AMZN

Trade recap:

Entered AMZN puts on April 15th on the 5th 55 candle after it clearly crossed the 8 MA. Market calendar indicated it was time for a pull back as well as the DOW and NAS. Birthed the trade to the 233 and you will find a "fat pitch" on 4/17. Will probably go lower but today is an excellent day to take profits before some big tech names announce earnings this evening that could make AMZN bounce with it. I typically enter on the 55 as describes and exit on the 233 however I assess all the charts. Daily on top BBB/ red and green above 80 on RSI. Weekly been coming down since mid January. You will find a "fat pitch" today on the daily chart which is why I believe AMZN will ultimatly continue lower.

Great work, and thanks for sharing the details. Excellent trade. I agree with you that it looks to go down further until it hits resistance at around $251

BCT,

I have a question. If I am looking at this correctly, you had to "stomach" a fairly significant rise on the 16th-correct? On the 233, the second candle on the 16th (doji) looks to be a continuation or spinning top-indicating a rise. I cannot find anything on any chart that would have led ME to think it was going to continue going down.

That entire move is significant because it totally came back to you on the 17th and today was an excellent day to take profits. I simply dream of placing trades that will run that strong in my direction. I am sorry to sound so ignorant, but I just do not see how you felt confident staying in that trade. This is an admirable trade for me. Again, I try to go back and learn from other successful traders. I know we have established, but I want to re-state, I hope I my questions do not come off as insulting or disrespectful. Honestly, I am totally opposite of that thought process. I think the trade is one that I can find a way to get in your head a little and increase my trading knowledge.

I have the same question as Rookie. The 5th red candle on the 55 on the 15th was pretty much the bottom. Why did you wait until the 5th one?

The 5th candle on the 55 was the first candle that fully closed beneath the 8ma on the 55. At that point it was a 233 thought process. I never view my positions to see how much I am up or down. The 233 never gave me any indication that it wouldn't continue in the direction that the 55 led me too. I never look at a smaller chart than a 55 bc the gyration of smaller charts affect my decision. I always view the next largest chart to determine the direction.

Well I have an entirely different take on how I traded AMZN.

I was in this trade on April 11. I got in on the 55 chart when the stock hit 268.93 @ about 12:15. I have a separate account set up which I call my GAP account. Presently it is virtual and it is strictly for learning GAPS. I spend between $2,500 to $4,000. Any way I bought 8 PUTS @ 4.45 and sold them today for 11.70. I did jump a little early but honestly my option didn’t move that much even though AMZN went up $7 higher.

Why did I do PUTS when the stock price was rising on the candles? (**price rising on the candles**)

As the stock price kept rising in price (see the 55 chart candle April 11 at 1:10) the Stoch RSI was not making new highs. In fact the Stoch RSI was going down. The MACD "comb lines" began to grow smaller and eventually turn down. The space between the red and green lines in the directional movement was large and like the BB this space has to close. I was having a divergence. This is a sign of a coming change in the stock.
Using your 55 and Daily chart, mark your gaps with a ray line as follows… (I use a red ray dash line and I mark the body of the candle only I call this the DARCY GAP because you are supposed to use the tail lines. I don’t.) Mark the top of the candle, bottom of the candle and in the center of these two candles. What you end up with is 3 lines marking your gap. Follow the same technique for the next gaps.

On the 55 and the Daily…..See the gap down on March 13 to March 14? Mark that gap on the 13th candle and the 14th candle and in the center of that gap.
I mark GAPS on my Daily as well as my 55 charts. GAPS become support and resistance. When they turn to support I change them to a solid green if they are resistance I make them solid red. The longer they get tested and stand the more I increase the thickness. When they are broken on the 55 I remove them. When they are broken on the Daily I remove them. Some traders keep them and just change the color from support to resistance. I don’t because my charts get too cluttered.

You have another gap down on the 55 and Daily on April 4 to April 5. (Darcy GAP on the Daily) Mark those gaps as you did above.

Because I am getting the sign, divergence as I mentioned above, of a coming change in the stock I look at these gaps. Now I am expecting the following: AMZN to work it's way up to close the first gap it made on March 13.
So why am I expecting AMZN to close a gap when I am expecting it to go down according to the divergence that I saw beginning April 11 @ 2:10? Because of the direction of the trend, the ADX shows a strong trend, April 11 Daily candle is above the 50 ma and I am expecting a test of the GAP of March 13. Now look at the GAP from March 13 to March 14. Notice the March 14 GAP was broken on April 12 and on April 13 you had a test of the center gap but the candle didn’t close above the center gap line. This is on the Daily and the 55.

