Friday, May 16, 2008

Qs review and a quick TICK

A strong technical day with the parabolics showing the way. I was scared out of the first parabolic entry just off the open as the 10/20 MA was not confirming. 11:15 to 12:00 saw the Qs bumping against the PP pivot, with the TICK in a modest upslope. Finally, just before noon the Qs broke above the PP. The NYAD 10/20 MA crossed right at noon and the TICK also closed above the PP - all bullish signals. With the parabolic BUY confirmed with a second signal at noon, the odds for a surge long improved dramatically with R1 as a likely target. The 10/20 MA remained open on the Qs and the NYAD until 13:55, which I took as a signal to exit.
Time in trade 12:00-13:55 = 105 minutes (21 bars)
Trade gain - 49.42-49.70 = .28
I regret missing the first trade entry at 10:10 which reflected an opporunity lost of about .25.
Nevertheless, I stuck to the trading plan, followed the signals and am flat at the end of the day.

Arun asked about the TICK a few days ago and Wednesday I noticed this picture perfect example of TICK tell behavior. This is just a partial chart on 2 minute bars, but clearly displays the dramatic change in the 10/20 MAs on the TICK, NYAD and Qs. When the signals line up in sync like this example its time to bet the short side aggressively. The more tactical approach would be to go short at 14:00 and then add to the short at 15:00. I like to close these swoons at the end of the day, but with the 10/20 MA showing air into the close, there's also a good odds that weakness will carry through in the subsequent open. I prefer to play it safe and go flat. Another tactic is to close 1/2 the position at the close, letting the remainder ride overnight and using your accrued gain serve as a cushion against a possible pop.

2 comments:

Unknown said...

I discovered your Blog last week and have visited everyday since. As a newbie Q's Trader, I just want to extend my Thanks for your time and energy to your Q's Blog!
What great information for someone like me, who aspires to trade with the knowledge and discipline you have! I will visit often!
Andrea
Gloucester, MA

bzbtrader said...

Andteita,
Thanks for the kind words. As a novice trader I suggest you read some of my old posts under the panel on the right of the blog "How I Trade." Since all of these are Qs setups, it may help you understand the technical indicators I watch and the jargon I use to describe my trades. The Fade, Gap and Trend posts should be of particular interest.
Good luck in your trading.