I just want to share with my 3 readers what Jamie, at Wall St. Warrior, has suggested me to work-on.
Earlier today, I posted a comment on Jamie's site inquiring about his entry point on his CMG trade made today. Here is my comment:
Jamie,
Re: your CMG trade...
How much of a concern for you that the prices might not go beyond the Lower Shadow of the Hang-man, at the moment of entry?
Because I would enter 2 bars later on this same setup, and I'm trying to understand what was going through your mind at that time.
Thanks!
And this is what he wrote...
The hanging man is a pretty strong sell signal. Once the HM was confirmed, I felt that price would take out intraday support and head towards daily support near Thursday/Friday lows.
It's all a balancing act. How many points in my favor versus the potential hurdles. I also liked the proximity of the declining 5 period EMA. Usually a stock sets up a reversal after it is has strayed too far from the MA and that is not a good time to enter, but can be a good time to lock in some profits.
In addition, Jamie also took the time to review some of my trades, and made the following recommendations...
I just read a few posts on your blog and I see that you are very focused on covering your shadows. If I may, I'd like to suggest that you try putting more emphasis on entering as close as possible to the 5 period EMA once your stock has established direction. That means the ema has a nice slope to it.
I am very grateful that Jamie actually took the time to check-out my blog, and to comment on it. He just did it out of his own time!! I am also certain that my 3 loyal readers also appreciate Jamie's input, which I'm sure that they will benefit from it too! Thanks again, Jamie!
Update: Jamie later also posted...
CDT,
Your welcome. Just to clarify the point I was trying to make.
On a flat or shallow base and break setup, I would cover my shadows. On a trending setup where there is a nice slope to the 5 period EMA, I look to enter as close as possible to the ema.