Saturday, September 23, 2017

30 Minute Candles - Hikkake Setup

30 Minute Candles  - Hikkake Setup

Here is setup I look for that is based off the theory of trapped traders where inside bars are present.

The Hikkake trading set up is when an inside bar breakdown or breakout fails. The goal then is to enter as the breakdown/breakout traders are getting out of their positions as they help push the stock higher.

So Why inside bars?

Inside bars are narrow bars which means less trade risk. Traders look for inside bars as they lower their risk on the trade. (enter on breakout - stop is low of the narrow range candle or enter on the breakdown - stop is the high of the Narrow range candle)

With this setup the goal is still to trade with the trend but to catch those counter trend traders - who are looking to get in early anticipating the stock to have hit its top and will sell off.

For example. XYZ trend is long and the stock pulls back after a strong move up. An Inside bar forms and counter trend traders look to get short on the inside bar anticipating the top has been hit and the stock will continue to sell off.

The price trades below the low of the inside bar and the shorts enter - they place their Stop at the high of the inside bar. 

I will look to place a buy order at the high of the original inside bar  - where the shorts have their stops - as long as price is above the 5sma and trading in top 60% of the days range.

Theory is with the trend long, and shorts cover their stops at the inside bar, and more buyers coming in you get an extra strong push up. Trap traders will panic, yell OH Shit, and cover their positions helping fuel the stock higher.

Here are 3 examples - with this trade I wont move my stop unless 1R is hit. Goal is 2r - here are 2 winners and a loser. 




* The market direction refers to when the trade was entered. Up is all three SMA trending Up, down is all three are trending Down, Mix is mixed or choppy market to then refer to 200SMA for preferred market direction)

* You don't have to trade everyday. If the conditions don't feel right or if you're unsure of the current days trading environment then PASS on the trade. Missed money is better than lost money.  Day trading and the stock market is not a "war" that you must win at all cost. Trading should be fun, wait for only the good setups. Follow your rules, stick to your stops, and know that everyday the market presents a new chess board.

Saturday, September 16, 2017

30 Minute Candles - 4 Trades for the Week - 2 winners / 2 losers

Trade 1: ARR - strong gap up with volume and inside bar off the 5sma - ran out of steam and small .5R loss.
Entered off Bar #: 6


Trade 2: SIEN - strong gap up with volume and inside bar at bar 3 - nice explosion up for a 2R winner.

Entered off Bar #: 3


Trade 3: BZH - similar to above, strong gap up with volume and inside bar at bar 3 - nice explosion up for a 2R winner.

Entered off Bar #: 3


Trade 4: FSLR - strong gap up with volume but miss read the candle. The red counter bar was not a full inside bar. My entry bar was .02 larger then the previous bar. I eyed up the candle, an didn't use the Data box to confirm. Took a .5R loss as the stock jumped up and ran out of gas. I will take a red counter bar, that is not an inside bar, with a gradual pullback to support.

Entered off Bar #: 9


* The market direction refers to when the trade was entered. Up is all three SMA trending Up, down is all three are trending Down, Mix is mixed or choppy market to then refer to 200SMA for preferred market direction)

* You don't have to trade everyday. If the conditions don't feel right or if you're unsure of the current days trading environment then PASS on the trade. Missed money is better than lost money.  Day trading and the stock market is not a "war" that you must win at all cost. Trading should be fun, wait for only the good setups. Follow your rules, stick to your stops, and know that everyday the market presents a new chess board.

Disclaimer

I DO NOT MAKE RECOMMENDATIONS TO BUY OR SELL SECURITIES - I JUST POST TRADES I MAKE OR FIT THE RULES OF MY TRADING PLAN ON A DAILY BASIS. DO YOUR OWN DUE DILIGENCE - YOU ARE RESPONSIBLE FOR YOUR TRADES, INVESTMENTS, AND DECISIONS! ALL CHARTS COURTESY OF TRADESTATION, SCHWAb & TD AMERITRADE