I was mostly studying charts today but I saw this setup and I put some money into it.
SRS gapped into the previous day low and it lingered there for a few hours. In fact, since it wasn't doing anything, I decided to set an alarm (in eSignal) close to the PDL. BTW, I find alarms to be quite useful in these cases, but many times I even forget the functionality is there. SRS broke the PDL with a solid WR bar and high volume and it retraced just a bit to touch the PDL forming a quite bearish candle that I used as my trigger bar.
The first blue arrow marks my exit and the second one a potential second entry. I was really, really close to entering a second time, but I chickened out. Too bad!
10 comments:
Beautiful.
-AT
I wish they were all that easy to see and execute!
Cheers,
Wow! Killer trade. Congrats :)
Sweet!
Thanks guys!
Recently I've been having issues with defining exits (and partials) when the my stocks tumble before my target. So a situation like this one makes things really easy. But I'll still need to figure things out.
Anarco,
I took SDS trade today. It broke PDH, came to re-test it and formed a bullish engulfing pattern, not a hammer. Would you have taken this trade or it is best to enter on a hammer?
Thanks,
Susan
Hi Susan~
Let me answer by first saying two things:
1. I am currently studying the pullback setups so I am, but no means, an expert. Take my opinion with a grain of salt.
2. My focus right now is in understanding price action. That is to detect through the reading of the candles and charts who is in control (buyers or sellers). I am trying to only take trades in which I clearly see that.
So back to your question, would I have taken your SDS trade? Probably not. Not because it is not a good entry, but because I (with my current abilities) cannot really understand what is going on in the previous 5 or 6 bars. Those bars are very wide and the whole action seems choppy. Again, I am not saying it is a bad entry, I am only saying that I am unable to make sense of the prior action.
Would I enter on an engulfing bar. Absolutely. Specially at the base of a major PP.
Great job Susan!
Cheers,
Thanks Anarco for the analysis. Do you watch volume during these re-test of S/R setups? For example, in this trade, the engulfing bar should be on higher volume?
Thanks,
Susan
Hi Susan~
I am starting to look at volume but my understanding of it is quite basic. In this post read the comments section and you will see that both Jim and Jamie speak about the lack of volume as factor in the failed pattern.
Cheers,
Thanks Anarco for the link.
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