On the 55 chart you have a “DARCY GAP” on April 16 at the close and on April 17 on the open. This small gap has not been tested yet.

Now do one more thing….Change your candles to a line chart on the 55. At the top of this chart make a thick extension line. Now clone it and pull it down over the line chart. Find an area where on the line chart 2 - 3 points touch. You want the line to touch and go in the same direction. In other words if they touch in 2 points the next move for both has to be up or down. Do this in about 3 or 4 areas. These areas will also become support or resistance. Mark where AMZN bottomed out today on the line chart now change the chart back to candles. You’ll be surprised to see that right where the line bottomed out today falls right where the center gap line was on 3/15 to 3/18 and 4/4 to 4/5.

Darcy, It appears that learning how to trade GAPS is very technical and much more than I can grasp in the near future. As always, I will print and place in my file for future studies. Thanks again for your time and contribution to the forum.

Big Chart Trader- Your forum name fits you well. I could not stomach the fluctuations that happen on the smaller charts. It is obvious that you have done this a long time and really have a very high level of confidence in each trade that you enter- as does Darcy. I know my tolerance and with that being said, I have a lot to learn.

Just so the two of you know, I am humbled by your knowledge and expertise. I think I speak for everyone on the forum in saying, we are thankful and blessed to have both of you sharing your knowledge with some of Gary's young and novice students. I feel as if I am the little kid making a few nickels and dimes as I bounce around smaller charts.

FYI- I recently helped fund 2 people for attendance to Gary's most recent Survivor Weekend. Both have slowed down, and I think they have run for the hills. I have helped a total of 4 people, but at this point, I have no plans or interest in helping anyone else. I am reminded again that it takes special people to be successful at doing this. From my position, I am minimizing my generosity and working more on my development.

Have a great day!

Rookie...

Actually trading GAPS are no more technical than learning candles. I have set aside a virtual account only for learning about GAPS.

One of the first things to know about GAPS is they almost always close at some point. The second thing to know about GAPS is they may not close for a year or more one the daily. On the 55 chart it doesn't take a year for those GAPS to close. But the Gaps are as effective.

Use AAPL for study purposes. Use the 55 and Daily as well as moving averages. It will help yu as you move forward to understand even more...believe me.

Thanks to Darcy, Rookie, BigChart and others for all your posting and insight. Keep it up. I am learning daily. Thankyou.
Got the Darcy Gap book and I am diving in.

Thank you all for your willingness to share your experiences, it has been very helpful in my learnings.

I hear several of you talking about the spread or premiums price being used as an indicator that helps confirm entry and exit. I know Gary talked about entering when the spread is really small or as close to 0 as possible. I have not used that because I do not fully understand it. I try to buy when premiums are minimal, but I do not buy based on and indicator and more as a cost effective approach. I was reading over some of the materials in my manual (2-5). Gary's suggestions are-if placing and intra-day trade, do not entere a position when the spread is no more than 5 cents apart. A 10 cent spread is too high. I hope that makes sense.

I am finding myself entering positions, but being too content with being "Happy I S". I am very rarely exiting trades based on the evidence-opposed to be HIS. Darcy and BCT tend to trust their entry to a point that the constant changes in their $ while in the position are not important. That makes me "raise my brows". How can I improve my confidence because honestly, I am sure that I have convinced myself that in most cases, I think I am Happy In Seattle, but for the most part, I am AFRAID that the position will turn on me. Again, the problem lies in the fact that I do not know when to get out. When waiting for the candles to cross back over the 8 MA, watching the MACD lines converge, or waiting for the other MAs to turn against me, can be too long. At least that is what I have found in practicing.

Am I the only one having this struggle?

I like the idea of setting up a different account for learning GAPS. I like the thought of looking at the candles/indicators opposed to the account. I click that refresh button once every 5 or 10 minutes. When the gains hit my HIS point, I am out.

