Shared by:
johnc_BOWS
I took this as a bear flag on the daily. Was looking for a quick scalp, but I missed the flush to .43 because I wasn't paying attention. That's what happens.
2/9: I'm changing this from a type 2 trade to a type 4 because I should have known better. Refraining from trading extended stocks has been a rule of mine since September, when I was still papertrading.
Execution detail:
Comments
Rashod81_BOWS
Ok, I can see the support and why it would be tired from the day's run down. I'm also looking at the volume, does the number of red bars indicate less shares available to sell or the size?
johnc_BOWS
Hey Rashod, both size of the bars and the number of them in a row are important. The green and red bars don't really tell you exactly how many buyers and sellers there are, they only tell you who won at that time. So sometimes you might see a huge red bar and get excited, "OK time to short!" But if you looked on a closer time frame, like a 2-min or 3-min chart, you'll see huge green bars followed by red... meaning that there's still a battle between the bears and the bulls about who controls price.
As Kunal teaches, price is more important than anything. For the base breakdown I have here on $LH, I started with price action: bear flag on the daily so look for a bear flag intraday OR base forming that $LH won't be able to hold. Here's what it looked like on Think or Swim: http://imgur.com/b2z0nMr
The yellow arrow is where I entered. See how it was flagging before that? Look at the volume. The green bars were getting smaller and smaller. That means fewer and fewer buyers are around to push price up. You also ideally want to see the bars above that yellow line (which is the average volume that the stock trades at.... in this case 4,116.94).
Feel free to look at my trades on http://www.tradervue.com/shared/users/3056 on a few of my shorts, you'll see the red bars are around the same size as the green, but the price bounces on the green bars are getting lower and lower. Essentially, it looks like the buyers are still in it, but they're bidding at lower and lower prices, and then it gets to a point where you don't see people buying above a moving average or a specific price resistance level. I'll sometime short even if the red and green bars look kind of in balance, as long as price action looks like it has hit major resistance levels. But ideally, you just want to see more red than green (i.e. bigger and more of them in a row).
Your eye will teach you a lot more than words can. Kunal said looking at a million charts is what made him so good. Whenever I look at other people's trades, I often pull them up on Think or Swim to zoom in and analyze it step-by-step. Feel free to look at my mistakes and successes on Tradervue http://www.tradervue.com/shared/users/3056 You'll learn a lot by pulling up the charts on your charting platform
LOL wrong tab. I meant to answer your question in this thread: http://www.tradervue.com/shared/trades/757479
markmandy54_BOWS
Solars kick my ass.
You need to log into your Tradervue account to leave a comment. If you don't have one,
it takes
just a few seconds to sign up, and it's free!
mmmm its a bit tired here and also on support on daily