Today’s big news was that LEH reported its first quarter loss since going public and that was the excuse that propelled the stock (and all financials) down at the open. LEH tried to rally above the 5EMA but it was quite weak and eventually formed a nice base with a series of NRIBs. My trigger bar was the 12:45pm hanging man and the stock collapsed a few minutes later loosing a full point. I would had normally taken a partial at $28.00 because it is a round number, but I decided to exit my full position because I had a gut feeling that smart money would not let this one go beyond $28.00 (today). Lucky me!
6 comments:
Nice trade.
Any reason you passed on the 12:30 NR7 bar?
Also for your trigger bar, did you just enter at market when the hanging man completed or did you set a stop-limit order at the low of the hanging man?
From a risk reward perceptive,how to you gauge a probable target for this setup. You could use the ORL or the morning swing low as a possible target, but does it offer enough reward? What are your thoughts on this.
Thanks!
Thanks pdt~
I missed the 12:30 bar but that could have been also a good bar to enter. I waited until the hanging man completed and used the low of the hanging man minus 0.02 to set my Sell-Stop order (I am not using limit orders these days).
For Tonto Trades (Dummy trades) I like to see the risk:reward to be at least 3:1.
Cheers,
anarco
"For Tonto Trades (Dummy trades) I like to see the risk:reward to be at least 3:1."
In this example though, what did you figure your probably target to be, and how did you come to that decision?
Thanks again.
Targets are potential areas of resistance/support near my entry. In this case the immediate four areas in order of proximity to the entry were:
1) $29.00 was a PP (blue line on the chart)
2) ORL
3) Swing Low of the morning
4) $28.00 Round number
$29.00 was too close to the entry and I felt the setup was too powerful to stop right there. The ORL and Swing Low could have been a target and I may have taken a partial or exit there, but if you look at the 3 or 1 min chart, you can see how price consolidated below $29, so it seemed like price would not stop at $29.50 (swing low). In fact, if you look at the 3 min chart, you can see that the 13:18 bar goes from 28.75 to 28.16 non stop. So the next logical point to exit or partial out is $28.00.
When I am about to enter a Tonto Trade, I “guestimate” the ROI, but the target remains flexible until I see price behavior.
I hope this helps.
Sure did. Thanks.
Nice trade. 5,7/30" looked good too. Love news stories to perk up or bring down a stock/sector. IAI etf nice confirm for the brokers. MS JPM...wow!
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