My biggest obstacle is CONFIDENCE. I have never been successful at anything academic or the use of critical logic and application. My love for trading has forced me to fight and face those demons. I pinch myself almost everyday and ask, "God, are you really allowing me to do this-SUCCESSFULLY?" I also thank God for Gary's teachings, you guys, and for RTT allowing some of us to have a forum to express, grow and learn to trade well, but more importantly for me, I am growing as a person. I hate to share so much, but I hope you guys know, dreams can come true, but those monsters inside have to be tamed or destroyed. Lack of confidence is one that I am fighting everyday. Thanks for helping me throw a few punches.

Sorry for going away from the trading stuff....

Rookie,

I applaud you for trying to help others by funding their attendance to SMSW. But I have learned, as perhaps you have, that people will be more serious and get more out of Gary's classes if they pay for it themselves. Learned that the hard way.

I think you are helping far more people here by sharing your experiences and knowledge and I thank you for it.

Rookie, I was going back through my notes and the spread that you are talking about .05 with .10 being too high is referring to intraday play on the Q's. In my opinion Stick to what is working for you. It seems to me that if you are trading intraday off of the small charts that you are right to get in quick and out quick because that is the nature of the beast of which you are trading, but if you compare it to bigger charts they don't fluctuate (indicators crossing back and forth) quite as much because of the bigger time frames and you can stay in longer based on the indicators telling you when to leave but some of them whipsaw as well just maybe not as much.

Rookie,

I can’t say I never enter a trade afraid. I do, still do and detest it when I don’t pull a trigger as soon as I see a trade. However over time I have grown less afraid, less fearful that I made the wrong decision. Some of that comes from learning and some of that comes from the head. I am constantly studying charts and reading material about trading and positive thinking.

You can have all the knowledge of how to trade and trade well but if your head isn’t in it, if you scare yourself out of trading it will never happen.

There’s a book I have been reading called “Money Mysteries form the Master”. It is by Gary Keesee. On page 146 Gary writes: “God leads us into pressure to stretch us and to give us a platform for victory and promotion.” He goes on in the same chapter and wrote: “As Joyce Myer says, ‘DO IT AFRAID’.” So I press forward. So I trade afraid.

There is absolutely NOTHING wrong with being HIS. NOTHING AT ALL!!! Heck I know some of Gary’s traders who would like just to get to “H” let alone the “IS”. I know MANY of Gary’s traders who gave up because it was hard. I am more than HIS and sometimes I get an extended trip to be HIH which I am fully expecting on NFLX. Personally I want to eventually get Happy in Italy and if I keep building HIS’s I will get HII! Let me share with you what 38 days of trading mostly HIS and using between $2,800 - $3,200 has yielded just my account (doesn’t include S/O) NOT BRAGGING but I mean this to encourage you to see HIS is GREAT! I have made in 38 days over $45,000.00. This has been only one trade a day and being HIS…YES! Knock on wood…I have not lost 1 trade in 38 days. I really do believe trading with my S/O has helped. We play off each other.

NOW>>>>

About getting out of your trade…Here is a hint… you can practice if you like… concerning getting out of a trade…when you enter a trade write it down. This helps you keep track of where you are in the trade.

My S/O and I use the sheets Gary gave us in the back of our class book. Ours was at the end of the one that had nothing but charts in it. If you do not have any of those, make one. I remodel ours a little to fit us ran it through my Microsoft Excel. You want the following DATE, TICKER, PRICE (of stock), MONTH , STRIKE (CALL OR PUT), BID, ASK, # OF CONTRACTS, COST, PROFIT. I took out percentage on my sheet. I tried to copy it here but it won't work. It is in Excel.

Now on your chart make an extension line on your 55 where you got in. If you prefer a smaller chart to trade on put an extension line on there. IF…IF…IF your candle comes back to that line CONSIDER getting out of the trade.

Always check your chart to see if it is merely a temporary pull back or if the stock is doing a turn around.

If your candle rises (if you are in a call) or falls (if you are in a put) on the next 55 (or 21) candle bring your extension line to that candle open. If the candle falls below or rises above that line (considering the option you bought) consider getting out of the trade.

Keep doing this every 55 minutes or whatever chart you enter a trade on. I set a timer to go off every 21 minutes so I can look at my chart(s). This helps me keep track. Also the sheet I described helps me know where I got in and when (I write down the time) this keeps me from looking at the $$. If I have hung on most of the day I examine all my charts and most always I am out at least by 3:15 – 3:30. Most of my trades I leave when I see the candle turn and I decide I would rather take my profit rather than risk it.

This is not an always thing however but it happens more often than not.