Exited a short trade in CVX this afternoon, while getting lunch, rather than just keeping my stop in place. Entered later on 4c pullack criteria for 50-cents:
The SPY demonstrated the same setup. All I'm using the 3/10 macd for is to help me pick out price behavior; in this case a bear flag after downward momentum.
Below is a 3d setup (triggered end of day Friday) I was looking for this morning, but didn't enter. I've mentioned before that the 3d criteria personifies a short-squeeze reaction. This chart is a good example as price opened near resistance, filled the gap and moved beyond the sensible stop placement resistance level and continuing up to the breakdown point of the previous day:
I went long VLO on the 3d entry today (chart below) but it turned into a scratch trade. Notice the resistance level price needed to break to induce a squeeze reaction (blue horizontal line on the 15-min chart). Price failed to hold above the Open let alone get beyond the likely short entry stops. When 3d setups fail it's usually a good idea to turn the other way and go short!
The setups I include on this blog are used in conjunction with the 3/10macd and the criteria I ascribe to it as a way to alert me to an existing condition of price. The key concept to take away from this blog is that I try to anticipate what will happen on the higher time frame by using a faster time frame to trigger the trade setup. I do not trade a "system" I use two indicators to clue me in to price conditions. Please read the Disclaimer located in the sidebar of this site. I can be contacted via email at email@example.com
I am always open to questions, comments, or suggestions on how to improve this blog.