Jan 7, 2008


There was good and bad today. First, the good: EVVV set up nicely on the :30 chart. I entered short on a break of the 8th bar low after a pretty weak move to the upside on bars 6 and 7. I got a nice fill and exited all my shares during the 3pm bar.

Now the bad. HWAY first showed up on my radar after printing a very nice reversal bar during the 5th bar (:15 chart). However, the high of that bar was never taken out and my order wasn't triggered. So, I waited a bit and thought I saw a good opportunity on a break of the 12pm bar high (inside bar after a failed reversal). But, it wasn't meant to be and I was stopped out and suffered some bad slippage. I think I'm going to start waiting for the close of my trigger bar to be equal above or near the close of the previous bar (at least for failed reversal plays). I should not that after my initial order wasn't triggered, I noticed the next bar (6th) was an inside, NR bar. Price actually blew past my stop-limit order and I decided to cancel as I didn't want to catch it on the way down.


Tom T. said...

00nr7 - end of last week I was skimming through Nison's book on Japanese Candlestick Charts and somewhere in there he says that his chart pattern rules are not valid for intraday chart treading unless you use at a minimum a 30 minute time frame. Now I looked at Hway on a 30 minute basis and it did not look good (disclaimer: I hardly ever look at 30 minute timeframes myself but I just thougt it was interesting how you successfully traded based on a 30 minute chart (EVVV) but had misfortune with a 15 minute chart). Maybe Nison is correct. However, we are all used to 15 minute trades - maybe the lesson is we should not place too much emphasis on any particular candlestick.

Second point - I have been reading lots of charts and I notice that with gap ups, if the 2nd or 3rd bar on a 15 minute chart pierces the opening candle's high without the 5ema as support, you will likely see a setup that fails to break the OR high. I assume you were looking to just profit from your entry point to the OR high.

On 1/3 I shorted VRTX at Bar 3 using this theory of a failed gap up type setup.

OONR7 said...

tom t: great points. Probably the best point you made is not placing too much emphasis on any particular candlestick. I used to do that... and my success rate was not good. I now try to combine both patterns and candlesticks, but mostly patterns. Regarding the different timeframes... you just need to find what you're comfortable with. Most of my opportunities come on the :15 but I also have the :30 chart up right next to it. Trading the :30 takes more patience and belief in your entry... especially if you're using the 5ema as a potential exit area.
And yes, I was looking at the ORH as my target price with HWAY (which was eventually hit - I might add).