This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com

After grinding large numbers of R’s away by scalping, I decided to take a fresh look at things. I committed myself back to the 15′ timeframe, with the philosophy that if I can’t make money there, where things are slower and more steady, then I can’t make it scalping which is immensely harder. I’m strongest in the dummy method, incorporating some of Trader-X and Jamie’s methods as well, so that’s the system I’m trading. I got off of that when the markets were not disposed kindly to these setups back in September. Rather than changing my style back then, I should have just stopped trading until conditions were right for my style.

I also changed my mindset about my financial position. Rather than thinking that I’m way “in the hole” and need a big home run to get me back, I decided to start fresh, using my current balance as my new equity position. Now I can concentrate on trading well and avoiding risk, and let the trades come to me. 90% of trading is half mental.

It worked today! Skyb0x on Wallstreak suggested that I watch the Solars today, as they were gapping up. It was a perfect call. I watched several names, looking for a dummy setup either on a pullback or near an OR extreme. I decided to go long LDK after a retrace to the 5-ema on declining volume, when we were printing a green candle, were above the 38% fib retrace and were back above the OR low again :

It was a risky entry in the sense that I front-ran the candle being completed, but I thought the risk was worth the reward, as the 138% fib extension was near $62, and the volume was projected to finish the candle on an uptick. Here’s the outcome of the trade:

We slowly ground up for a while, and when I was up 1R, I raised the stop to breakeven. Once we hit the OR high, I was tempted to sell, but I held on because the retraces were orderly and we didn’t close a candle below the 5-ema. The inverted hammer at 14:00 made me think the end was near, but we kept going. I was watching this daily chart for potential pivot points as Jamie has often preached:

Once we cleared the OR high, I saw that $57.57 was a strong pivot. I sold half at limit at $57.50, and ended up almost top-ticking the sell. Nice! LDK then rallied more, and I decided that $60 was probably going to be a round number resistance and that $62 was not likely today. Once we got there, the action was so strong that I decided to hang on. Whoops! You can see that we had three wide range bars up to the $60 level, and it would have been smart to sell there. Still, I raised my stop to the base of that last WRB, and ended up getting stopped out just under $58 for a total of +2.77R on the trade.

Since I’ve decided that I should take fewer trades and really focus on them more, I wrote the above post and I’m reinstating my trade grade:

Trade Summary:

LDK Long
Entry: $52.50, Stop: $51.31, Target: $62.28
Partial: $57.50, Exit: $57.85, P/L: 2.77R

Trade Grade:

This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com

This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com

Here’s some charts of a great short trade Wallstreak user MarketMonk made in PTR:

Daily:

5-min:

He pulled in 8 points there! Nice work.

I got back from my work travel, and I have taken 7 trades in the last two days–6 losses and one (small) win. I continue to trade wrong, be on the wrong side of the market, enter and stop at the wrong places. I’ve failed at following my 7 step plan, since I’m just trading anyway and not working it anymore. On top of it all, changes are happening at my job, and not for the better. This is a pretty low time for me, but don’t try to catch a falling knife–it can always go lower…

I’m going to start to follow my seven step plan again. No trades until I get to that step in the plan. That’s where I’ve gone wrong here.

This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com

This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com

I took 7 trades today: 2 wins for +7.1R, 4 losses for -4.4R, and one scratch. The only reason I came out ahead today was a setup called out by Ragin Cajun for ISRG on Wallstreak (his blog is here, go check it out).

He noted that ISRG should explode today. I looked at the daily, and I thought that the base looked good:

Yesterday there was a single tick that traded at 237-ish that might have been bogus (TD’s datafeed blows). So I watched it. ISRG sold off big at the open, all the way back down to 233, where it spent most of yesterday. I set an alert for 234 and went on to other things. I lost -2R trying to scalp BIDU and got +1R back from it, and decided to leave it alone. My alert went off, so I entered from this 5-min chart, with a stop 1 point away at 233:

ISRG went to the moon! When we were at 238, near the pre-market high, and we stalled, I sold half. When we blew up to 243, and began to retrace I sold 1/4. There were two big wide range bars on the 15 min, so I thought that would be the end, but I wanted to keep 1/4 of the position on as a swing. At about 2:00 ET, the markets began to sell off, so I moved up my stop and sold the rest at 240.51, for a total of +6.2R on the trade. Thanks for the setup, Ragin!

