the Bankrobber's DVA Trade

I was digging into the Bankrobber's Davita short yesterday while watching the market and as I often do, trying to see when and why he makes the decisions he makes. As is typical, he waited until after the turn to get short and he covered at $83.01. So, why did a guy who has an uncanny ability to sense changes in direction choose to exit nearly twenty five minutes before the end of trend and leave 57 cents on the table?

The chart on the right is his post. The chart on the left shows a Fibonacci overlay (in blue) of the full trend he was playing, with the bold green and bold red lines highlighting his entry and exit respectively. What you see is what I've seen many times when I apply Fib lines to Scott's trades: His moves will often coincide with Fib levels, in this case he exited on the 23.6% line. You'll also note that price retraces to this same level later at 12:19pm, further emphasizing the importance of this level and his choice to exit.

Scott has stated explicitly that he does not use Fib lines in his approach. What this chart and many of his other charts I've studied shows is that he "senses" Fib buying/selling activity by traders at these levels and acts according to his best interest.

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Let me be clear, I do not believe there is anything magical about Fibonacci levels and I don't go for the mystical horsesh*t that some heap upon Fibonacci. The levels exist solely because of self-fulfilling prophecy. But, they do exist and he knows them when he "sees" them.