Friday, May 11, 2007

AV - A Trading Lesson

Some readers wanted to know how I use QuoteTracker in my daily activities so given that a picture is worth a thousand words I present AV on the 15-minute charts.

I filtered AV out the other day on a new, simple minded filter called 12 to 18 and rising which is looking for stocks that fall in the 12 to 18 price range and are rising over time. It was a good trade and when I find a good trade I tend to watch them for several days afterward. As a result AV was in my queue this morning.

It opened gap down and then dropped for another 15 minutes or so. I have QuoteTracker (QT) set up to show the bar in purple when the RSI(2) is less than 2. This is a critical point and generally is followed by a rebound.

Instead of rebounding the stock price fell through Pivot Support Point 1 (green line on QT). At this point I switched to the 4-minute charts in order to catch the turn.

This shows the 2 hours that surrounded the turn - as you can see the price bounced off the S1 several times and at 10:14 printed a green stick.

The green stick signaled the time to buy the stock which I did. It then climbed up to the pivot point. If I were day trading this stock I would have sold it here - instead I wanted to swing trade it so I set my stop at 13.70 (S1) and held the trade through the close.

Going back to the first chart you can see that it rebound off of the pivot point and went back down. Then at 12:15 it printed yet another RSI(2) < 2 signal - and a cross over (light blue bar) on the next candle.

And that is how I use QT - the pivot points are extremely crucial to my trading and the ability to flag the candles when they meet certain conditions enables me to make informed trades.

1 comment:


Nice colors in those charts.