I went on to lose another -1R and scratch in CSUN and JRJC, trying to chase China names. Sloppy!

My final trade was in LDK, a solar stock that Wallstreakers have traded in the past. Apparently, their CFO left or something. I don’t see the news out there yet, but some on Wallstreak said that was it. In any case, they were running for the exits! Look at the carnage on the daily:

I immediately thought SS parabolic long. I watched this 1-min chart, and as downward momentum diverged and we broke a green hammer, I went long with a 1 point stop:

I held on too long, but I stuck with my original stop at least and only lost -1R. I shouldn’t have stuck around more than that first red candle. A parabolic trade should launch back up. When it failed twice, I should have bailed at my entry. Despite my mistake, I think it was a good play, but we just got another wave of selling in. Stuff like that happens! I’m more upset about my gunslinger trades in BIDU and the China names from the afternoon. Skyb0x from Wallstreak actually went short in LDK about the time I was stopping out. Here’s his notes on his trade, and a chart that I annotated:

Wild day out there. I traded more than I intended to!

EDIT: Here’s a tick chart of the day’s action in LDK. Notice that the first decline of the day was met with much more volume on upticks than downticks. I was really surprised that the volume wasn’t more unbalanced on the big drop at the end of the day. What does this mean, if it means anything at all? Still thinking. Comment if you have any ideas:

This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com

This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com

I traded live today, but with only 0.5% position size rather than my usual 1% risk. I decided to trade 1 time, and if it was a loss, I was done. The first two broke even, so I kept going (just one more). I took only three trades, two for very slight profits and one for +1.56R, for a total of +1.68R for the day. This puts me back above the initial funding level of my account, which is important to me, psychologically. Big day for me. :)

Anyway, here’s the trades:

Gold Fields Limited (ADR) (NYSE: GFI) Short, 5′

I traded this on the 5 minute chart. I applied fibs as inspired by 00NR7. I’m not really trading his system, I’m feeling out one of my own, but I am borrowing from his excellent ideas (Thanks, 00NR7!) I wanted the fibs to capture the swing high and low of the morning as the opening range. This can tend to be imprecise, so it’s more of an art. I went short as the 10:00 candle closed below the 0% fib, and closed weak. I missed that there was no volume uptick on this entry bar, which I think is important.

This was the bottom tick for quite a while! I HATE it when I take a trade that immediately goes in the red. The next half an hour was nerve-racking, as you can see. I covered half the position after the 10:25 rally failed–I was not proven correct, so I lightened the position when I was given the chance. For all I knew we were going back up. There was a lot of support at the 16.44 level, and when the ask dropped that low, nobody was selling. I thought for sure I would lose -1R after my entry, but I got a break and the trade moved in my favor. After price stalled out at the -19.1% fib, I covered on a reaction to 16.39, which was the point at where I would still show a profit on the position. With all the difficulty getting there, I thought this was a gift and I should just bail. Then the floor dropped out, and went on to way pass the -38% fib target! Almost made $16. I would have handled this trade better if my entry hadn’t been off so much, but at least I walked away in the black. Important for me right now. +0.1R

