Day Trading PULM
Before we focus on 1 minute charts, step back and look at the last 7 trading days. Try to get a feel for the relative volumes for the current morning. At the beginning of the day today you could see the volumes were better than the last 2 days and similar to Thursday and Friday, big up days. So early on volumes were on par with what we look for. Next, set up a potential road map before the trading day gets rolling with Fib Projections over the recent period. One way I look at this is that the latest move began where I'm setting point A of the Fib Projection. With hind sight we can see the high of today ended with a 100% measured move based on the price action over the last 6 days, shown below.
Below, is the 1 minute chart for today with point A of the Fib projection placed at the open, notice the 1.618 Fib is right below 100% measured move from the previous chart. This could be a possible price magnet.
Now focusing on the beginning of the day we have a close up of the open. There is a very quick retrace to the .382 Fib (circled below), possibly a chance to get in, but I did not take it. I think price was moving too fast for me, I seem to be uncomfortable buying this soon in the morning when price is ripping. I can work on this, but for now I’m more comfortable waiting for more market structure to play out.
Another 1 minute PULM chart of today is below. After the initial blast off in the morning was complete there was another .382 Fib retrace, shown below as the first bounce of that blue 38.2% line. I jumped in off of this bounce when price got back above the 20 and 50 moving average (I circled my entry area). Similar to yesterday’s DRYS post I was forced to hold on as price pulled back and bounced around at lower levels then my entry. I sold in the area denoted by the 2nd circle and remained on sidelines for the rest of the day
Now the logic behind my 3.7 price target and trade exit. If you go back to the 2nd chart of this post you can find the 100% measured move of my Fibonacci projection was 3.69, the lower red line on the 2nd chart. That Fib was created off the first run up with point B of the Fib as the low point of the .382 retrace. This is an important measured move to me.
Also, on the chart below notice after 1:00 PM (13:00) volumes picked up along with price and then price and volume contracted with price getting close to the 20 EMA (red). I created another Fib projection off this move and found the 1.618 Fib was 3.71. This 3.70 price was showing up a lot.
This confluence of Fib projections helped me choose the exit. You may think this reasoning is some kind of convoluted alchemy and you may be right. I have posted about this a bit in my Price Targets post, but sometimes a trader needs a foreword indicator to provide a sell target at a higher price and this is just a way to accomplish this. So, this could be some kind of alchemy, but notice even after price rallied higher it came back and closed the day at this price magnet (3.7).
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