wasn't sure what would happen.
And I hate when work got in the way of trading :)

OONR7 said...

I forgot to add that if a stock has not gapped from the previous day's close (whether up or down) then I delete those stocks as well. I like to see even a little gap. Wow, that sounds sick.

bidmarket said...

thank you for your reply. What time do you run your scan and what is "virtual" volume?

Also, I am unclear as to what you are referring to when you say, "if the price increments on the 15m are not .10 or more...gone" I am sure after you explain it, it will make sense.

I really appreciate your time and help. I find your style of trading intriguing but have wondered how you manage your trades.
thank you
bid

OONR7 said...

bid: prophet has a feature called virtual volume. Basically, it tries to estimate what the volume will be, based on it's current pace, by the end of the day. I also run my scans at 9:50am (thanks to Esto). As for price increments... if you look at a :15 chart (2 day view), you'll see the price increments on the left hand side (look at any of my charts on the site). If those price increments are less than .10 on the 15-min chart view... I remove. I have just found that these stocks may not move all the much and I would rather look for stocks that have a better risk to reward ratio.
Of course, this is how I go about doing things. It's a routine I've become very comfortable with but I know that I do remove stocks that end up being profitable in the end. Frankly, I really don't care about those. So long as I have a nice bunch to work with... I'm happy. I haven't changed my scan criteria for quite some time and I'm very happy with my daily watchlist. I personally believe have a good watchlist is just as important has having a good system to work with.
Hope this helps.