GigaMedia Limited (NASDAQ: GIGM) Long, 15′

I saw Zoomie point this out on Wallstreak, and I liked the setup–a Trader-X OR breakout. I placed Trader-X fibs as prescribed. When we broke the OR high, I watched. I didn’t like the upper tail on the 12:00 bar, but I entered on the next one anyway as we went above the close of that bar. Then sideways in the red, again. Crap. Well, after the 12:45 bar failed to take out the high of the day, and retraced way back down, I sold half at 15.36 for a 0.03 loss. Like on GFI, I was not proven correct, and I was back underwater again, and I didn’t want to take a full -1R loss on the position. Then we popped, but that too had problems. I sold the rest at 15.45 to offset my loss on the first half. GIGM should have been taking off, as the QQQQ’s were rallying hard at this time. So I just bailed, and in retrospect, that was the best thing to do for me. So another trade, another “profit”: +0.03R

Apple Inc. (NASDAQ: AAPL) Long, 10′

I was watching AAPL go sideways on declining volume. I actually thought it looked like a bear pause before another leg down, and I expected it to break down. At exactly that point, we had up movement on a volume uptick, so I changed my mind and looked long. Sloth on Wallstreak was talking about it as well, so I went long as we had a strong close above the 38% fib level, and also a pivot point from two days ago. My target was the 100% level at $137. This trade was in the black right from my entry. Much better to bite your nails over a profit and whether you should stay than to do the same thing over a loss! We pushed for 137, then pulled back and got stuck at 136.50. I sold half there, thinking we would likely fall back to my entry point, and I wouldn’t suffer any movement below that level, so I wanted to book some profit. Well, more buyers came in and pushed us up to $137, and I sold the rest there. There was another $1.00 to be had, but I’ll take what I got. :) Never buy at the bottom and always sell too soon, and you can’t help but make money, as Baron Rothschild once said. Trade PnL: +1.56R

So in conclusion, trading with these fibs imposes structure on the market for me. I don’t try to feel what the direction is, or where to enter–I let the fibs guide me. I traded similar setups to my paper-trades on Thursday. I’m surprised that I’m doing well with AAPL, as I have tended to get whipsawed pretty bad in it in the past. When I use a proper structure and stop, I do better than when I press and trade too big with a stop that’s too tight. Basically, I think I threw away that 30% profit I had by trying to trade inside of the noise of the market. Bad idea. I’ve been thinking about changing my stop rules to use either a candle-based method or some multiple of the average true range over the last few bars, whichever is bigger. I bet that this would have saved me a lot of money in August. I’ve noticed that lots of NR7’s are getting broken out of both sides on the next candle. Maybe when market volatility is high, narrow range candles aren’t good ways to pick stops. Just a few of my scattered thoughts.

Stocks Mentioned In This Article
Stock	Links
GFI	| |
GIGM	| |
AAPL	| |

This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com

This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com

I spent a lot of the morning throwing money away. I got no love from CAL as I tried to short it 7 times from around 31 and it never moved. We had a big expanse to cross, and on a day with normal volatility in CAL we should have hit 30 easy, as Jamie said today.

I was down about -2% on my equity when Wallstreak user dinsf called out RIO as a potential short candidate. I looked at the daily and the 15 minute to get an idea of potential resistance zones that might stop RIO’s advance:

Daily:

15 min:

With these resistances and targets in mind, I turned to the 1 minute chart to look for momentum divergence.

1 min:

I saw one (though it was very small) and decided to scale in 1/5 of my overall position size at 49.19 after a relatively high volume candle with an upper tail fairly near the overhead resistance. I would keep an eye on the resistance levels to make sure I got out if those were breached. RIO started to slide, caught a bounce or two, and then threatened to make a lower low. That’s when I piled in the other 4/5 of my position at 48.90. (In retrospect, I was too conservative and should have scaled in sooner–I sat out of half of the move!) I covered half when we had a lot of chop at 48.75, fearing a move back above my pile in point of 48.90. I held the rest until we hit the target area of 48.40, and covered at 48.36 for the rest.

I don’t know how to characterize the risk / reward on this play. My initial risk was from my entry at 49.19 to 49.50 (the highest resistance and also my failsafe point) on 20% of the position size, I suppose, but when I piled on short I could have easily lost more than that if we had a quick reversal. According to this measure, I returned +6.3R on this trade, but I don’t know that this is a fair number. Any ideas on how to track the risk on these plays?

