Apr 9, 2008

More of the same

While UPS and GTI messed me up... BA saved the day. BA was another 'yummy goodness' trade. I may just have to give my best trades this nickname from now on.
-Strong first bar

-Shallow retrace
-Entry bar closes strong and right above the ORH

-Quick rise to fib. ext (still amazed sometimes at the accuracy of the fib. ext.)

-Exited just short of fib. ext.
Look at the upper tails as price approaches the fib. ext. (lots of weakness/indecision). This culminated with a narrow range, inside bar (12:15) at the top with the lowest volume of the day before turning south. All the signs were there to make a 'cojones' trade but I didn't.


anarco said...

Very nice trade and nice chart! I also like the way the chart looks in the 5min time frame.

OONR7 said...

anarco: thanks, the 5-min looked good as did the 10-min. However, the 15-min gave me the most compelling candle to enter for the way I trade. A lot of upper tails on those faster timeframes.

Anonymous said...

Very nice indeed. Do you find that using the 15min timeframe your stop is a bit wide?

Im guessing your 'cojones' trade would have been to short the NRB on low volume? What significance do you place on a NRB with low volume. Does it mean that steam is running out? Couldn't that mean it is just consolidating before making another breakout?

I was always under the impression that a NRB on very high volume is signaling the end of the move.

Would you mind elaborating on this subject. Thanks!

Anonymous said...

AMAG.. i rest my case.

QQQBall said...

nice chart. beatiful how it PB;ed to Support off of the fib exyension. i may be taking a sababtical from biz to trade FT. we'll see.

OONR7 said...

anon: interesting question regarding wide stops on the 15-min chart. Frankly, the question could pertain to any timeframe, just depends on the entry. So, looking at my entry in yesterday's BA trade my answer would be no - the stop was not too wide. How do I know? Well, I look at the closing price of my entry bar compared to the high low spread. If it's within the 1-1.5% range of the closing price... then it's just fine. I use this criteria for all my entries.
Plus, my entry bar in yesterday's BA trade was perfectly positioned with the low being below the ORH giving price room to pullback and bounce off the ORH if it had to.

For me, I find NR entries very tricky and tend to widen my stop to avoid being stopped out on a quick spike down. It's not an exact science but anticipating a stock's move to resistance or support when setting your stop could make the difference between a losing trade and a winning one.

As for your other question regarding narrow range bars and low volume. The answer to your question depends on where all the action is happening... at least for my tastes. Generally, a narrow range bar that forms on low volume (the bigger the volume difference from the previous bar the better) is a sign of a pending move. Now, where the NR bar forms is what determines the odds of where that pending move will go. If it forms right below or above the ORH, is an inside bar and is touching a rising 5ema... I'm putting my money on an up move. Granted... the previous candles on the chart would have to conform to a good pattern as well.
In the case of BA... there were seven straight up bars in a row starting with the bar prior to my entry and ending with the NR, inside bar with a long upper tail right at the fib. ext. Also, looking at the upper tails forming on the bars as they approach the fib. ext. tells me that price is finding resistance there. The 'cojones' part would be convincing myself to deviate from the norm and short a strong stock with an entry bar that's above the 5ema. However, take at look at the 10-min chart. Notice the big run up to the fib. ext. Then, what do you see forming during the 12:20 candle? Yes, that's a picture-perfect hanging man (but still above the 5ema). If I hadn't have been stopped for losses on my other two trades yesterday... maybe I would've had the cojones to make this one. But, I didn't want to risk the gains I had made already in BA.

trader a said...

nice one oo,
i entered it on the 10min/10th cdl. There was also a fine entry, below the OR, on the 8th cdl: a hammer + volume spike.
AMAG and TX were nice too.

thanks for sharing

p.s. i don't like that nickname. i think it will be better calling it "Classic" trades.

OONR7 said...

anon #2: amag was nice, especially on the 10-min chart (10:40 bar, inside nr7). However, I didn't like the strong first bar.

trader A said...

oh man.. i wrote a comment and it didn't got it.

1. there was also a nice entry (but under the OR) on the 10min\8th cdl - which was a hammer + volume spike.
2. i don't like that nick it sounds sissy, why no "classic" trade? much better!
3.TX AMAG- classic trades

thanks for sharing

OONR7 said...

trader a: not sure you realize but I'm moderating comments now because of asshole anon comments.

Anyway, nice entry on the 10-min, but I didn't like the upper wick. If it was an nr7 I would like it better no matter what the wick is.

As for 'yummy goodness'... come on, it's not like I'm saying gooey goodness or something. Hey, if I spot enough of them I may just narrow it down to abbreviation 'YG' trade!!!!

trader a said...

oh, i thought it was an automatic moderation system which won't accept comments with "shit" and "fuck" words in them.

you mean that tiny wick on the 10th/10min cdl?? i didn't like it either, but there were some strong arguments for an entry:
1- price&volume action, especially the 8th hammer+volume spike
2- "fat" green body, over the OR
3- opposite side of the entry candle (stop) was under the OR

OONR7 said...

yeah... it was a good entry, just not the kind of entry I look for. I also don't like entering on the 3rd up bar ... stuff like that. Again, there's lots of entries I pass on that prove to be very successful but, for me, I need to stick with my rules. Otherwise, it'll be a free for all :)

Anonymous said...

Quick question, did you use the ORH as the entry or did you use the high of the 6th 15min bar?

If you were using the ORH as a stop wouldn't you have been entered on the 4th or 6th 15 min bar?

For your initial stop did you use the low of the 6th 15min bar or the low of the entry bar (7th 15 min bar)?


OONR7 said...

anon: I used the entry bar that has an arrow pointing to it in the chart. Entered on a break of the 7th bar high and placed my stop 2 cents below this bar as well.