UPDATE: Entered desired amount of SWHC at 5.91 today. I am in HALF size. Possibly a good spot here. Stops are in at ~5.48ish. Next entry will be at breakout = 7.0, where I will enter FULL size.
Could you define "stops" for me? Is that the price you would get out at if it fell there or is it the absolute lowest point of entry?
there are multiple types of stops. The simplest one is the stop market. When current price = stop price, put a market sell order or buy order.
"Stops at ~5.48" means I am getting out if it falls below 5.48ish. I say "ish" because If it hits 5.44 or something like that and start to bounce, I don't want to be shaken out. You MUST have stop orders for every trade. You can not assume any trade will work for sure. Like I keep saying in this thread, there are no such things are guarantees. If circumstances have changed, and the reason you are in the trade ceases to exist, GET OUT. Re-read some of my posts, because I bring this stuff up a lot. Whether you become a profitable trader or not won't be determined by how these patterns pan out. Some will work, many will not. What matters is how you trade them. And that means effectively managing your losses, and giving your winners enough room to run. The most fundamental and basic tenants for ANY good trading strategy.
Honestly I have no idea when and where the "handle" will complete. I know how it should pan out, but no one knows how it will pan out. The only thing you can do is get in at a good price. Give it some room. And put in a logical stop. If it works, great. If it fails, move on. This is what I have done for this trade, and for all of my trades. One other thing I like to do is average down when a trade gets close to my stop. ONLY do this if you can actively manage your positions, otherwise it is a great way to get slaughtered. If you are new to trading, ignore what I just said completely.
Do you use a physical stop or a mental stop? I've been alot more profitable using mental stops. Most of the guys on the trading floor here use mental stops as well. Reason I don't use physical stops is because I realized the market maker is a mean old SOB.
I do program trading in the mornings and afternoons, so most of the time I can't watch my swing positions tick by tick. In this case I use a Server-Stop. All stops used at our firm are put on a dedicated server. This is to insure the quality of execution. But more importantly, it is so that they are invisible to market makers and specialists. I also have alerts that go off when positions reach certain preset price points. If I am not busy at the time, I would cancel my S-Stops and trade them manually.
Speaking of Specialists and Market Makers... Do you ever key off of strange pricing that might occur and possible accumulation? Examples: LoD for SSO is 29.7201 LoD for DIG is 27.7110 Rather than let both SSO and DIG drop to the next lower cent, the fractional pricing was done and the turn happened at that price.
Absolutely. If you plan on holding for more than a week, I would avoid any ultra short ETFs. Mathematically, they lose value over time no matter which way their underlying indices are going. This is due to daily rebalancing to maintain their leverage ratio. For that matter, I wouldn't touch any leveraged OR short ETFs PERIOD. The short ETFs are worse than the long. The more leveraged ETFs are worse than the lesser leveraged. And the most volatile underlying indices are the absolute worst. So something like... 3X Bear REIT fund would be the winner in the race to 0. I would avoid them unless you are daytrading, or holding for less than 5 days. If you are simply bearish on the market, just straight out short it. Short the SPY, QQQQ, or DIA. Or just find some of the major components and short them individually. Timing the market is hard enough on its own, you don't need some artificial value trap eating away your gains in the meantime.
Heh, I've quit daytrading individual stocks a long time ago(ever since I graduated from the training program). That is a skill that few possess. And I commend any who are consistently profitable in that pursuit. I talked about this in the Stock Market thread in a post regarding scalping. Before the NYSE went hybrid, it was easy for traders to key off of specialists, market makers, large buyer/sellers. Their actions were obvious and clumsy. A nimble trader could spot their moves, and step in front for easy profits. Now with electronic trading, this can no longer be done. Large orders can be masked, crowd buyer/sellers can hide. For that reason, I've given up on deciphering the specialists/MM's movements. Let them be, as long as they leave me the hell alone.