Sadly, this win was only able to bring me to within $5 of being green for the day. I ended barely down, but I got practice in a StreetSmack scalp, so that was awesome. I should have pressed more on my pile-in timing and also on my ultimate position size (I could have traded more shares), but that will come in time.

This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com

This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com

The long awaited Q&A document summarizing Wallstreak user StreetSmack’s method of scalping short is here!

BEWARE DANGER CAUTION

You can really lose money fast using this method! This way of trading is dangerous, and could even be called “Wombat Crazy”, and is therefore not recommended for anyone. Trade this way at your own risk!!

Click here to download the document.

This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com

This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com

SPY took a tumble today, then made a miraculous recovery. I was right there on WallStreak calling the bottom. Since I am 10% at calling market direction, I thought I’d better post my call ;) The measured move is the coolest part, and uncannily accurate.

SPY

This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com

This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com

I tried a few short scalps today in IDCC, and got shaken out both times, for about -1.6R. The first was a -1R loss on a half size position, since I scaled in. The second was a -0.4R loss on a full position, as I added when I thought there was potential for a breakdown. I also tried to go short LSI, but it retraced and I got out to avoid another loss. So all in all, a kinda crappy day.

I decided I was finished for the day. Naturally, I had to check back in the last half hour to see if anything was happening, though. ;) Just then Bluedog on Wallstreak called out IOC as a possible parabolic short candidate. I looked at the chart, and I thought it was still really strong, and was thinking long. I set up an order just in case, and watched the tape. Here’s the critical part that influenced my entry (start at the bottom):

At the bottom of that picture, you see that the bid crossed the ask (I’m not sure if that’s an error or if it really happens, or what the significance of it is–anybody?), and the ask ran up after it, for a 0.20 move in under ten seconds. Both the rising quotes on the bid / ask and the rapid rate at which they were moving conformed my thinking and made me want to buy the momentum. It seems like a lot of data, but look at the timestamps of the action, and try to get a feel for how it streamed out. The highlighted part is when IOC made a new high after a lot of prints at the high, and I sent the market order. Right after that, there was a pop and the trade took off.

Here’s what the chart looked like when I entered:

And the rest of the trade:

I felt like Richard after my entry timing, but less wimpy, since I held out for more than 0.10 ;) I took a partial when price started chopping around under the high, and held the rest to see if I could get more. In the end, I sold the rest since the spread was so wide and a quick drop could take it back below my entry. Thanks to Bluedog, I had a good end to the day. I decided to press a bit, and I traded large enough size for the trade to put me up almost 3% on my equity. Right now I’m sitting at +17.5R, +20.6% overall on my Prop Trading since starting on 7/25 of this year. Not bad for a few week’s work, eh? Too bad my equity is only 1/20 of my buying power, but if I can consistently keep these results up for the rest of the year, I’ll move over some more “non-risk” capital from safer places so that I can compound it. Then when I have enough to cover living expenses, I’ll make the move to full time. That’s the plan, anyway.

Trade Summary:

IOC Long
Entry: $40.82, Stop: $40.62, Target: $Scalp
Partial: $41.50, Exit: $41.11, P/L: 2.26R

Trade Grade:

This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com

This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com

In looking over my charts from the last few days, I’ve come up with some more thoughts about StreetSmack-style short scalps.

