Oct 17, 2007

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

25 comments:

greytrader said...

Nice trades,

I would not have taken PTR but PMI was a beauty. Just wish it was on my list ! My list was short with Prophet not working before 10:30. Oh well.

Jerry said...

Are you drawing Fib line yesterday hi/low to ORH/ORL for most of your trade now?

Anonymous said...

Nice trades.

"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." - Good stuff, thanks.

I used to trade exclusively using 3 min charts and it was really stressful. I was aways afraid of missing out on a trade. Things were going way too fast.

NoGreedNoFear

QQQBall said...

MTG played out as well as PMI - i would guess RDN reacted bout the same?

OONR7 said...

jerry: yes and no. I start out my day drawing the intraday fib. level according to the 15-min opening range and I no longer have the 38.2 on the screen. Instead, I use the 50% level and see if price retrace above or below it. However, if I see price hovering around the OR high or low, I will just draw my fibs. from yesterday's low/high. And (a lot of ands) once I'm in a trade, I go ahead and move my fibs. from yesterday's high/low ala Trader X. In a lot of ways... I'm going back to Trader-X style.

OONR7 said...

NoGreed: I know exactly what you mean. I like the 5-min charts a lot, but only when I have a real small watchlist. I think that's why I was fairly successful with it during the summer. I need to keep this in mind. Also, with the new 'style' I'm using I can see the declining volume better on the 10 and 15-min charts.

OONR7 said...

thanks GT... who needs Prophet anyway :)

greytrader said...

Your "new" trading style is pretty much the way I have been trading except I still use 15 and 30. If anything, I find there are more days where there are no good setups compare to your old trading with the 5. Trading the 10 might help with that. I had asked Trader X about no trade days and the answer was that he finds something every day. Then again he was only posting 80% of his trades.

On PMI, I notice you draw S1 and S2 on your charts. I added S3 and S4. PMI consolidated right on S3 today.

Go Kernan :-)

QQQBall said...

007,

i dont understand why you adjust the Fibs fron the prior day after you are in the trade.

007, i dont take trades that close above the .618 intraday retrace level - once it passes that level im looking for a trade off of the 100% retrace, gap close or "Trader-X" Bread & butter trade. havent seen that man yof these lately.

John S. said...

I'm confused with adjusting the Fibs as well. . Also, qqqball, don't understand not taking trading above 0.618 level? Normally I thought you would it to come down at touch 0.618 level before going level, and putting a stoploss right below it?

Also, do you guys normally trade on Option Expiration Day? I know some traders like Trade Mike make it a golden rule not to. . I had a crappy day. . Lost $1000 bucks. . I didn't know what revenge trades felt like until today. . Had a couple of those. . Think I will go drink a beer.. Went long on LULU at 49.50 and got stopped out, thought it was going against me.. Duhh. .

John S. said...

Sorry, I meant on the previous post "come down at touch 0.618 level before going "long". . not level..

QQQBall said...

im sorry - i was thinking on a short. if it gaps down and the ORL (i use 30-minute) is set and price bounces up and closes above the 61.8% intraday fib, i wont re-short the stock until it runs UP against some other resistance - preferably a Trader-X Bread & Butter trade.

on a gap up, i wont go long if a stock closes below the .618 fibbo retrace level

realize, im just formulating my trade plan and switching over to doing gap-trades as my primary intent - these otehr guys have alot more experience and i was actually ASKING them if my tenatative rule makes sense.

John S. said...

qqqball, no problem, just had me confused, no I understand what you meant. .

bl said...

NR7. Beautiful PMI chart to short.
Some big cap China stocks on fire at the open min momo: ptr snp ach lfc fxi chl cea hmin. Tomarrow too?

bl said...

edit- with 5 min chart

John S. said...

Yeah, I was looking at ACH today also. Anybody check out NRMX today?? Looks like they want to pin this stock to 5 bucks by Friday.

bl said...

John S,
PMI RDN MTG pass me the subprime WL please, along with the China WL. Yikes. NRMX did it pop up on your scan...$3-10 >5%?

Jamie said...

Nice work!

OONR7 said...

gt: yes, it's very Trader-X like (and GT like) and that's just fine with me. It's where I started and in a sense I may have come full circle with quite possibly a better understanding of his system. The 5-min chart may appear to have more opportunities you have to really pay attention to the chart to figure out which one of those opportunities has the highest probability of success. Meanwhile... a stock that's setting up on the 5 - say in a consolidation area - sets up beautifully on the 10. If you remember Tom C. was using the 10 fairly extensively. The 10 is a more relaxed version of the 5 but with better signal... IMO.
As for S3 and S4... I can't do that in QT. You're on QCharts, right?

OONR7 said...

qqqball: I still like intraday fibs and there are a lot of trades that still give signals off the intraday fib. lines. PMI is a great example. If I didn't have my intraday fibs. setup to show me that the 50% level was offering stiff resistance I may not have entered (probably still would've as the inside bars were too good). The point being... I will start my day setting up my charts with intraday fib. lines and watch to see if stocks retrace to the 50% level. I will adjust my fib lines to the previous day's high or low only when a) price rises or falls to the ORH or ORL and b) I enter a trade.

OONR7 said...

john s: sorry about your loss. Hopefully it was because you traded a lot and not because you didn't have a stop in place. Also, see my previous comment to qqqball regarding why and when I change my fib. lines.

qqqball: very sound reasoning behind the 61.8% logic. In fact, a good example of that is Jamie's ADSK trade yesterday. That's exactly how I approached my trades and utilized the intraday fib lines. However, I'm now zooming in on the 50% level. I've removed the 38 and 61.8 intraday lines and now look for setups above/below or right at the 50% level for entries. Inside bars oftentimes can be explosive so I want to be sure I get in in time.

OONR7 said...

bl: still getting all your setups off of briefing's gap up/down list?

greytrader said...

OO,

I use QT (thanks to you !). You can do S3 and S4, just select "pivot points extra" from your indicator list. Look at S3 on your PMA trade from yesterday. It will be interesting to compare trades now that we are looking for similar setups.

greytrader said...

PMI not PMA :-)

OONR7 said...

ah ha... just added. My first thought is whether R3, R4 and S3, S4 should be treated with less significance than the first two support/resistance levels. I already have enough reasons to stay out of a trade :)
Thanks for the tip.