In the past few days, I have closed a few of my positions, mentioned initially in this thread. Also, there have been a few note-worthy moves. However, since there doesn't seem to be anyone here who actually followed me into them, I didn't feel the need to bump this thread every time I made a trade. Now that they are piling up, I will consolidate them into one post and do an update later today. In the future, if some on here are actually following my trades, I would gladly update more diligently. _________________________________ Before that though, I have a possible new trade I wanted to get out before the open. Again, like the BCRX trade(which I will update) this isn't anything great. Well, let me rephrase. This isn't a longer term setup. I can't really call these bad, since I did make nearly 10% on BCRX intraday before covering most of my position. Note: Most of the setups I will post here will be medium-term trades. Meaning, meant to be held for at least ~1 month. I would define a long-term trade being ~6 months and up. A short-term trade being 1-2 weeks or less. With everything in between being gray. The reliability of the setup generally increases the longer the time frame. The reason why I won't be posting too many long-term trades is because they are simply hard to come by. If I find one, I'll be sure to let you know, since they do tend to work the best. The reason why I won't be posting too many short-term trades is because they are simply too numerous. If I posted every one of my day/short-term trades, I would be spamming the Hangout, and you wouldn't be able to decipher through the noise. This is why I will only pick the best of these. With that said, this trade will be an ultra short-term setup. I will put on some real size in it the day it breaks(maybe today), and if everything works according to plan, I will be out of most of it in the afternoon. So essentially it will be a daytrade. Like my core position was for BCRX. But a good one, hopefully. The stock in question here is HGSI. There was news in it recently, prompting the large gap up. Subsequently, it rallied for two more days, before settling into a consolidation pattern, as volume dried up. This is a pretty classic Flag/pole style setup. The time frame of its formation has been around 1 week, so I am only looking for a 1-2 day move upon breakout. Resistance is at ~15. It is trading currently at 15.10 pre-market, and I have entered some at this price. This however is not an accurate indication, so I will wait for the open for further action. During its consolidation, it has attempted to break ~15 twice, failing both times. However both these days came on heavy volume. This tells me there are buyers behind it, and that it is only a matter of time before resistance is cracked. At the same time, it tells me to use tight stops, because a failure is not out of the question, as that has already occurred twice. In any case, I am waiting for the open, and buying above 15. Use tight stops and trade carefully.
Read my post. I wrote that I entered some pre-market at 15.10. it is trading at 15.00 currently. Use tight stops. EDIT: Buy through resistance, so now that it is trading below it, wait for a break. Although this stock is prone to failure, and whiplash. Also the book seems thinner than I remember. The last time I traded this stock was 7 years ago though...
Yeah... trading this one tightly...stop at $13.98. The drop following the resistance break appears to be on declining volume though.
That's actually giving it a lot of room. Mine is a bit tighter. I am not planning on holding this more than 1 day after a breakout(may or may not be today).
So after getting whipped around a bit in HGSI, I decided to re-examine its chart. I may have made a mistake in determining its resistance. It is possible that those 2 "failure" days weren't that after all. They may be the pivot points for the actual resistance, which may be an upward sloping trendline. If that is the case, trying to trade it through 15 will be futile. This trade is getting a little more complicated than I have hoped, so I am going to sit this one out for now. I am out at 14.85. I will watch how it reacts to 15 when it gets there, and then at the upward trendline, which seems to be at ~16. Sorry for the possible false alarm.
BTW ... it seems HGSI is on a good old fashioned stepped uptrend pattern -- gap up and consolidate, rinse, lather, repeat. I decided to stay in and that turned out to be a good decision after all.
The plan has not changed. I am in as much as I want to be at the moment, and do not feel the need to add any more here. My stop is still at ~5.48. It either stops me out, or starts heading higher. I will enter more if it breaks above 7.0. ____________________________ BTW sorry guys I have been busy/lazy. I intend on updating some of my previous trades, since I've closed most of them out already. Also I have a new trade, one which I have already started to accumulate. It is GLD. Don't worry, it hasn't broken out yet, I am just jumping the gun a bit to get a better average. I will update it and provide my analysis, sometime, soon, hopefully.
