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This is the seventh video of the life swing trading example using the stock GCI. Idea is that you follow the trade evolution systematically learning to apply technical analysis techniques.
For trading GCI, we are using a chart template of which the last version is presented HERE. It is possible to be informed immediately when a trade is opened or closed. Click the RSS feed button at the top right of this page and follow the instructions. Otherwise you can also look at this page to find out about the latest actions. Every weekend, there will be a video update like this one commenting the past week using a simulated account and some preview.
We will use a weekly, daily, hourly and 5 minute chart. On these charts we will use a number of indications as shown in the template and as explained in training video 034.
This is not an invitation to trade this stock, information given is to be used for training purposes only. Stocata.org will not accept liability for any loss or damage which may arise directly or indirectly from use of or reliance on this information.
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This is the seventh video of the life swing trading example using the stock GCI. Idea is that you follow the trade evolution systematically learning to apply technical analysis techniques. Please note, this is not an invitation to trade this stock, information given is to be used for training purposes only. Stocata.org will not accept liability for any loss or damage which may arise directly or indirectly from use of or reliance on this information. Pay a visit to my website at stocata dot org and buy my book “Capturing Profit with Technical Analysis”.
Monday April 26 at 13:35 ET, the 5 minute chart breaks the last uptrend line. Price also breaks out to the down side of a wedge pattern, most probably here a top reversal pattern. At the top we have a confirmed top reversal bearish harami pattern in the candle chart. Price is far away from the averages. We open a short position at $18.71 with the next candle. We keep a closing price stop above $18.85. A historical Fibonacci projection from a previous top gives price targets around a previous bottom at $18.15. We are placing a sell order at $18.20. We expect an ABC wave correction. Let's see if the daily and hourly chart and the 5 minute indicators agree with a possible bigger correction.
Looking at the daily chart, GCI may have finished intermediate wave 5 and longer term wave (5). To take any action on the daily chart we will wait for a clear signal on the daily chart. But if this is a top turning point on the daily chart, we can expect a big down move.
In the hourly chart, we can see the start of an ABC correction. Price may have reached the top of the B correction wave. If price turns down here, it will move below the start of the A correction wave around $17.30. That is below our actual sell order of $18.20.
In the 5 minute indicators chart, all indicators are turning down from top overbought levels, confirming our action to open a short trade.
After the buying point, price moved up a little back to the resistance of the previously broken uptrend line. Next continuing the down move. The day after, only ten minutes after the opening, our short position was closed at $18.20. Since we are expecting a further down move, possibly after some correction up, we are not looking for a long trade, but rather waiting for the start of the next down move.
After the closing of our short position, price started an up move as a reaction against the big short term down move. April 27 at 11:20 ET price breaks the uptrend correction. We open a new short trade at $18.42. The reasons here are clear. Uptrend line broken, falling out of the up wedge pattern through the down side, now a continuation pattern for the down move, price bounces against the resistance of the 38.2% Fibonacci retracement and against the 50 and 100 bars average. In the following chart you can also see the condition of the indicators.
The indicators agree with the new short trade. All indicators are showing a hidden divergence with higher tops compared to a lower top in price. These points in the direction of a continuation of the previous downtrend.
We use the top and the turning point of correction wave (A) to make a Fibonacci projection down. This gives us price targets around $17.75 and $17.1. We can also create a pitchfork between the top and the (A) and (B) wave turning points. This downward angle is in line with the price angle down move from the top. Because we are expecting bigger longer term moves, we set a closing order at $17.15. Price staying within the pitchfork channel would be a good sign during the move down.
Price moved down to our sell target nicely within the pitchfork channel, staying below the 50 bars average. The position was closed April 28 at 11:30 ET at $17.15
IAfter price moving still a fraction lower, an up correction is started. Since there is more and more believe in a longer period down move, we do not want to open any long trade. Next price moves flat for some time. April 30 at 09:50 ET price drops through the support line after already falling through the uptrend line. Price also falls below the 50 and 100 bars moving average. If the indicators agree as you will see in the next chart, this looks like a good opportunity for opening another short trade. It is difficult here to draw a downward pitchfork. So we are drawing a pitchfork using the same angle as the previous pitchfork we used.
In the indicators we can see a negative divergence between the higher top in price and all indicators with a lower top. This points in the direction of a reversal down, confirming our decision to open a short position.
We now draw a Fibonacci projection, not from the last spike up, but from the next candle that corresponds also with a more solid previous top. The second point is a previous low. This gives a target at $16.90. We set a sell order at $16.95. If we do not reach this level we will try to close this position anyway to avoid having this short time position open over the weekend.
Price moved down and up again turning against previous support now resistance and against the upper side of the pitchfork channel. Then fell to our selling target. The position was closed at $16.95. All trades are mentioned in the trades' overview.
But also looking at the hourly chart there was a shorting possibility. April 27 at 10:30 ET we opened a short position at $18.3. Making use of a last possible pitchfork and a historical Fibonacci projection, we set a selling order at $16:30.
All indicators are overbought and turning down now, confirming our short selling decision.
This position is still open. Price has now fallen below the 200 hours average, most probably on the way to our target.
The results of this trading week are added in the table. There is now almost 40% profit in less than 6 weeks time.
This is the end of last week's overview swing trading the stock GCI. Idea is that you follow the trade evolution and that you systematically learn applying all technical analysis techniques. Tell your friends about these videos and while visiting my website at stocata dot org, order my book “Capturing Profit with Technical Analysis”. See you in the next video.
Risk Disclosure: Futures and forex trading contains substantial risk and is not for every investor. An investor could potentially lose all or more than the initial investment. Risk capital is money that can be lost without jeopardizing ones’ financial security or life style. Only risk capital should be used for trading and only those with sufficient risk capital should consider trading. Past performance is not necessarily indicative of future results.
Hypothetical Performance Disclosure: Hypothetical performance results have many inherent limitations, some of which are described below. no representation is being made that any account will or is likely to achieve profits or losses similar to those shown; in fact, there are frequently sharp differences between hypothetical performance results and the actual results subsequently achieved by any particular trading program. One of the limitations of hypothetical performance results is that they are generally prepared with the benefit of hindsight. In addition, hypothetical trading does not involve financial risk, and no hypothetical trading record can completely account for the impact of financial risk of actual trading. for example, the ability to withstand losses or to adhere to a particular trading program in spite of trading losses are material points which can also adversely affect actual trading results. There are numerous other factors related to the markets in general or to the implementation of any specific trading program which cannot be fully accounted for in the preparation of hypothetical performance results and all which can adversely affect trading results.
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