Friday, March 4, 2011

Not so surprising Finish on DOW

Orright I must confess I have seldom traded the DOWJones successfully in the past, due to running too small an account, being nervous and having little clue.
Recent advancements in personal trading n understanding had me watching it last night, recent resolve to back up my analysis n what I see with a position set me right, for my first trade on this beast in about three months...

the below chart shows wht I was watching as i prepared for a long entry near close. and the targets n setups I used.

 (5 min chart)

First up I began watching round the red ellipse on price...

Heaps of time for me to mark out the wave counts while I did, and with price toying with a level of historical discerible support, I saw every reason to attempt a long.
The little green arrrow shows the bar on which I entered longs, very short term break of  previous bars cluster and a break above the 21 MA, Long... IMEDIATELY
Bit of a closer view:
Releatively easy low risk stop as marked below previous low.

First target at first historical resistance (little red arrow, n took off 2/3 which paid for my stop, and set a target up at more historical resistance at base of 3.

Walked away, came back to moulah.

Recap of reason for entry..
completed discernible 5 wave down count. (VERY important)
Basing style price action
Esoteric (ish) MACD Moving average divergence (lwer lows price, higer lows maves)

New localised high at lower level of basing pattern..ENTRY!


Reasons for exit...

First exit, using the same historiical time that provided support to provide resistance/target.. Premature to a degree, as you can see by total exit a far nicer high 5 mins before close.  (Perhaps a little lack of faith in myself, perhaps smart conservative, plus, just more comfortable if I have paid for my stop (total trade would not have cost much if stopped out)

Second exit, big localised resistance level, timespan of chart and trading style... scalping.. No real confirmation of full blown trend worth following for longer yet.

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