Here's an excerpt from the Traders Live! chatroom on MCOM -
Although I cannot presume to speak for him, in my observation of his trading, Smart$ typically waits for consolidation areas and then enters resting buy stops (don't know if they are mental one or ones entered into the system) and sell stops to trip into the trade. So when MCOM made that consolidation, the narrow sideways range in the first hour on the 5M chart for what seemed to be an eternity, he was ready to go long if it went up and ready to go short if it broke down. I know it sounds easy in theory but it's not, since I have never been able to do the Stop and Reverse trade myself with any success. Note how Smart$, while he makes conjecture about MCOM's immediate direction to pass the time as he waits for the market to tip it's hand, trades ONLY what the market tells him, only what he sees on the screen.
10:36 am EST - Smart$: [Posts 5M chart of MCOM, last at $54 1/16]
10:37 am EST - Smart$: I'm waiting for a setup in the above....
10:39 am EST - Smart$: I beleef that MCOM is one of those He Said [another trader on the chat] buy the open plays where he would now be, as gumpus [nickname for me, She Said] artfully says, "sweating bullets and shitting bricks." ;-)
10:41 am EST - Smart$: gunner -- it can coil a bit tighter but zing once it tips its hand... I was alerted to this one by someone at SI who said "this one can't go any higher so I'm short it" and I thought there's prob. still plenny of uppage left here ;-)
10:42 am EST - The Quant: S$: There are a lot of people short that MCOM (duh) - do you think that the action this morning was capitulation?
10:50 am EST - Smart$: quant -- naw, those shorts should feel a lot more pain first...
10:53 am EST - Smart$: I beleef they need to bring it in to test a more orthodox dip point....
10:56 am EST - Smart$: Folks have gotta realize that every direct-access player in the universe is all over MCOM... if you don't have execution/confirmation AND the skills to read it, theyre gonna walk away with yer wallet.
11:00 am EST - Smart$: That's an expansion bar to the 20 ema...[Posts 5M chart of MCOM as it dips to test the 20EMA5 at $53 ¼]
11:04 am EST - Smart$: Of course webB is working fine since they did all of ma and pa's orders over an hour ago...
11:05 am EST - She Said: Can you say "parabolic"? Volume dropping over the last few days.
11:11 am EST - Smart$: gumpus -- it's exaggerated without the log scale, but yeah, MCOM is up a tad recently ;-)
11:14 am EST - Smart$: It would be nice if today were the day that they drew a massive dark cloud in MCOM.... on the daily I mean.
11:24 am EST - Smart$: expansion bar thru the morning's low...[Posts 5M chart with prices last at $51 ¾]
11:24 am EST - She Said: S$ - I think MCOM is already losing momentum since volume is already going down...
11:25 am EST - Smart$: they're breaking it down here... i think we just may get that daily dark cloud, lol.
11:27 am EST - Smart$: expansion bar #2... these are what I call "panic bars"[Posts 5M chart last at $48 11/16]
11:32 am EST - Smart$: I was long MCOM at 53.06... scratched it at 53.18... ;-)
11:35 am EST - She Said: S$ - Awwwhhh, I thought you were short with the spike and ledge and all...
11:38 am EST - Smart$: [Posts shot of his order entry screen, showing trade confirmations of a buy at $54 1/16 and a sell at $54 3/16 and THEN a short sale initiated at $53 15/16, with a stop loss order entered to protect profits on the short sale, but price blacked out.]
11:41 am EST - Smart$: Can't let those darn makers find me... ;-) [Referring to blacked out stop loss order price]
11:41 am EST - She Said: S$ - Oh...a death defying SAR [Stop And Reverse], then?
11:49 am EST - Smart$: Um I meant 54.06, 54.18... naw wasn't death defying, purely rational ho hum stuff ;-)
And then he followed it all the way down into the low $40's, allowing for a bounce for the bear flag and all…
Smart$, The Quant and I are all regular hosts at the site.
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