V gapped above R2 and rallied. 2nd candle was a retracement on lower volume but was a sharp retracement. 3rd candle found support on day before yesterday's high and looked bullish. It also closed above 50% retracement of the 1st candle. 4th candle also found support there and I entered on the break of 3rd bar high. Price did not move as I had intended and took half off for some loss. Sold the remaining for some profit. Overall BE on this trade.
9 comments:
Hey tradr, I took 3 trades in V today. Bot at 68.5 on the 3rd bar looking for a retracement back up, but the price action wasn't looking good so I bailed at 68.41. Bot back again at 68.46, sold around 68.8 Bot again 68.92 and sold 69.09
In hindsight, V didn't perform that well after the morning pullback, by that I mean the subsequent retracement up was weak and with a lot of back and forth. But if I had traded according to plan, it should've been buy on the break of the 3rd bar high with a stop at the 3rd bar low. You'll notice the 4th bar came close but didn't break the 3rd bar low.
I find that when the pullback from the morning high is too severe, the retracement back up is often difficult. A chart with less than 50% pullback usually provide easier trading.
Hi Thomas~
You said that you entered on a break of the 3rd bar high, but did you enter after the 4th bar completed?
Anarco,
I entered before the 4th bar was completed.
Addict:
You are right. I too have noticed that that shallow retracements perform better. V looked promising initially but after the entry it just did not seem like it will take-off. You did good with the other 2 trades in V.
I wish Trader X was around to comment on this. I think that this setup is his specialty.
Anyway, I like the setup but I would have waited a few more bars just to see the strength of the bulls. The 3rd bar may signal reversal but the body of the 3rd bar does not penetrate the 2nd bar and the 3rd bar wick is kind of short, so it may seem like the bears have more force at that point than the bulls. I like the 4th par as a potential reversal candle because it is a green doji and the upper wick is higher.
Just a few of my candlestick thoughts.
Thomas,
Here is my analysis of the trade. I hope it might help.
I do like the gap up with the strong first candle. That looks very bullish from the start.
However, the second thing I look at is a daily chart that goes back a few months (beginning of May). There was a lot of chop that took place during the first part of May between $65 and $68.70. Then above that there is more resistance recently between $68.70 and $70. That alone would have made me stay out (probably).
The second candle had a monster selloff/retracement and left a long upper tail. The third candle, for me, was not bullish enough. Had it been a green hammer and closed within the second candle it might be ok.
I know Tom C. trades after red candles sometimes, but it just doesn't work very well for me. Trading after red candles may work better when they don't have long upper wicks like V from 7/20. The third candle was red, but more bullish than today's third candle.
I hope you can apply that in some way to your own trading. Good luck tomorrow.
Tyler
FWIW don't like the severe red reversal bar to 6Fib OR. a gradual retracement would work better like Wynn retracing to OR 5Fib and 20 ema 5' chart; 5/30' OR 5Fib hammer. V 5/30' nice short. Ever think of long at the open: break of 1/1' bar?
Anarco, Tyler,
Thanks for the input. Very valuable. Appreciate it.
Have a great weekend!
bl:
I have tried it earlier, not 1/1 but 1/5. I am terrible at those.
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