AMZN PnF Trade 5/11

Posted on May 11th, 2007
Written by Richard
Posted in: N/A (old archives)

Here’s yet another one that got away. I really have no excuse, since my hand was on the “Buy” button… I just wimped out. I saw a kind of double-bottom form at 60.50ish, and the trade rate picked up really well at 61.00. I should have bought, there’s really no two ways about it.

The chart:

AMZN PnF Trade

Geez, I’m still shaking my head… why didn’t I just go ahead and press the button? Oh well…

A conservative target would be the size of the consolidation area (think of it as a box play)… so 61.40. A more aggressive target would be the top of yesterdays move at 61.60. The conservative target was hit when I took this screenshot. The more aggressive one was almost hit, but no cigar (61.59). I would have definitely sold before then!

I’m still very impressed by how easy one can spot trades on these PnF charts. I’m a little disappointed in how scared I am to pull the trigger. Maybe next week! I’m taking the rest of the day off, because I was really annoyed by the weird lack of quotes at the open. Lots of people noticed this problem, so I know it wasn’t just my setup here.

Comments

  • TraderD
    It usually is iffy to trade the first morning move, unless it has alot of power to it. It got into conjestion, and then the break happened at 7:55. The move was down, flat and then up.

    The day before the move was down, flat, and then down. Waiting for the conjestion break out will usually be a better entry.

    I find checking the pressure indicator (in Quotetracker) always helps to give a sense of the commitment to the move. It seems that 7:30 wiggle always happens. I want it greater than 100% (pressure).

    Another way is to wait one five minute bar, and then put an entry that is towards your position, so that the market has to move your way. I would have wanted the 5 minute bar at 7:20 to be below the bar at 7:15. The HMA was negative, but the SMI was oversold. The direction at that point seemed unresolved. In the next few bars the SMI started to turn up, and the Histogram pointed to a direction change. Then the HMA went positive.

    I got caught the wrong way on FSLR around the same time, so what do I know? I got stopped out quick and survived a $2 move against me, and it only costs me .22 cents. :0

    - TraderD
  • @TraderD, yeah, I intended to trade small at first. I was still too scared! I think I'm a little less cavalier than most traders about trying new strategies. I hate losing money!
  • @Jamie: yes, in fact I watched the break and "paper" traded all the ones I've posted here this week. I could have caught any of them, if I had been braver! AMZN was great because I wanted 61. Some of the others, I'd have to enter before the "outside" box filled to make the kind of play I'm used to. But that's just a matter of reading the T&S and making an educated guess about whether the breakout has any legs.

    I've noticed, many times, you can wait for the box to fill, and then buy it somewhere between the breakout point and the top of the box (since most stocks will drop just a little after the initial thrust, before continuing). So that's another option.
  • I was watching the identical same chart, and I went short the break of $60.70 and got stopped out at your entry signal. Bad luck or bad skills?

    I guess I shouldn't trade the first pass through a pivot point, but how do you tell when it's really going to go? AMZN spent an hour swinging back and forth across the pivot. There were plenty of false entries.
  • Hey Richard,

    You've got a good thing going with these P&F charts. I'm just wondering how timely they are. Do the boxes fill up and give you enough time to make a decision?

    I traded AMZN today. My sytem is a little different - I'm using pivot points and reversal candles to time entries and exits.
  • TraderD
    I don't know why we get stuck, but we do. These PnF charts seem to be working for you. I would guess your confidence in them will grow. Trade small positions - that helps me what I am trying something new.

    I track average profit per trade, and use that as a way to get me going. (You have to trade at least x number of trades a day then to make your targets). That said, I'm up this morning and now I am playing defense rather than looking for more entries. We are going sideways though so that might be it too.

    - TraderD
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