Rise or Fall - Revealed

I was happy to bring back the Rise or Fall feature and forgot how useful it is for me. Thanks to all for the comments and insight... really good stuff. Probably the most interesting thing for me is how my thought process was very similar to those who commented. Hopefully it's a sign of maturity on my part. On to the reveal...

Stock: GENZ (5/15/09)

Timeframe: 10-min

Trade: Short

Result: Win (but most likely on half my shares)

Analysis: I didn't take GENZ because it actually wasn't on my watchlist. It didn't gap at least 1.5% but, with a little push from TraderAM's EXC trade, I hope to catch some of these smaller gap plays.

For me, the right decision to make - based on the info on the chart - is to go short. No brainer. And here's why:

-bar three was a doji which indicates indecision. This is bearish especially in a gap down stock right below the PDL. 

-entry bar (4th) closed weak below the 23.6% fib. retracement level from yesterday's high to the :30 ORL.

-entry bar also closed very weak below S1 and the 5ema also acted as strong resistance.

-entry bar was NR3, inside bar with a .21 risk from its high to low. The ORL was .33 away so 1R was achievable with a potential 5R reward if it ran to the fib. ext. That looks good to me.

-As King Jamie mentioned in the comments, price did find support at the $59 (ORL) level and bounced back up. Price then pulled back close to the entry area and, if I had taken the trade, I probably would've been out 1/2 my shares at BE (since price hit my 1R level).

-Price could not sufficiently penetrate above the 5ema and fell all the way down to the fib. level. 

While there is risk in entering above the ORL, this setup really is my 'bread and butter' play as of late. A couple of these every day and I can spend more time in the French Riviera :)

Rise or Fall - Revealed

Stock: ISRG Day: January 10th Outcome: If you said yes to shorting this stock on a break of the 4th bar low you would've enjoyed a more than 4R profit as it ended up touching the fib. ext. I did not enter as the entry bar was a bit wide. I was looking for a more narrow entry but price just took off. Maybe BL could've gotten in on a break of the the 2pm bar low to coincide with his 2:22pm theory.

Rise or Fall revealed

I like to think of my daytrading system/style as a work of art. It's never really 'finished' and there's always room for improvement. With this being said... I have really enjoyed adding intraday pivot points to my charts recently as they're another good sign of support and resistance. I pretty much use the 38.2 and 61.8% levels as support and resistance and now when I see a pivot point forming in these areas I pay special attention. So, bottomline... you'll be seeing pivot point lines in my charts from now on. That brings me this week's Rise or Fall trade (or non-trade). I came across NXY in my weekly review and thought to myself "Why the f*%$ did I not enter this trade????". I might've been in other trades at the time and managing those, but this was a gem that slipped by (because it was in my watchlist that day). So on the chart I posted I intentionally didn't add the pivot point lines so you can see that - once added - it can really change how I interpret a potential trade.
 
Okay... the trade:

• On the 10-min chart below you'll notice price closed right on the S1 line
• The entry bar was also an inside, NRB with a volume spike from the previous bar. This tells me that this is a potential breakout area
• Entry bar was also smack up against the 5ema and, frankly, this was either going to shoot up or down
• I also really like when the pivot line is very close to my normal entry area (in this case, the 61.8% fib. level)
• Price dropped very quickly after the entry bar and the primary target price was the fib. ext (with an eye on S2)
• I probably would've taken a partial on a break of the hammer that formed at the 11:50 bar and would have definitely been out once price tagged S2

 
To add pivot point lines in Quotetracker, just right click on the chart, click on 'Select indicator' and then scroll down the top left menu bar till you get to Pivot Points and add.

Rise or Fall - Revealed

Two words: Damn, Jamie!

Stock: RDC
Entry: Entered short on break of 10:15 candle low
Rationale: As many of you noted, I would have preferred a more narrow entry bar, but the high/low spread was still around 1% of the closing price and that's narrow enough for me. Just like my SAFM trade earlier in the week, I was looking at price to stall, reverse or consolidate at the ORL. It did consolidate before moving down. I exited on a break of the 10:40 candle high (fib. ext.) as it looked like a tweezer bottom pattern. This trade is a great example of the trades I don't want to get away. Part of my goal of increasing the % of trades I enter that match my criteria. Sure, the r:r was not huge, but frankly, I'm ok with around 1R or slightly more return. I figure it like this... if I only enter 1 trade per day and that trade brings me 1R each time, that's 5R per week. Remember, my goal per week is 6.3R. Typically, I can find 2-3 good OONR7-type of trades per day.
I'm not trying to swing for the fences in my trades anymore, I want to enter as many valid trades that present themselves to me and - by doing that - I know I will exceed my weekly goal.

Here's the full view of the chart:

Rise or Fall - Revealed

Stock: KFN
Bottomline: KFN was a great countergap trade candidate and if you were thinking short at this point, you'd be correct. Did I enter: No, I decided early last month that I would stick to trading the direction of the gap for the summer.

