Sometimes it is knowing your stock

Hope everyone had a wonderful Easter!

NFLX is one of my fav’s so when the candle closed below the 200 moving average on the 55 chart I knew I could ride that down for a while. I watched it off and on until this morning I was happy with my profit and got out of the trade.

It is unusual for me to be in a stock that long but it was one of those things where I knew how this stock was going to act and the news around it was not good.

4/03/2013 O STC NFLX Apr13 185 Put 3 $21.15 $14.95 $6,329.81
04/01/2013 O BTO NFLX Apr13 185 Put 3 $8.75 $14.95 ($2,640.04) 3,689.77
Total Realized Gain/Loss for NFLX $3,689.77

Excellent trade... I would have not slept a wink- fearful of the open. Until I can get over those fears, I can only trade intraday. My mentor says I am not REALLY trading the way we were taught, and will never make a lot of money because I trade intraday. I trade the style that works for me. My brokerage account says intraday trading is working just fine.

I am still a little "shakey" because this trading thing has become almost too easy (Please God do not make me eat those words!!!!) I have several things I look for, wait for, and feel before I enter a trade, but again, it is becoming much easier.The trade is either there or it is not-That simple. Gary said he makes money as easy as he breathes. I do not ever see that, but I am spending less time studying previous charts, backtesting, etc. I guess I have already done that. Now, I am going to read more books and stay aquainted with my expert stocks. I still have to trade in this summer zone, but I am ready for the challenge. That light bulb is getting brighter.

Thanks again for sharing, and as always, I will always be grateful to you for helping me so much. The latest indicator that became more clear that you shared was identify the formation of the "E". When I see it after a good cross, I count my blessing for having you apart of this forum.

WoW, great trade Darcy, Love it! Keep up the great work and posts

Thank you!

rookie...I do not trade exactly as Gary taught either. I found that when I wait for an action chart the trade is nearly done. I have traded NFLX and LNKD ever since they became tradeable. I did this because Apple, which was my main stock, got so high I just gave up trying to trade it.

I keep my investment to around $3,000. There are times when I know the stock will go up or down with almost 100% certainity. NFLX was one of those. Upgrades and downgrades help me decide as well as moving averages. The 200 is so heavy that when we have a "death cross" (200 goes above the 50) you can ALMOST bet the stock will go down.

I am glad you are reading and doing what you are doing. Progress happens slowly IMHO and even a turtle will reach his destination one step at a time!

As I have said it has taken me 7 years to get here.

I think you are doing GREAT...as Tony the Tiger would say!

Darcy,
What is your trend and decision when trading this way?

Darcy, I think it is important for everyone to know that we do not have to trade EXACTLY like Gary trades or suggests. He made that clear. If you find a way to make money and incorporate some of your own techniques, it is what he suggested. I do not deviate much from his training. For the most part, he covered it all-although I might think I am doing something unique.

Today, I closed up shop early because I would only chase. When the DOW drops as low as it has today, and my stocks open low and flatten or open high and against the market, I am out. No trade for me! I am not close to being good enough to make a good trade during this kind of day. Been there done that too many times- tired of taking that butt whipping. I have submitted and will obey. I am going fishin!

Big Chart Trader: "Darcy,
What is your trend and decision when trading this way?"


There wasn’t any trend to make me get into the trade. This was using the moving averages and negative comments to make this trade. My decision came when the stock on the 55 fell below the 200 moving average AND all the talking heads were dogging the stock.

Moving averages are light magnets or weights. The larger the moving average the heavier it is or the stronger it's power to repel candles off. Magnets have two sides they attract or repel…so do moving averages.

Look at NFLX 4/01/13 @ 12:15PM on the 55 chart. Scroll back the 55 chart to that candle. That is where I entered the trade.

The candle fell below the 200 moving average. Look at all the moving averages above the 200. What direction were they yielding? Up? Or Down?

Where was the 50?

Look at the weight on the candle from the moving averages. Where do you think the stock would go? Don’t look at the Stoch RSI in the over sold position. It could ride in that area for days. Look at the ADX line. I have mine as dark gray #2 rather that blended into the back ground. The ADX line tells you the strength of the trend. If the ADX line is going up the trend is strong. Which way is the ADX line going? There was no reason not to enter this trade nor exit it.

