Luc1Grunt
01-08-2008, 10:30 PM
2451
Step by step of a high probability trade setup with high r/r. For those of you looking to daytrade (intra-day scalps)...follow along.
This is AAPL 5 minute for 8 Jan 08 (today). Stock close 7 Jan at 177.64 (not plotted on chart)
Gapped up to open at 180.14.
A few scalps on the 1 minute chart, but a cautious day for the markets as indecision reigns.
AAPL did not present many early opportunities (for my style and trade parameters).
Stock began rising around noon, but volume was lowering on the price rise. Still a few scalps on the 1 minute. As the markets began turning south around 1420, AAPL began sliding. Still no high probability setup. Good slide, but tricky trade.
As it began to approach the LOD (178.00) , begin looking at the setup on the 1 (there was a couple trades at 180.90 and another at 179.50 on the 1)..... It will either bounce from the LOD or break it. Note the increasing volume on the way down. Strong signal it would break but still a 50/50 risk.
Confirmation: (S&P stumbling on the 5 and 1 as well).
Note the break of 178 and then it moved backed up through 178. Typical action and a great fake out for unfortunate longs. It dipped and then closed below 178....first short entry of a small amount at 177.88.
Next bar screamed downward under heavy selling....2 more short buy-ins on the way down at 177 and 176.50 (market orders filled) and position is now max'd.
Buyers came in after the bottom at around 173. Note the placement of the fib line 0% from the previous swing high. As the buyers drove the price up, all positions exited between 173.60 and 173.90. The action was forecasted by the massive influx of buyers....you could feel the change.
All positions now closed. Next trade setup is the fib bounce.
Note the 38.2. It could not hold it and buying volume on the 5 slowed.
As it opened the next bar at the 23.6 it spiked a bit on the 1 and blew right back down.
Another larger short entry at 175. Larger because the markets were all selling, AAPL volume began increasing and the fib line could not hold.
added final short to max position as it broke the fib base line (173).
Covered all positions 171.80 and 172 (market orders).
Same price action occurs daily on many stocks. This (AAPL) is one I am very comfortable and familiar with.
The only indicators are price bars and volume. Plot a quick fib to get your bearings, but use only as a confirmation and not a "signal".
Charts actively running are 1 minute, 5 minute, 15 minute, and S&P 5 minute. T&S is running and only occasionally level II (too distracting).
Sorry about the chart quality....it's the only chart platform I have that will fit the size limiations of the forum.
As I've posted here and on other forums, if you intend to intra-day trade, pick a high volume stock (I prefer NASDAQ) watch it day in and out and see how it reacts to support and resistance levels. Sit on your hands (literally) if needed and watch. Watch the action and correlation of the S&P or NAZ Comp. Watch a few timeframes.
Hope that helps a fella. Looks and feels easy, but the education can be expensive. Discipline and mental attitude are partners in the quest.
Happy Trading.
Step by step of a high probability trade setup with high r/r. For those of you looking to daytrade (intra-day scalps)...follow along.
This is AAPL 5 minute for 8 Jan 08 (today). Stock close 7 Jan at 177.64 (not plotted on chart)
Gapped up to open at 180.14.
A few scalps on the 1 minute chart, but a cautious day for the markets as indecision reigns.
AAPL did not present many early opportunities (for my style and trade parameters).
Stock began rising around noon, but volume was lowering on the price rise. Still a few scalps on the 1 minute. As the markets began turning south around 1420, AAPL began sliding. Still no high probability setup. Good slide, but tricky trade.
As it began to approach the LOD (178.00) , begin looking at the setup on the 1 (there was a couple trades at 180.90 and another at 179.50 on the 1)..... It will either bounce from the LOD or break it. Note the increasing volume on the way down. Strong signal it would break but still a 50/50 risk.
Confirmation: (S&P stumbling on the 5 and 1 as well).
Note the break of 178 and then it moved backed up through 178. Typical action and a great fake out for unfortunate longs. It dipped and then closed below 178....first short entry of a small amount at 177.88.
Next bar screamed downward under heavy selling....2 more short buy-ins on the way down at 177 and 176.50 (market orders filled) and position is now max'd.
Buyers came in after the bottom at around 173. Note the placement of the fib line 0% from the previous swing high. As the buyers drove the price up, all positions exited between 173.60 and 173.90. The action was forecasted by the massive influx of buyers....you could feel the change.
All positions now closed. Next trade setup is the fib bounce.
Note the 38.2. It could not hold it and buying volume on the 5 slowed.
As it opened the next bar at the 23.6 it spiked a bit on the 1 and blew right back down.
Another larger short entry at 175. Larger because the markets were all selling, AAPL volume began increasing and the fib line could not hold.
added final short to max position as it broke the fib base line (173).
Covered all positions 171.80 and 172 (market orders).
Same price action occurs daily on many stocks. This (AAPL) is one I am very comfortable and familiar with.
The only indicators are price bars and volume. Plot a quick fib to get your bearings, but use only as a confirmation and not a "signal".
Charts actively running are 1 minute, 5 minute, 15 minute, and S&P 5 minute. T&S is running and only occasionally level II (too distracting).
Sorry about the chart quality....it's the only chart platform I have that will fit the size limiations of the forum.
As I've posted here and on other forums, if you intend to intra-day trade, pick a high volume stock (I prefer NASDAQ) watch it day in and out and see how it reacts to support and resistance levels. Sit on your hands (literally) if needed and watch. Watch the action and correlation of the S&P or NAZ Comp. Watch a few timeframes.
Hope that helps a fella. Looks and feels easy, but the education can be expensive. Discipline and mental attitude are partners in the quest.
Happy Trading.