[JEHs]

Here is a trade I happen to be in that fits, (sort of) with this type of thinking.
That highest high candle and the one after that was a 2B signal. One could get short right there as price breaks the low of that HH candle, but I waited till the next failed HH candle, which ended up being a bearish reversal bar.
I watched the market that following morning and when price started out above the low of the RB, I hit transmit on my orders and walked away.

The tricky part is now where to go with the stop. I took first profits as it neared the last low and got stop to BE as quick as possible after that, but now, things are looking real good and I hate to give any back, but I want to be there if things develop into an extended run. If I had enough, I would buy some more back now, but I only traded 200 and the first 100 was first profit, and, apparently IB wont work with odd lots on SMH, so here I am.

Now we have an RB on the bottom side, so, I should be thinking of just getting out, but we have taken out a few lows and a fairly significant one a couple days ago, so I will move my stop over that last 2 bar DT and hope for the best. That's just a hair more than 50% of my potential profits gone if I get hit, but ya gotta give it some chance, (at least that is what my plan tells me).

JH

I came back and added a weekly chart for SMH. Everything works the same on the weeklys, a chart is a chart after all...

And then a couple other charts I am watching.

[Dinerotrader]

Originally Posted by brownsfan019 »

Keep in mind my version of bullish or bearish may not be exactly what you've read in books, but basically I want to see some bullish activity to get long and bearish to get short. If it doesn't match a shape on a book or website, I could care less.

I'm intrigued. I have watched Nison's candle stuff and read some books. What formations do you consider bullish/bearish that aren't what you would call the "regular" formations? I would think the whole point of books and formations is to pick out anything that would hint at bullish/bearish activity so it can be identified. Maybe you just mean you interpret the actual candles more liberally than the books do. Give me an example if possible.
Thanks.

[brownsfan019]

Originally Posted by Dinerotrader »

I'm intrigued. I have watched Nison's candle stuff and read some books. What formations do you consider bullish/bearish that aren't what you would call the "regular" formations? I would think the whole point of books and formations is to pick out anything that would hint at bullish/bearish activity so it can be identified. Maybe you just mean you interpret the actual candles more liberally than the books do. Give me an example if possible.
Thanks.

There's an example of F - that may not fit the definition of a perfect bearish signal, but it works for me.

So we could be short @ 7.34 and I want to see how it reacts from 7.00-6.81.

This isn't the best looking pattern to enter on, so if r/r reward impacts the decision making process, this one could be skipped over.

Initial trade r/r
Risk: .51 (7.85-7.34)
Reward: .34-.53

So not the greatest trade in the world b/c we are looking at 1:1 at best initially. My idea for exiting trades was just trail behind the daily candles and let the market take it out.

Day 2 trade r/r
Risk: .34 (7.68-7.34) -- stop placed 1 tick above high
Reward: .34-.53

Now that r/r is a little better. So if we find that trade usually move in our favor even just a bit, then we can improve the risk part of the trade.

Day 3 trade r/r
Risk: .10 (7.44-7.34) assuming the HOD has been put in as day 3 is today.
Reward: .34-.53

Now the trade is providing at least 3x our risk and that is attractive.

So even though an ugly entry candle, as long as price moves in our favor the next couple days after entering the trade, we can decrease the risk and keep the same profit goal. That's one advantage of using the daily charts as those highs and lows are important.

[JEHs]

Potentially a failed HH now, but I'm not sure if i'm too excited about this one here...

[brownsfan019]

I will see about getting back to this over the weekend. I had to close my firefox and when I brought it back up, all my stuff on freestockcharts was gone - annotations, circles, etc. I'm not sure if that's b/c I did a ctl+alt+del shut down of it or if it doesn't save that stuff after you close firefox... I hope it's b/c I did an abrupt shutdown otherwise that won't work.

[JEHs]

Originally Posted by brownsfan019 »

I will see about getting back to this over the weekend. I had to close my firefox and when I brought it back up, all my stuff on freestockcharts was gone - annotations, circles, etc. I'm not sure if that's b/c I did a ctl+alt+del shut down of it or if it doesn't save that stuff after you close firefox... I hope it's b/c I did an abrupt shutdown otherwise that won't work.

I have an older version of Amibroker that I have had for years. All I do with it now is update the stocks and ETFs that I watch using Yaho data, it is free. Works real good for marking up EOD charts. I don't know if I would go out and buy AB now with all the free sites out there, but I like it for what I do and then everything is on my machine..
anyway, just a FWIW.

[thalestrader]

Originally Posted by brownsfan019 »

AAPL JUN09-JUL09




I wanted to try out a stock and found AAPL. I'm not sure how smooth this will work on daily charts with stocks due to the gaps. This particular timeframe on AAPL provided 3 trades - 2 winners, 1 loser.

Hi Brownie,

I like your idea for this thread.

One comment, if I may: The loss you mention appears to be a short trade. I would suggest that you do not trade the H/L in isolation from S/R. I attached a chart with some notes explaining what I mean (sorry for the font - I do not like Telechart's drawing tools, and so I used MSPaint. My daughters use Paint all the time. I have no idea how to change the font. I'm thinking that the last time they used Paint it was for some Halloween project.

Best Wishes,

Thales

[JEHs]

A couple more charts I'm watching...(FWIW)