Intraday Trading Tactics
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Figure 6.13 shows a Level II screen of Gillette, which is traded on the
NYSE. At this point, the stock shows the potential of becoming a
high-probability short. There is an uptick, so the short trade can be
made. The stock is sold short at 12:11 P.M.
The strategy that led to this decision was based on technical
factors. First, the five-minute chart shows that the stock had a parabolic
run, putting in a rounded top just below 42 1/2. At this point the
stock looked like the momentum had run out. If Gillette fell to the
17-period EMA or below, the reward-to-risk ratio would be acceptable.
The 15-minute chart also showed a very small high-low range
bar, just under $42 1/2. Gillette also had a strong support level at $41 3/4.
The S&P 500 at this time looked weak and began to turn down sec160
the strategic electronic day trader onds after the short position was taken. Figure 6.14 shows the Level
II screen just after the short position was covered. The stock was
bought back at $42 13/16, and seconds later, Gillette began to rally back
to resistance at $42.
Figure 6.15 shows a five-minute chart of Gillette. You see the
parabolic run beginning just prior to 11:30 A.M. The rounded top formation
occurs between 11:35 and 11:45 A.M., followed by a penetration
of the 7-period EMA and subsequently the 17-period EMA.
Figure 6.16 shows a 15-minute bar chart of Gillette. Note the parabolic
run and the high-low range bar at the top. This confirmed the
possibility of a reversal.
Figure 6.13 shows a Level II screen of Gillette, which is traded on the
NYSE. At this point, the stock shows the potential of becoming a
high-probability short. There is an uptick, so the short trade can be
made. The stock is sold short at 12:11 P.M.
The strategy that led to this decision was based on technical
factors. First, the five-minute chart shows that the stock had a parabolic
run, putting in a rounded top just below 42 1/2. At this point the
stock looked like the momentum had run out. If Gillette fell to the
17-period EMA or below, the reward-to-risk ratio would be acceptable.
The 15-minute chart also showed a very small high-low range
bar, just under $42 1/2. Gillette also had a strong support level at $41 3/4.
The S&P 500 at this time looked weak and began to turn down sec160
the strategic electronic day trader onds after the short position was taken. Figure 6.14 shows the Level
II screen just after the short position was covered. The stock was
bought back at $42 13/16, and seconds later, Gillette began to rally back
to resistance at $42.
Figure 6.15 shows a five-minute chart of Gillette. You see the
parabolic run beginning just prior to 11:30 A.M. The rounded top formation
occurs between 11:35 and 11:45 A.M., followed by a penetration
of the 7-period EMA and subsequently the 17-period EMA.
Figure 6.16 shows a 15-minute bar chart of Gillette. Note the parabolic
run and the high-low range bar at the top. This confirmed the
possibility of a reversal.