|
|
|
|
March
13, 2005 Commentary (weekend edition)-
I am posting
this a little early because, as I mentioned, I'll be mentoring a student this entire
weekend. I wanted to get this up ahead of time if it was at all
possible.
The trading this past week has been just incredible. This is
becoming something I am saying almost every weekend in here. We may be out of
the range type trading in the indices that we have seen for the past year.
There just seems to be action and setups everywhere for me, on all timeframes.
The most frustrating thing for me with the members' service is deciding
what small percentage of what I am seeing to select out for posting. These are
truly great times for traders, in my opinion.
Today I am going to show a nice
setup that came together for me in BRCD last week, and is still going strong.
Let's look at a chart of the setup, on the 130-minute timeframe.


The traded timeframe was actually the daily,
but I'm using the 130-minute here for clarity. I have a potential 5-point
pattern, but my focus was really on the ABCD aspect. Notice two very key
things. I used a modified Schiff median line set, but I can't do those with the
software I use for these charts. I can duplicate the results by using another
technique, though, which is a technique I use regularly. I drew a trendline
across two swing-lows, the A and C points, and cloned it and keyed it off the B
point. I then did a 1.0 time projection. They hit at the same spot. Let's see
what happened from here.


BRCD hit the exact spot and started to drop,
giving me an excellent trigger. There was a small 5-point pattern/ABCD 'retest'
on the 15-minute timeframe, and then this larger pattern came in for another
'retest'. I had options to scale out of some as this started to form, ride it
out, or even add once the pattern completed and triggered. The methods I use
are clearly laid out in Kane Trading
on: Trade Management. Let's finish by seeing what happened from this
point.


BRCD is still dropping, and this one has been
a fantastic play so far. Regardless of what happens now (barring an upwards
market shock event with BRCD) this play is in a no-lose situation. The strategy
is to let a part of this run now, with the stop moved down quite a bit. Notice
the pattern that is now forming. What's the 'context'? What was my original
'context' saying? What may I be thinking?
Take a look at the Telecom sector,
too, as BRCD tends to follow that. (In fact, BRCD just led the index and tipped
me off to some plays in that. See if you can see the pattern in there that I
recently nailed.) They don't all work out this nicely, of course, but this is
what I'm trying to put together when I work on a setup.
The next
commentary will be next weekend's edition, posted by Sunday March 20,
2005.
 |
|
|
|
|
|
NOTE: Reading this page or
any page on the Kane Trading website, or utilizing this website and any
material contained herein in any way, shall constitute an
acknowledgment that you have read, understood and agreed to all
the disclaimers,
terms & conditions, and
policies of this site.
 |
|
This
website is best viewed with MSIE 6.0, text size set to medium, and screen
resolution set to 1024 by 768.
Copyright
© 2005 Kane Trading. All rights reserved.
 |
|