Scroll forward to the open on 4/02/13 that candle pierced the 200 but never closed above it. I almost exited the trade there until I saw NFLX start to fall sharply and could not close above the 10 moving average.

I remained in the trade until 4/03 and when the white candles started on the 55. I was happy in Hawaii.



Edited 2 time(s). Last edit at 04/06/2013 12:42PM by Darcy.

Hi Rookie,

You are right. Everyone will trade differently. I use Gary's charts but I also use other information. I do not try to add so much that I become messed up in the head. My brother-in-law has so much going on with his charts you can barely see the candles.

When I first started to trade I followed every rule I could follow. But for the last 2 years I noticed that waiting for an action chart usually caused me to miss a great deal of $$$ on a trade. I then realized that I was able to see a trade before it was confirmed with Gary's rules. That is when I realized Gary also taught us that it isn't always a chart thing...It's an art thing.

As I trusted more and more of what I saw I was able to trade better. Then I read TAD and added the information I learned there about moving averages. My S/O made two small charts with the 5, 10 and 20 moving average with money flow and our trading improved. RTT has helped me say focused. Then I added the ADX line and our trading got even better. From the first of this year my S/O and I have hit 100% of our trades correct.



Edited 1 time(s). Last edit at 04/06/2013 12:43PM by Darcy.

Darcy,

Will you elaborate more regarding your ADX settings. Thanks

My ADX is part of the Directional Movement Gary gave us in 1-5. The setting he had us put for the ADX then is the same I use now. The only difference I have is instead of having my ADX (Average Directional Indicator) line the same color as the back ground in my chart, I have made my ADX line the thickness of 2 and color dark gray.

I added this ADX line because it is generally used by trend traders. I am a trend trader. I am not a long term (5 month) trader. I trade in the month I am in which is why I use short charts. All the ADX is designed to do is tell you the strength of the trend. Much like Gary’s chart of the Directional Movement you know when a stock is going up or down depending on the criteria he has set…the ADX tells you whether that criteria is strong or not.

When the AD X is above 20 it is considered that there is strength in the trend. However I prefer the ADX to be at 30 and rising. If the ADX begins to turn down I look at all my indicators to see if it is a minor pull back or is the stock going lower. I also look for support or resistance in my candle area.

The strongest level for the ADX is 100. The highest I have seen has been 80 and the lowest 10. I have black lines on my Directional Movement at the following numbers 10, 20, and a dark gray dash line at 30. That Dash line is a warning for me not to enter a trade in that area. I have sat on trades making $50.00 for half a day with the ADX line hanging on that 30 mark. I then have a black line at 40. From that point I have marked everything with a thickness of 2 dark gray lines at the 60 and the 80. I have not yet seen anything go to the 100 mark yet. Most of the time (not always) when the ADX breaks 40 it will go near the 60 and if my indicators still look strong I am good till it hits 80 however if the rest of my indicators tell me the trade is nearing an end, or if I am coming up on earnings…you guessed it I take my profit and run. Exiting only on the ADX is not something I do unless all my indicators (which are Gary’s and information I got from the TAD book) tell me the trade is ending not just going sideways to catch the next rise.

If this doesn’t help go here:

[www.investopedia.com]

As you look at the graphs and charts you can see why I get excited when I hit a place where the ADX hits around 10 and begins to turn up but not totally until I get a sign from many indicators. I never ever use the ADX only.

Darcy, awesome post! That clears up some ADX misconceptions I have had. Thank you for sharing!

I traded CF this morning. I rode it down on a put from about 186 to about a little over 181. I jumped in shortly after amateur hour (9:45) and out by 11:10. This is my operative window of time to trade. I generally do not enter that early, but I know CF pretty well. I have traded it for well over 1 year through each trading zone.

Just want to give a little insight to my trade......
I love entering position if the Dow is above or below 20. The Dow was below 20 and slowly moving down. Until I am better at trading, I very, very seldom enter a trade going against the market. I typically say never, but I have entered a handful of positions, and chose to fight Rambo instead of Barney Fife.

