The second chart shows how I executed the trade. The first and second bars were WR and had nice volume. Bars 3 and 4 were IB with declining volume, so I thought that if sellers were able to break the second bar low, they would be able to break out of the box. I placed my stops 0.02 below the 2nd bar low and I placed my stop a few cents above the PDL and 0.01 above the second bar high. Unfortunately I was taken at both ends and AKS traded in a range for most of the day.
If you had any thoughts about why this trade fail, please go ahead and post. My two thoughts are: 1) The lower range of the box should have probably be $18, since the PP was closed enough and round numbers always provide some support/resistance. 2) The stop loss should have been 0.02 above the second bar high and that would have saved me.
9 comments:
Here are my reasons - I am not an expert and I may be wrong. I would not have taken the trade for several reasons: 1) I use relative volume analysis and then stock does not whow a pick up in RV. 2) I stay away from stocks that have price action that touches the prior day - I like my gaps to be gaps. I would like to see more separation here and I also want compact price action - the first hour of the prior day is all over the place - sign of indecision and no clear trend yet in your intended direction. 3) I plot the pivot lines and I like shorts to setup below S2. 4) This stosk set up at s1 -very hard for me to find setups that work. Study RCL - I use the 15 minute time frame - but look at the volume difference and the inner bars forming and you will see some of the differences I just pointed out. RCL did not have as compact prior price action like SEE. By the way, I still paper trade so I am not yet an expert. I also make mistakes in my paper trading like thinking PENN would be good to short based on a sliightly different setup than your trade.
I did no spell check - The stock AKS does not show a pickup in RV, what I meant to say. I use finviz as a stock screener and it has a relative volume that I set to 1.0 or better and I have not seen anyone post successful trades (gaps) that also did not have higher RV on the gap day - I cannot say this scientifically - but the majority of successful gaps have this and I wished I learned that a year ago. Relying on free scans has its limits. But RV is just one part of the equation. Good luck in your trading. July was a good month for me - stay positive. I developed different setups that took advantage of fading gaps, etc - because we will not see many successful gap plays so you got to take advantage of failed gap plays.
Thanks for your feedback Tom. How do you use RV analysis?
I should not call it analysis - I just use it as a way to sort stocks into higher probability successful gaps - on finviz.com I set the relative volume to 1 times or greater for both up and down gaps.
Tom,
Finviz looks like an awesome stock screener. Is it real-time?
FWIW: 1)I don't look at vol except in pairing down WL first 15' or so 2)I trade IB, hammer, doji, patterns, fibs, different time frames: 1-3/5' min drops too fast and would wait for a retracement or not trade it, 2/10' IB but fails, 6/15' hits PDL/OR 6Fib works for a small gain 7/30' doji works for a small gain 4/60' inverted hammer for gain. PDL has alot of sellers/buyers. Looks like an Island formation could drop Thr. X has a nice NR IB 15' chart with 3/15' break
Thanks for the feedback bl!
I look at dif time frames like 1, 5, 15, daily. I do not look at 30' or 60'; that would be really too much for me.
I also had X on my WL and saw 3/15 after the fact.
Cheers,
Jamie - I think you need to pay to get real time results with finviz
jamie. FINVIZ offeres premium services with real time quotes i believe but i find most of my ideas off finviz even with a time delay, i still manage to get killer ideas off it. What i love the most about finviz, is you can screen all criteria and just by moving your mouse over the stock symbol, you can see a quick chart of the stock!!! sweet feature!!!
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