What To Avoid

In my very limited experience, I typically watch a very short timeframe on these scalps, on the order of a few minutes. I’ve noticed that if there’s a lot of volume or choppiness at the (potential) top of a move, there’s no edge in entering there. Price could go either way. High volume means that sellers in size were met with buyers willing to take on positions in size. The bull / bear battle is not resolved at that point. This is different from the typical capitulation volume spike (like Jamie talks about) that indicates direction change. Here’s an example of why:

Notice that in the 15 minute chart, the volume spike does foreshadow a trend change, and it fully appears within the next 30 minutes. However, the 2 minute chart resolves the action of that 15 minutes into smaller pieces, and you can see what is happening with better resolution. The 2 minute chart shows that if you went short under the red candle after the volume spike, there was still another point to go before the ultimate top was reached. This was a time of high risk and uncertainty. The bull / bear battle was still being fought at the true time of the spike. The next few minutes resolved it, when price made a higher high on decreasing momentum and volume dried up. There were no more eager buyers at the new highs–upward momentum stopped. There were also no eager sellers in any size, so for a moment the stock is hanging in midair. This is the low risk, high reward spot! Shortly afterward, the stock went down, and selling pressure took over, and there were only red candles for the next 2.5 points, with at least a 5:1 reward-to-risk ratio.

(Here’s a larger version of the 2 minute to study if you’re interested)

Conversely, if there’s too much consolidation that occurs at or after the potential top, you also don’t have an edge scaling in here. The stock is either being accumulated or distributed by traders, and you can’t really tell which is happening until it breaks. Your odds are 50-50. This happened in the 2 min chart above from 10:30 to 10:50, and the stock broke out–it was accumulation, or at least a pause that was met with a new wave of buying interest that was unpredictable. You could try to short the breakdown, but narrow ranges mean less on shorter timeframes, and you’re better off being a 15 minute or longer “dummy” trader if you want to play that way.

What To Look For

A fitting analogy for what I’m looking for in a good parabolic top setup is a tailslide in an aircraft:

Zoomie can probably describe it less mathematically, but here goes: In a tailslide, momentum decreases until the aircraft reaches the apex, and for a moment the vertical speed is zero. The plane then reverses in it’s original attitude in a very gentle manner. Once speed picks up a bit, the aircraft tumbles back over and then begins to accelerate into a descent. You want your stock to do the very same thing! Upward momentum should slow, price should pause, and gently retreat. Next comes a tumble after the apex, and you want to enter here on a bit of strength, not short weakness or you could be walking into a bull / bear battle about to unfold. The stock will then start to accelerate into the downtrend, and you can ride it out.

Notice what the flight instructor says in this video:

“We don’t fight it, just let the airplane fly, power up, then we recover.” “If we try to force the airplane at slow speed it fights us.”

Don’t fight the stock! Don’t force the trade! Don’t try to short it when it’s still chopping around, and don’t chase a breakdown, either. It’s a graceful maneuver both in the air and in the markets. Just let the stock “fly” (stall out and gently reverse), power up (scale in) and ride the leg down. In my opinion, a choppy, violent, high volume peak should be avoided in the spirit of trading only the best setups. I want to pull off a tailslide.

What To Do and What Not To Do

Here’s a stock I traded poorly the other day–KMD. I identified a good entry (that I didn’t take) as well:

This is what I’m going to try to capture in my short scalps in the future. I’ll post the set of paintbars I come up with to help visualize this strategy better when I get them programmed. Comments and suggestions are welcome.

Watch this post's video on Youtube

This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com

This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com

Most days I trade part-time when I get the chance from work. Today I had the day off and nothing else to do, so I traded my first full-time day as a prop trader.

It was the hardest I’ve worked in years!! I placed 39 different transactions through a web-based interface, all from a single computer monitor. I was flying around windows and spreadsheets, charts–If I ever go full-time, I’ll buy another monitor and get better-than-free tools immediately! Plus, with the Fed jacking the markets up it was a crazy day. I traded almost $200,000 worth of stock today; there’s your trivia for the day.

I decided to crank my risk up as I discussed yesterday and play StreetSmack Style short scalps. At the open, we gapped down so hard that I faded it and went long CFC:

I went long as CFC went above the high if the first few candles with a stop at the day’s low. I added and removed at a few points, got confused and tried to sell some and ended up buying instead towards the end. I had no idea where I stood at that point risk-wise, so I just closed it all out at the purple line. Whoops.

