Going into trading this morning I wanted to be open to the possibility that yesterday was a key reversal day. There was some enthusiastic buying at the open but the TICK never exceeded 554. Financials continue to weigh down this market, so I started focusing on the credit card companies. JPM, MA, and AXP are all headed toward their November lows. There was a nice bear flag in V but I let it go and instead shorted AXP after a couple of narrow range bars with volume contraction. There is also a miniature C&H on the 5 minute chart. I exited as my 3R target was approaching. It looked pretty clear that the PDL would be tested, but I wasn't going to push it. A good trade is like a gift. If someone gave you a $20 gift certificate, would you tell them you were hoping for $40? I'm thankful for a 2.83R trade in this market.Setup: 75
2 comments:
Hi Trader Rick,
Can you help me understand what your entry price, stop and exit price were to arrive at the 2.83R? I feel like I may be setting my stop too loose so any advice would be appreciated. Thanks.
With narrow range bars, most traders set their stop above the top of the narrow bar. My stop was at 17.34 and I actually entered a little early at 17.22. So my stop was .7% away from my entry. I exited a little early at 16.88. You really have to adjust your stops for the volatility though. If the VIX was at 80 I couldn't get away with a stop this close.
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