WLT call

June 18, 2013....At 9:51 S/O saw E chart on 5,10,13 and E on 21 had HRFP on 55. On GW 21 all indicators up (S/O has 5 and 10 moving average on GW's 21 thickness 3). ADX up, money flow up.

Bought 30 June Calls srike 12.50 @ .87 sold @ 11:24 with profit $1,470.32 each.

I was a little hesitant because of the over sold area on GW's 21 chart but jumped when S/O did. Glad I did.

Darcy, did the fact that WLT gapped up some Tues morning influence the decision to buy because it led to separation in the "E" moving averages? The crosses for the E actually took place Monday afternoon

cheetah Wrote:
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> Darcy, did the fact that WLT gapped up some Tues
> morning influence the decision to buy because it
> led to separation in the "E" moving averages?
> The crosses for the E actually took place Monday afternoon

No trade happened because of all the signals including GW's HRFP on 21 and 55.

When I or S/O look for a trade on E charts we also look for a FP or HRFP. You can see the divergence on the 21 to the 8 on 6/17. StochRSI crossing up, MACD crossing up later and then Directional movement crossing up but E charts say PUT.

Look at the difference in how the charts look on 6/17 compared to the way they looked on 6/18.



Edited 2 time(s). Last edit at 06/20/2013 06:42PM by Darcy2.

So you look for a HRFP on GW's 55 & 21 charts first - then look at the 10 & 21 "E" charts normally (go down to a 5 "E" chart for summertime trading) and you are looking for separation between the "E" moving average lines, & strength in the ADX and Money Flow -- with the mindset that you are going to be in the trade for a very short time due to trading off small charts. Is that correct, or close?

cheetah Wrote:
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> So you look for a HRFP on GW's 55 & 21 charts
> first - then look at the 10 & 21 "E" charts
> normally (go down to a 5 "E" chart for summertime
> trading) and you are looking for separation
> between the "E" moving average lines, & strength
> in the ADX and Money Flow -- with the mindset that
> you are going to be in the trade for a very short
> time due to trading off small charts. Is that
> correct, or close?


Hopefully she will confirm - that sounds pretty close to what I've heard her describe. I'm interested in trying that approach with bigger chart timeframes for W&O trades.

Here's how I look...

On my computer (lap top) I have the 55 GW chart, with thick ADX,next the 10 E chart with money flow, then a 21 GW chart with 5,10, and 20 moving average with thickness 3, Under these I have (under 55 chart but still visible with the 55) GW 5 with the 5, 10 and 20 moving average thickenss 3, next 13 E chart with money flow. I have a 34 GW chart with a 5,10 and 20 moving average thickness 3 and S/O has a 1 minute GW chart under his 21 chart.

These charts are stacked like bricks so that on the laptop we can see all six charts in full...so they will be small.

Added the 5, 10 and 20 moving averages to GW's charts to use as an E chart simply because couldn't get all the charts on my desktop using a laptop.Also included in GW's charts is a 50 and 200 moving average.

Here's how I and S/O look...

Step:

1) Look at GW 55 first for FP or HRFP with good ADX or turning up. A good ADX is above 25. ADX gives you the strength of the trend.

2) Look at 21 GW chart for FP or HRFP with good ADX or turning up. Use to have a 21 E chart but when summer zone happened changed 21E to a 13 (seeing Rookie's brain here... So on 21 GW chart made 5, 10 and 20 moving average thickness 3.

3) Look at the 5 GW chart (with 5,10 and 20 moving average fully visible) with good ADX. You want the 5, 10 and 20 moving average VERY VISIBLE.

4) M ove to the 10 chart for E to confirm the 55, 21 and 5

5) Look at 13 for E to confirm 55,21, and 5

This confirms a TREND and a more likely chance of a trade. But I return to the 55 and 21 to see if candles are above or below the clutter.

What I mean by clutter is a "glob" of moving averages especially the 20, 50 and 200. These moving averages act as support and resistance and can assist in judging the size of the move. For instance if candles are above the 20 with the 50 and 200 below the 20 chances are your call will have more strength. If the candle is hovering between these moving averages in a narrow range your move will be smaller. If your candles are battling these moving averages chances are you are best not trading that stock and look elsewhere. If these moving averages are stacked as follows 200, 50 then 20 your put will be stronger.

This is why I also mark my gaps using the 21, 55, and daily charts. The larger the chart with a gap (like the daily) and the longer the gap holds the stronger the call or put will be. So....look at FDX on the daily chart. Note the gap? But also note the candle @ 12:07 hitting the 200 moving average? (Whoop's hit enter again before I was done...)

You've got support right now on the daily so I would not trade this off the daily for a PUT. I'd be waiting for a Call.

One other thing that will help maybe. Note the center zero line in the MACD. If you have more room below that center line the stock is bearish....if you have more room above that zero line the stock is bullish. This helps in the strength of the move in the 5, 21, 34, 55 and so on.

===========================================

S/O said I needed to also say he monitors the 1 chart for movement. He draws a line when he starts to watch a particular stock on the 1 minute chart if the candles cross that line going in the direction he is looking to trade he enters. Basically you could say the 1 minute chart is his action chart.



Edited 2 time(s). Last edit at 06/20/2013 11:23AM by Darcy2.

trendtrader1 Wrote:
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> Hopefully she will confirm - that sounds pretty
> close to what I've heard her describe. I'm
> interested in trying that approach with bigger
> chart timeframes for W&O trades.


The E chart (the name I gave it) comes from Technical Analysis book. The E is used on a daily in the books example. You buy a stock when the 5 and 10 crosses the 20 and sell the stock when the 5 crosses the 10. What S/O and I did was simply apply that to small charts.

Darcy2 Wrote:
-------------------------------------------------------
> trendtrader1 Wrote:
> --------------------------------------------------
> -----
>
> > Hopefully she will confirm - that sounds pretty
> > close to what I've heard her describe. I'm
> > interested in trying that approach with bigger
> > chart timeframes for W&O trades.
>
>
> The E chart (the name I gave it) comes from
> Technical Analysis book. The E is used on a daily
> in the books example. You buy a stock when the 5
> and 10 crosses the 20 and sell the stock when the
> 5 crosses the 10. What S/O and I did was simply
> apply that to small charts.

Yeah, I read that a while back when you mentioned TAD and the E signal. I have been practicing with the E on the daily with marginal success. The E signal typically comes days after the fat pitch, and often times the stock is already hitting resistence at the bollinger band - so it's tough to enter a trade at that point. However, when the E is strong, it can go on for weeks, riding the bollinger band.

cheetah,

I am in my trades for a short time not because I use smaller charts but because mostly I do not like holding over night. I have at times held over night when the Daily is so strong and is telling me to remain.

I just don't like to hold for any length of time perhaps also because I am able to watch the market from open to close almost all the time 5 days a week since I work at home.

I have grown use to cashing in and moving on. That doesn't mean I wouldn't play the same stock the following day such as had I held to VZ over night virtual my $$'s would have been HUGE.

I think it is quite possible the chicken in me that makes me sell but then there is nothing like having a paycheck every single day.