The rest of the trades were short scalps. My worst case drawdown was -11%(!!) of my equity, and I finished up 6.7% on my equity when it was all over. Maybe the risk was cranked up too much (ya think)? Anyway, I’m glad to finish green on a day like today.

My paintbars served me quite well. They did the heavy lifting of telling me when to enter the first part of the position. I added inconsistently and bailed on some trades earlier than I should have, so my execution was off, but hey, it’s a new strategy for me. I depended on people calling out parabolic runners on Wallstreak, as I have no scan for those yet (Trade Ideas gets blocked by a firewall, so I can’t use that). Stewie made a dollar gainer scan on Prophet.net that he was using, so I’ll have to see if I can come up with something there.

In any event, I didn’t exactly follow the rules I set out for myself yesterday. I tried 8 short scalps–here’s the charts of the trades, some good, some bad (lightly annotated):

I’ll post an analysis of my rules and any changes I’ll make (I have a few ideas) over the weekend–for now, I need a break X_X

This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com

This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com

I scalped my brains out this morning, and basically ran through over -3R in losses. I was off in my timing, and was holding too long and with positions that were too large / stops that were too tight for the volatility. Just trading poorly.

I tried to refocus myself, and looked for setups on higher timeframes than 1 minute. Zoomie called out a setup in ORA on Wallstreak. It had been basing for over a year, and had a breakout yesterday and a big gap up today. It was a Trader-X style setup. Zoomie traded it on the 30 minute chart, and I traded it on the 1 minute chart.

I wanted to play a breakout of $47 with a tight stop so that the payoff would be big if it moved. My first entry was too early as it turns out, and I punched out to avoid hitting the stop (which was too wide anyway). Strike 1.

Trade Summary:

ORA Long
Entry: $46.98, Stop: $46.60, Target: $0.00
Exit: $46.78, P/L: -0.54R

Trade Grade:

Next, I watched the setup to see what it would do. ORA made a higher low inside the base, so I entered pre-emptively inside the base to give myself some cushion, like I did yesterday with CFC, though my stop was still too wide. In the end, it moved to just above $47, but no volume really came in, so I bailed when price retraced back below $47. Not a loss, so foul tip.

Trade Summary:

ORA Long
Entry: $46.90, Stop: $46.60, Target: $47.60
Exit: $46.97, P/L: 0.19R

Trade Grade:

Just like with CFC, the third time was the charm for me! Volume dried up at $47 and the 15 minute timeframe was finally aligned with the 1 minute, guiding me to go long. I entered early, with a tighter stop this time. About 20 seconds later, ORA popped about $0.30 immediately and ran up about a dollar in 2 minutes! It was unreal, and Zoomie called it in plenty of time for anyone on Wallstreak to get in. I took a partial at the 119% fib, and then closed out the rest when I had to leave the computer. I thought that I would miss the 138% extension if I was away, which was my target just above $49. During that time I was away, ORA made it within a few cents of that level. Amazing.

Trade Summary:

ORA Long
Entry: $47.00, Stop: $46.70, Target: $49.23
Exit: $48.47, P/L: 4.32R

Trade Grade:

Net PnL Today: +1.05R (even after all my screwups this morning)
Prop Trading Return on Equity from 7/25 to 8/8: +11.7%

If I can keep from throwing money at bad trades, then my PnL should really take off. Trade well and the money will follow.

