Yesterday we blogged how one of our underperforming traders improved his results.  Some of our Readers asked for examples and our trader obliged:

Hey Bella,

I’ve attached 2 charts – one breakout trade of SLB on 9/29 (10min candle chart) and one breakdown trade of AEM on 9/21(15min candle chart). The line on both charts indicates high/low for previous day. The moving average used is the 5ema. Below are what my thoughts would be on what I am seeing on the charts prior to taking the trade

1. SLB Breakout

• first candle strong, closes near high, and clearly above previous days high
• second candle pulls back leaving upper tail/wick indicating possible reversal but in relation to overall morning range pullback is only about 20% off highs
• third candle nearly erases the upper tail/wick of second candle, closes at high, and is an inside bar indicating consolidation near highs of the morning opening range
• third candle literally sitting on the rising 5ema moving ave providing support
• would look to get long above third candle/morning high
• watch the tape for confirmation

2. AEM Breakdown

• first candle trades down through previous day low and even though it leaves a long lower wick/tail the pullback looks to be standard 50% retracement off lows of the morning range and candle closes below previous days low
• second candle leaves long upper wick/tail and closes at low indicating weakness
• third candle bounces off the low again and leaves long lower wick/tail but is unable to trade back above 50% of morning range or close back above previous days low (possible resistance now)
• fourth and fifth candles close near lows with fifth candle closing on the low; also both candles are inside bars indicating consolidation near the morning range low
• fifth candle near downsloping 5ema providing resistance
• would look to get short below fifth candle/low of day
• watch tape for confirmation