What I liked:

• After gapping up, price proceeded to drop below the 50% fib. level
• The 10:10 bar is of particular interest as it closed below the 61.8% fib. level, was an offsetting bar and - most importantly - was an inside NR7 bar. I mentioned in this post that I will be actively looking for inside NR7 bars at the 61.8% and 38.2% levels

It's important to note that the low of my entry bar was not broken on the next bar which would have also prevented me from entering. I'm still debating whether this rule should be broken during consolidation periods. Meaning, if I see an inside NR7 at a key area... maybe I will wait to enter when the high/low is broken and not solely on the action of the following bar. I'm not a big fan of breaking rules when it comes to my system.

Rise or Fall - Revealed

The symbol for this week's Rise or Fall was AMP. And if you decided to go long on a break of the hammer high, you probably would've made some money if you got out in time. At worst, you probably would've broke even. In all honesty, I didn't even consider trading this stock but it did stick out because of the perfect hammer that formed on increased volume. But, as X has stated in the past, not every hammer is the same. In the past (about a year ago) I probably would consider this a very good time to enter, but with the way I'm trading now, I would not have entered for two very big reasons:

• Potential entry bar did not close above the 38% fib. level
• Bar prior to potential entry bar (PEB) was a down bar and the PEB was not convincing enough for me to take a position.

Closet daytrader noted in the comments that I did not draw my fibs. to the high of the day. He/she was right. If I had... I wouldn't have even considered the trade at the time as it would've been well below the 38% level.

Rise or Fall - Revealed

Well, what do you know... I screwed up on a post again. The intraday chart for the last Rise or Fall was actually a 10-min chart... not a 5. Hopefully you all realized it (doesn't change anything but it does reinforce the fact that I'm a horrible editor).
 
Stock: LFC
Entry: Decided to stay put
Rationale: I was actually looking for an entry on the 10:50 bar but volume was not at least 1.25x the previous bar. After this, price proceeded to shoot up and almost touch the fib. ext. during the 11:20 bar before crashing back down during the same bar. So, then came the 12pm bar with serious volume behind it and I was stumped. Should I... or shouldn't I??? I didn't because of the price action on the 11:20 bar. That said a couple things to me: 1) the move might be over and 2) probable target if it did rise was the OR high which was only a .15 gain. So, I didn't see the risk:reward being in my favor especially during last week's crappy market.
But, as you can see... price did rally pretty significantly after 12pm (except for that scary hanging man) and would have produced a nice gain. However, I wasn't hitting myself over the head as I think I made a good decision on what would have been a risky trade (IMO) to begin with.
 
Here's the full view of the chart: 

Rise or Fall - Revealed

Let me apologize for all the formatting changes in last Rise or Fall post. Since this is a customized blogger template, I needed to do things a little differently so everything appears cool in Firefox and IE. That became painfully evident this weekend. In any case, it shouldn't be a problem from here on out.
As for this week's Rise or Fall... here's the trade:
 
Stock: TASR
Entry: Long on break of 10:25 candle
Exit: Ended up selling all shares at the fib. ext at the 11:10 candle. I didn't sell when it first hit the fib. ext as the chart really didn't warrant an exit at the time
Net result: Close to 1.6R
Rationale: Price gapped up and showed a fairly strong first bar on the :15 timeframe so I was looking for a long entry on this one from the get go. Price proceeded to drop below the 61.8 level (bearish sign) but didn't drop too far and quickly regained upward momentum with a very bullish 10:15 candle (5-min chart). My entry bar was very strong on increased volume (higher than the previous 4 candles) and above the 38% fib. level. The entry bar did have a little upper tail, but nothing too scary. I was concerned about the volume spike during the 10:40 candle as it cleared the OR high and was looking to see if a bearish candle formed immediately afterward... which did, but the next candle never took out its low.
 
Here's the full view of the chart:
 

Rise or Fall - Revealed

First... thanks to everyone for commenting on the first installment of Rise or Fall. Honestly, I got a helluva lot out of it being that I did make the trade. Reading the comments, I think most of you wouldn't have entered short where I did, which is probably a good thing. So, here's the trade:

Stock: NKE
Entry: Short on break of 10:35 candle
Exit: Scaled out during 11:45 candle
Net result: Made a few bucks
Rationale: I liked how price was bearishly interacting with the 50% level. Plus, this was close to the daily support of 52.50 and price also broke below the daily 50ema. So, I wanted to 'jump the gun', if you will, and short right below daily support at 52.49 which I did. However, this was a risky trade as my entry bar was above the 5ema and price had already made a significant move down earlier in the day. I knew the risk and was ready to bail in order to limit my losses. Initial price target was the OR low or the low of the 3rd bar. If I hadn't scaled out I could've squeezed about .30 out of this before truly exiting after seeing the long lower tails in the 12 and 12:05 candles.

In hindsight... this wouldn't have been my first trade of the day, that's for sure and because of the risk, I only entered with 1/2 my normal position size. The stock did end up making an upward move but I still don't think you all would've entered as I didn't see any compelling entries on most timeframes.

Daily chart
















Intraday chart - full view