I didn't bank on either of these, so I'm a chump, but here's a set up I've seen a couple of times recently that I really like. These are fairly big names or at least big volume which allows you to get a fair sized position and be able to get out of it for a very small loss if the move doesn't work.
What these have in common is they are big names that gapped down and then in the last hour of trade consolidated in a very tight pattern before rallying into the close.
QCOM I should have had. I was in at 68.51 and for how much I liked this idea was crazy to get out at 68.49. It's good to keep losses small but that is not even giving it a chance. I wanted to be right -- right then.
(looks stupid on the 10 min chart, wish i had 1 min available but whatever, here is the chart)
Saw very nearly the same thing in HTZ Friday and I'm fairly furious I didn't bank. I certainly tried. I took a few entries but always got shaken out. QCOM was cleaner because right before it rallied it was holding the .50 level strong. I could have bought, put a stop at .45, .48, and waited.
The setup was this was a fairly big name, high volume stock, that gapped down, consolidated at a clear price the last hour, then rallied.
But HTZ was much harder. The level was was 20.50. But it went down and printed 20.45, then up to 20.60, then printed .52, THEN went.
This one was less clean but the principle is clearer on the 1 min chart. I'm a very short term trader and I hate "taking heat." Everyone is a genius in hindsight and yes, with a stop below 20.45 this would have worked gangbusters. When I have faith in an idea, I should give it a little wider stop.
When will we see this set up again? I have a feeling it will be awhile but if we do, I'll certainly be happy to take a bit more risk on it, because it's a pattern I've noted recently and the upside is certainly there.
This is the internet and I expect nonsense and derision in response. I work at a prop firm, I was taking a crack at this with 1000 shares. I understand these things didn't rally for days and points. I understand my stop was too tight. The basic concept is this is a clear set up, clear level, clear risk with 4-5 times the potential reward, and that's what I look for.
What these have in common is they are big names that gapped down and then in the last hour of trade consolidated in a very tight pattern before rallying into the close.
QCOM I should have had. I was in at 68.51 and for how much I liked this idea was crazy to get out at 68.49. It's good to keep losses small but that is not even giving it a chance. I wanted to be right -- right then.
(looks stupid on the 10 min chart, wish i had 1 min available but whatever, here is the chart)
Saw very nearly the same thing in HTZ Friday and I'm fairly furious I didn't bank. I certainly tried. I took a few entries but always got shaken out. QCOM was cleaner because right before it rallied it was holding the .50 level strong. I could have bought, put a stop at .45, .48, and waited.
The setup was this was a fairly big name, high volume stock, that gapped down, consolidated at a clear price the last hour, then rallied.
But HTZ was much harder. The level was was 20.50. But it went down and printed 20.45, then up to 20.60, then printed .52, THEN went.
This one was less clean but the principle is clearer on the 1 min chart. I'm a very short term trader and I hate "taking heat." Everyone is a genius in hindsight and yes, with a stop below 20.45 this would have worked gangbusters. When I have faith in an idea, I should give it a little wider stop.
When will we see this set up again? I have a feeling it will be awhile but if we do, I'll certainly be happy to take a bit more risk on it, because it's a pattern I've noted recently and the upside is certainly there.
This is the internet and I expect nonsense and derision in response. I work at a prop firm, I was taking a crack at this with 1000 shares. I understand these things didn't rally for days and points. I understand my stop was too tight. The basic concept is this is a clear set up, clear level, clear risk with 4-5 times the potential reward, and that's what I look for.
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