This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com

This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com

I was busy all morning, but I got time to trade just before the Fed released their statement. I saw CFC taking a dive, and tried to scalp the action. My first entry was short at the bottom of a swing, and I was quickly out for a loss. Determined to keep swinging, I tried again to go short. This time the entry was good, but I didn’t partial out when I should have, and scratched the trade. Since trade #2 wasn’t a loss (2 strikes in the same stock and I’m out of it for the day) I tried again, this time looking long. My entry was terrific: I sent a market order to buy just as I saw price fall back from round number $27 and got filled at $26.90. CFC then snapped back to $27 and began battling it out, doing lots of volume a little above $27. This gave me an immediate cushion on the trade, and it ended up great, offsetting the loss from my first trade by about 2x. Here’s the chart:

Trade Summary:

CFC Short
Entry: $26.89, Stop: $27.08, Target: $26.50
Exit: $27.12, P/L: -1.20R

Trade Grade:

Trade Summary:

CFC Short
Entry: $26.96, Stop: $27.15, Target: $26.60
Exit: $26.92, P/L: 0.16R

Trade Grade:

Trade Summary:

CFC Long
Entry: $26.90, Stop: $26.80, Target: $27.50
Exit: $27.26, P/L: 4.34R

Trade Grade:

Wallstreak user Johnson also pointed out a beautiful base forming in JNPR, right at round number $33. I set an alert to tell me when it broke out. I held a very tight (for me) stop of S0.10, and it paid off very well. I traded off the 1 minute chart, though the 15 minute shows the base better, and I watched it for confirmation of the price and volume action I saw on the 1 minute. That’s kind of backwards to how I usually think (the higher timeframe guiding the lower instead of the other way around), but it worked out well and kept me confident to hold even though the 1 min looked scary at times.

Trade Summary:

JNPR Long
Entry: $33.09, Stop: $32.90, Target: $33.50
Exit: $33.59, P/L: 2.08R

Trade Grade:

I’m on a tear lately, and it’s a function of three things:

1) Good luck (I admit–I’ve gotten a few good breaks recently)

2) Freedom to trade at will from my Prop firm

3) An increase in my skills from my own experience as well as excellent mentoring from the exceptional traders on Wallstreak.

My prop account is up 10% since 7/25/07. That’s not only the best performance in two weeks I’ve ever had, it’s also the highest my trading gains have ever been. I’m finally making money by trading. Still, pride goeth before the fall, so I’m trying to be very cautious to avoid mistakes and not think I’m ‘home free’.

This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com

This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com

A breakout in my PnL, that is!

I was Martha for most of the day yesterday, grinding a +1.7R gain in ACH away to zero.

Here’s the ACH trade for +1.7R:

The other four after this were uneventful, just stopped out. Still, It sucked to be 1 for 5 and to have lost all that ground. Then, StreetSmack pointed out CT as a candidate for his short scalping strategy. It moved in a parabolic manner to the upside, and once the buying looked like it ebbed, I went short. I was in the trade for 8 minutes, and netted +5R. It was incredible! I got a bit lucky on my entry timing and the severity of the drop afterwards, but I like the idea and I’m going to study it more in the future as one of my strategies. I watched the 1 minute and price and volume during the trade, and took a partial when price stalled for a minute as indicated by the light blue line:

Keep in mind that’s a 1 minute chart! This play fits my trading strategy very well–I’m there to enter at an inflection point, where price changes from uptrending to downtrending. I buy-to-cover at the point where people are selling in capitulation, puking out their position, in a price and volume spike. I love it! Also, the candidates scream out at you, so they’re not hard to find, just like trading gaps–that’s a plus to me. This play is dangerous, and you have to be quick and have experience, but I think there’s a lot of potential there.

This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com

This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com

StreetSmack sends us more examples of gap setups. This time he focuses on entries that are inside of the opening range (IOR): Read the rest of this entry »

This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com

This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com

Wallstreak user StreetSmack has sent some charts that illustrate good entry points for trading gaps. I’ll be trading this style today. I traded 13 positions for a breakeven result yesterday, so today I’m trying something different. Like Trader-X style trades, the idea is to trade in the direction of the gap after a candle close very near or above a high watermark. X used the OR high as that mark. StreetSmack elaborated on his watermark a bit over on Wallstreak.

Here’s the charts showing example entry setups: Read the rest of this entry »

This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com