May 23, 2008

BABY - Long

Have to say... I'm really thinking about exclusively trading off the 5-min chart. Even when I started trading this timeframe last year, I felt like I could see patterns and price action much more clearly than on the 15. Also, my entries tend to more narrow meaning less risk for me. Today I traded BABY and CHL... both were profitable but BABY is a prettier chart. Entered off a break of the 10:40 bar high which was a hammer-like candle right above the ORH (I used the :15 ORH in this case). I'm also thinking that from now on I may just use the :15 ORH exclusively to base my entries on... just makes things simplier. Exited all shares just below the fib. ext.


Anonymous said...

i use IB scan. Didnot find Baby in it. Most stocks sucked today for me.

PDT said...

Good trade on BABY. I took the same trade only I traded off the 15min chart 10:30 bar. It was a double inside NR7 right above the ORH.

Only problem was I used the low of the prior bar instead of the NR7 bar. Where did you put your initial stop, and what factors do you consider before placing it?

I like your exit better. I 1/2 partialed out at the fib ext and moved my stop up to the low of 11.15 candle and I got stopped out the next bar.

Do you generally exit fully at the fib extension or was there some other catalyst to that decision?

OONR7 said...

pdt: nice going. As for your stop... it's never 'unwise' to give yourself a wider stop just to be sure. However, with a long lower tail combined with the fact that it was an inside nr7 right at the ORH on drastically reduced volume... this stock was either going way up or way down. With all these positive reasons for entry... my belief is to take the lower risk stop of .09.

As for exiting... well, PDT, that's the million dollar question. I still do not have an exit strategy that I am completely satisfied with. However, I typically always exit my shares at the fib. ext. Unless I'm up a bunch from other trades then maybe I let it fly but my experience has been that exiting at the fib. ext. usually results in comparable profits than partialing and waiting to see if the stocks moves even more. Personally, I'm very happy if a stock hits the fib. ext and have absolutely no regrets whatsoever... no matter what happens afterwards. Hitting the fib. ext is like the perfect trade in my book. Screwing it up trying to get more money at the expense of increased stress just isn't worth it for me.
BTW... I always exit just below the fib. ext (longs) or above it (short). I've noticed price will spike to the fib. ext. and I want to be sure my order is filled before a big move against me.

PDT said...

Nice points. Noted!

"Screwing it up trying to get more money at the expense of increased stress just isn't worth it for me." - So so true.

Have a good holiday.