Intel gaped down on large volume, then bounced back up on declining volume. It tagged the ORL from yesterday and left an inverse hammer doji. I went short on the break of that candle’s low, put a stop in above the tail, and then went to sleep. The first target was the ORL, the second was the Fib extension. Price slowly worked its way back down, and when it got within a few cents of the ORL I covered it. Because it was so late in the day when it hit the ORL, there was no chance for the Fib extension target, but good for 2.5 R.
Alcola gapped down on large volume, and immediately ran back up. The next bar continued up on lighter volume, tagged the 5 MA, but closed below the ORH, forming a red inverse hammer. I went short on the break of that candle’s low, put a stop in above the tail, went to sleep. First target was the ORL, second the Fib extension. I covered when it hit the ORL lat ein the day. Good for 1.5 R.
Las Vegas Sands gaped lower on a large red bar then consolidated with two IB’s. I shorted the low of the third bar. Price initially dropped, but could not break the ORL. The entry on this stock was bad. The signal candle was really no signal, and I should have passed on the trade, especially given that it was above the ORL. Worse yet, I did not close the trade when it could not break the ORL, and it later ran up and hit my stop for a full 1R loss. Not good trade selection, but could have been saved by good trade management.
Broadcom gaped down on a large red bar, and printed an inside bar that was hammer “type”. I went short on the break of the ORL. Price dropped to the halfway point between the ORL and Fib extension, and bounced, printing a doji. At that point I brought my stop to break even, and was stopped out on the next bar. This was also a bad trade selection, however, good trade management turned it into a scratch.
Apple Inc. gaped down, bounced, then dropped back to the ORL. It held that level, and made a low volume meander to the ORH, where it printed a red inverse hammer. I shorted the low of that candle, but was stopped out on the next candle for a small loss. This was not the best set up, and I am often too early on Apple to begin with. Price eventually filled the gap into yesterday’s low, pulled back and printed a weak bar (13th) and and inside red bar (14th). That short would have worked and been worth about 4R. I am learning with Apple that the first entry signal on a trade is usually not the best one to take, and that a two bar signal is much more reliable. (Read: I need more patience when trading Apple).
