[12:32] <brandon> this is the daily chart of INTU [12:32] <brandon> and the intraday one minute [12:32] <brandon> first on the daily you can see we have a very nice trap that was shapping up [12:33] <brandon> a trap occurs when the prior day the stock opens on the high and closes on the lwo [12:33] <brandon> and it has range expansion [12:33] <brandon> then if it goes above the prior days high the next day [12:33] <brandon> the trap is in [12:33] <brandon> this is one of the very best setups out there [12:33] <brandon> you can next see that we have a very good gap on the charts [12:33] <brandon> so we have some energy in the stock [12:34] <brandon> INTU does not work to fill in its gap [12:34] <brandon> and given that the saying "Gaps fill" is generally true [12:34] <brandon> then this is a signal that we want to watch this stock [12:34] <brandon> because its strong [12:34] <brandon> so wait for a line to form [12:34] <brandon> a breakout point [12:34] <brandon> and thats that [12:34] <brandon> something that I want you guys to really notice [12:34] <brandon> and its very important [12:34] <brandon> how much we do the same stuff over and over again [12:35] <brandon> I pass on tons of stocks [12:35] <brandon> things that are moving like crazy and I will never get them [12:35] <brandon> because the best way to trade is to specialize in one thing [12:35] <brandon> and do it over and over [12:35] <brandon> guys on the floor try to buy at 1 and sell at 2 and if they cant sell at 2 then try to scratch it [12:35] <brandon> or they do some spreading [12:35] <brandon> and none of it is sexy [12:36] <brandon> but it can be profitable (less so now with all the Elect. stuff coming online) [12:36] <brandon> but you as a screen based trader want to be doing the same sort of thing [12:36] <brandon> not buying at 1 and selling at 2 [12:36] <brandon> but just specialise [12:36] <brandon> each thing you do will have strengths and weakness [12:36] <brandon> you have a relationship with it [12:36] <brandon> Toni does stuff that drives me crazy but I still lover her [12:36] <brandon> a setup will be the same [12:37] <brandon> there will be drawbacks too it [12:37] <brandon> but if the overall strengths for you outwiegh those [12:37] <brandon> then you have something [12:37] <brandon> but the best way to be profitable [12:37] <brandon> is to be really boring [12:37] <brandon> the same stuff again and again and again [12:37] <brandon> make sense?
Im gonna call it a day. TSM remains a nice setup that you can watch if it breaks over 8.50. I will start to post 1 or 2 real time idea's on ET a day, possibly here, possibly on another thread. Anyway, im off. Brandon
I read in one of the traderâs magazines just recently, I forget which one, that did a study on gaps. Now, they recommended that they best time to fade the gap is at 9:36AM EST (when the majority of reversal move begins thereby giving room for it trend away from the gap and then start the snap back to the gap) if its still open and to close out by 10AM (roughly). I think their studies showed that if it hasnât filled by then, that the probability of it filling are less likely. Have you run a study like that, Brandon? Initiate a gap fade play at 9:36AM and have stops determined by time, profit objective (the closing of the gap), and max acceptable risk. Do you think that this will increase the risk to reward ratio and increasing probability of success?
Here is a class I gave some time ago on trading (fading) Index gaps. I have a mechanical system that does fad gaps a few minutes into the day, but for the most part I like to have good statistical info and then apply discretion to it. http://www.tradingfrommainstreet.com/ETGaps.html Brandon
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[13:24] (trikieone) brandon does it ever get to a point where it basses to long [13:26] (brandon) thats a good question trikienone [13:26] brandon and it does get to that point eventually [13:27] brandon think of a base like a ledge on a cliff [13:27] brandon or a porch you put off your house [13:27] brandon you have to have support beams [13:27] brandon it can only go out so far [13:27] brandon or it will collapse [13:27] brandon and a base is the same Brandon
This thread has gotten to be pretty long, so Im basically going to let it go. If you do have some questions specific to a stock you are watching etc please do feel free to ask here and I will reply. I will now be posting on my new thread "The pump and dump thread" with real time trading ideas, most of which come from gaps. http://www.elitetrader.com/vb/showthread.php?s=&threadid=17118
[10:20] <brandon> This is basically my std gap and go setup [10:20] <brandon> the best kind of gaps are large ones. [10:20] <brandon> The bigger they are the more energy is being put out [10:20] <brandon> the less likely they are to fill [10:20] <brandon> this does not mean to buy in right off the bat though [10:20] <brandon> coz nothing moves in a straight line [10:20] <brandon> everything needs its rest [10:21] <brandon> so you wait on a setup [10:21] <brandon> if you dont have this imprinted in your mind, write it down and paste it to a monitor. [10:21] <brandon> DONT FADE LARGE GAPS. [10:21] <brandon> TRADE BREAKOUTS IN THE DIRECTION OF LARGE GAPS. [10:21] <brandon> if you just do this [10:21] <brandon> you'll make money on this one setup [10:21] <brandon> even in the crappiest market [10:22] <brandon> so with NVDA we have the big gap [10:22] <brandon> now we wait for the rest [10:22] <brandon> you can see that it held up and based near its highs for an hour or so this morning [10:22] <brandon> then we bought the breakout Brandon
[08:53] <Brandon> Something that you want too do [08:53] <Brandon> I have always thought [08:53] <Brandon> is that if you want to trade [08:53] <Brandon> you need to work with one or two setups [08:53] <Brandon> dont be the "jack of all trades and master of none" [08:53] <Brandon> because in the end what you really are is the master of none [08:53] <Brandon> you will do much much better to find a few setups you are comfortable with [08:54] <Brandon> and become very good at them [08:54] <Brandon> there will be times that setup is not working [08:54] <Brandon> and then you are just going to have to stand aside [08:54] <Brandon> but overal l [08:54] <Brandon> one setup will take care of you when your starting [08:54] <Brandon> once you know one [08:54] <Brandon> get a second under your belt [08:54] <Brandon> a third etc [08:54] <Brandon> but generally you want to stay with a small number of setups you know very well [08:54] <Brandon> you know them inside and out [08:55] <Brandon> so that the setup that looks great to the jack of all trades [08:55] <Brandon> you can say [08:55] <Brandon> hmmm [08:55] <Brandon> something is off [08:55] <Brandon> because you know this setup [08:55] <Brandon> well for me one of those setups is off the gap [08:55] <Brandon> and one thing i really like to see is a large gap up [08:55] <Brandon> and then for that gap not to be filled [08:55] <Brandon> Most gaps fill [08:55] <Brandon> and those that dont fill are telling you something [08:56] <Brandon> most likely they are screaming to you that they are strong [08:56] <Brandon> and you should watch them [08:56] <Brandon> you dont want to just go and buy [08:56] <Brandon> you have to have a setup [08:56] <Brandon> the stock needs to rest [08:56] <Brandon> and that rest best occurs with a sideways base [08:56] <Brandon> that is what we see here with SONE [08:56] <Brandon> it had a very strong gap up at the open [08:56] <Brandon> and then it based in a sideways manner for some time [08:56] <Brandon> allowing it to rest [08:57] <Brandon> when it broke above 7.57 which was the high of the base [08:57] <Brandon> we had our long setup [08:57] <Brandon> and with $8.00 being whole number resistence [08:57] <Brandon> that was the logical target area [08:57] <Brandon> just under 8