WIMI Trade on Oct 12, 2020 11:10 from Mance_Trader: Tradervue User Stock Trades.

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Conclusion: Lookout for Large Red Candles

Conclusion: Lookout for Topping Tails

Bought 5 min HoH
FPT $6.6, Stop set to $5.99
Stop Reset to Previous 5 Min Low
Stop Set to Max Loss
Stopped out

Low Volume on 5 min Green Recovery Candle


Execution detail:

Date/time Symbol Side Price Position
2020-10-12 11:10:15 WIMI buy $6.360 long
2020-10-12 11:10:15 WIMI buy $6.360 long
2020-10-12 11:10:16 WIMI buy $6.360 long
2020-10-12 11:10:16 WIMI buy $6.360 long
2020-10-12 11:25:36 WIMI sell $6.090 0


Comments

2020-10-14 07:43:52
 

Decent break-out attempt, if you're going to be trading BO's you need tighter risk. Personally, if I was trying this trade and it quickly came back down below the resistance level I would cut right away. Volume was also a tell here, it stuffed above the resistance and quickly rejected causing all BO buyers to be stuck at highs.

2020-10-16 12:26:22
 

Thanks for your analysis.

What do you mean, "the volume stuffed above resistance"? Do you mean that the red candle with the topping tail had high volume? How would that be a tell during the trade?

I saw this as more of a 5 min bull flag, not a breakout, but I see what you mean now. What made you call this a breakout, and not a bull flag?

2020-10-16 12:30:37
 

I mean that all the break-out buyers got bagged, the rigger was searching for liquidity to sell into. When the 1-minute candle can't even close above the resistance and there was high volume done, that means there's still clearly sellers at this level. That's what a stuff is, all of the break-out longs got stuck above and turned into sellers when the rigger was done with agenda.

2020-10-16 12:45:40
 

Thanks very much for breaking that down for me.

I definitely understand how if the 1 min candle can't close above resistance, that sellers are still present at this level.

The only thing I don't understand is the rigger. Was there a large seller manipulating the price, just waiting just above resistance? Could you please explain?

Cheers

2020-10-16 16:10:24
 

Not necessarily manipulating price, but rigging in a way to take advantage of the buying liquidity that comes with a stock making a new high; this liquidity being that shorts are stopping out and break-out buyers are stepping in. If a large player (some institution, hedge fund, bank, or large syndicate traders) has many shares to sell and doesn't want to cause premature weakness, then they can take advantage of this buying liquidity to unload their position. At that point its pure math and that is why volume is key, either the large player / rigger has too many shares to sell and causes the imbalance back to the downside or his order is insignificant compared to the long liquidity coming in.

2020-10-19 17:04:52
 

Ok, this is making sense now.

So basically, there could have been a large player who was waiting to sell a large portion of shares, but they didn't want to cause premature weakness, so they waited for a new high to sell, because the new high would bring lots of volume, therefore liquidity, and their sale could go through without too much disturbance.

But in this case, a stuff may have occurred, because the possible sale of a large portion by a large player may have been too much to go unnoticed, so the price pulled back.

Do I have it? I really appreciate you taking the time to tell me this stuff. It's new to me.

2020-10-20 22:03:07
 

Yes that is correct.

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