I have to say that trading the plan is not as easy as I thought it would be. During the trading session I am tempted to take other trades, but it is nice to only execute what you think works. That gives you the chance to see how the other trades (the ones one does not play) unfold. And I can see that if one wants to get consistent results, one has to apply consistent methodology and consistent execution.
I only traded RIO today.
Entry criteria:
- First bar is bullish
- First candle characteristics:
= It closes on the upper half of the 15min bar range
= Body is at least 50% above the RZ line
- IB characteristics
= Top 50% of the previous bar
= Fills the wick of the previous bar
Target
Initial target is the PDH
Final target is $13.96. That is R2, the 38% fib ext drawn from PDL to PDH, and it is also a few cents below $14.00 (round number that is likely to act as resistance).
For me, the most important psychological aspect of this trade was the red bar at 11:30am. In the past I would have exited at the first sign of red ink. But now I know that I need to give price the chance to test the previous PP (or the previous consolidation area) before moving on. In this case, it worked like a charm.
8 comments:
Nice trade. I was noticing RIO throughout the day. I'm always looking for volume contraction on the narrow range bar, but I've seen a lot of setups that have worked without the contraction. Do you ignore volume for the most part like Trader X?
In my limited experience, I have seen that volume contraction in IBs tend to lead to a more explosive expansion.
But today I interpreted the increase in volume on bars 2 and 3 differently. While RIO's trade was developing (first 25 mins into the session) I noticed that OIH, SLB, HAL,and other oil stocks were weak, so for me the increased in volume was a sign that RIO was not, at that time, moving with the sector, and that buyers wanted to push price higher(to the $14 area) regardless of market action.
I could be wrong but that is how I saw it.
Your first sentence had me rolling...classic.
And truer words have never been spoken:
"And I can see that if one wants to get consistent results, one has to apply consistent methodology and consistent execution."
Glad you had a good day...and keep sticking with your plan!
-AT
Thanks AT!
Good job Anarco!
Sticking to the plan is really hard to do, but well worth the effort, not to mention the bank account.
Thank you Jamie!
I am looking forward to sticking to the plan throughout February and then comparing bank account results with January.
perfect final exit on Rio... completed a +/-1:1 ABC structure.
the red bar - yo got 25 cents moe than i would have, i would have bailed on that combo of candlesticks... nice trade - straight up off your entry, with no early "heat"...
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