I was cued in on CF because of the Gap down on the open. I do not know how to play Gaps, but it felt good to say "Gap Down". I had a few things going in my favor. One being the Dow was below 20 and CF opened below the previous day's low (Market Makers Edge Strategy). So far I am looking really good. I see that long red candle painting on the 55. That is good. I flip to my 13 and watched the first candle paint red (still well below previous day's low). I look at my Directional Movement line using my 13 chart. It is going up, meaning the trend is continuing in the same direction. For me, the DM can go up when the stock is going down. It confirms that the momentum is going in the same direction as the stock. All candles on all my charts were below the 8 MA. My line was seperating on my MACD off the 13. I flipped back to check on the Dow. It was still going down. I waited for the 2nd candle on my 13 to start painting. I saw the continuation of the movement because the candle started to paint below the previous candle. I heard a very loud scream, "IT'S A TRADE!, IT'S A TRADE!". I dove in.... 1.2 hours later, I had about $650 dumped in my brokerage account. I got out on the 13 chart- on the 11:14 candle. Candle started to move back in the bollinger bands and I was also Happy in Seattle. Folks, identify 4 stocks that move, and you get these trades twice every week. My goal is to eventually get to a point
I am buying 20-30 contracts opposed to 4 or 5.

Please do not think I am bragging. I just want everyone to know that this trading thing does not have to be so hard, but you have to know your stock, know candle patterns, and understand support and resistance. My biggest issue is, I do not work on the art side of trading enough. I am only a technical trader! I simply do not have the time available to read news. I have CNBC through TOS, but that is about it regarding the art aspect of trading.

Awesome work!!! I am so thankful that you, Darcy and others are willing to share details of how you are trading the market. Congrats and as Gary says keep working on perfecting the process and the money will take care of itself.

I entered CF as well this AM but with a different thought process. Rookie, glad your trade worked out as well. I actually had an entry I was more comfortable with on the 55 lunchtime candle yesterday when a candle closed beneath the 8 MA and the 50 MA. I missed it but entered the trade on the open this AM. I prefer to birth a trade to a big chart and I am still in this trade due to Daily and 233 just getting started. If you have the 8 MA on your 55 you can identify that it bounced off the BBB late in the afternoon and has now tested the 8 MA. I doubt it breaks through it on Monday however if it does then I will take profit. Also, if you view the Daily you can see what institutional traders identify as bearish which is the 50 MA crossing the 200 MA to the downside.

Great trade Rookie.

LOL… I traded CF also. I bought 20 contracts. That candle on the 55 was a great ride.

The “general rule* about gaps is “trade in the direction of the gap”. However I have found it all depends on what kind of gap happens which is why I have been studying gaps. Gaps will more often occur on smaller charts. Lately I have been studying “Dead Cat Bounce”.

I do not see you as bragging. Information is the best thing for those who want to learn.

BCT: Well we all must have kept CF going down! I want to thank you for your contribution to RTT's message board.

You are correct. "BCT: Also, if you view the Daily you can see what institutional traders identify as bearish which is the 50 MA crossing the 200 MA to the downside.


This is called a death cross. A golden cross is when the 50 crosses above the 200. Both of these generally drive the stock up or down for a while.

CF on the Daily when those candles came back in and tested the 20 moving average and couldn't break through; then the 20 moving average becomes a trend line.


I agree with you. I don’t think it will break through on Monday according to the Daily at least not by what I see today (4/11). If not it may be a re-entry for me.

CF is a great stock and one of my favorites.

I didn't get into CF but now I wish I would
Have!! I did get into EOG however and I am still in it. BCT your birthing
Concept is very Intruiging and so I thought I'd give it a go. I normally just trade from the 233. EOGcrossed down on the
55 this morning and continued on the 233 it closed just below the 200 ma
So we will see how it goes. I entered off the 55 cross down.
Also I remember seeing a question earlier about Gary's survivor newsletter.
I subscribed to it in January and I personally think its worth every penny!
He sent me a "basket" of stocks he would be referring to which is awesome!
He sends lots of encouragement and tidbits every 2 weeks. He sends his trades that
He traded and tells the entry and exit. I have taken his trades and COMPLETELY devoured them
I enjoyed Survivor 1 can't wait to take 2 and 3, and will subscribe to his news letter as long as he will let me.
Sorry for the grammar mistakes I'm typin from my Phone and I'm just not that good at it

Stacees what a great trade....Good for YOU!!!