Wednesday was a slightly profitable day. I had the wrong idea on a lot of stocks but I cut those off for flat because I took a step back and said "If I wasn't in the trade already, would I get in?" And the answer in both cases that it happened was no. That was a good choice both times. As for why I was biased the wrong way - that is something to discuss below. Other than that, something else to discuss is the differentiation I have to make between big picture ideas and the scalps that can still be good "paycheck" money. I think I will start doing more of these breakout/breakdown setups with bigger size and tight stops. I thought you wanted to give things more room to work.. That's absolutely true. However, that will be on my bigger picture idea trades. On these breakout/breakdown trades, I think a tighter stop is warranted because you are looking for immediate followthrough every time and if it doesn't you run the risk of it being a fakeout. I usually hate buying breakouts/shorting breakdowns for these obvious reasons but in certain cases, with a tight stop, they can be useful and provide added profits for relatively low risk if they work. Also, they don't necessarily have to be scalps. They can provide a method to enter a stock at the open or at other points throughout the day. The other thing I want to touch upon is that while you may be open to these new breakout/breakdown plays - don't forgo your other setups like buying a good earnings winner at the premkt support and a bunch of other things you have learned like the vwap dip and rip (vs. just buying at vwap). The biggest key is to stay in the present moment so that you can identify the specific setups that you like and the market is providing you. The last point in the intro that bears discussion is the fact that everything is a probability. Nothing works 100% of the time. However, I can reasonably say that the setups I have in my playbook more often than not when used in the right scenario.
LLY: I didn't have a bias in either direction on this but was willing to play a good pattern/setup within it. The one thing to note right before the open it flushed the premarket support and then got bought back up on huge relative volume. Of course that didn't have to mean anything but I guess that was a bullish sign. It would have been nice if it retested the low at least but it just went to the small support area above $64 and that was the low for the day. After that, I didn't really see a pattern or anything on the way up. The only thing was buying it at the open potentially due to that huge volume fake breakdown but I'm not really into that as that is more sketchy. What I did do was short it at $66.50 for it to at least retest vwap after a decent move up. I figured it would rest and pullback at least before it potentially moved higher (if it did). It wasn't just the premkt resistance that gave me that level, the L2 was also seemingly confirming that it was hard to breakthrough that level. I did it with smaller size in case it wanted to go higher a bit before coming back. That is what it did as it went to the $67 almost before coming back down. I had a decision to make as to whether or not I would want to stay in the trade or just get out for flat. I decided that it was best for me to get out and reevaluate and see if there was more confirmation it wanted to top out there. I said to myself what I mentioned in the intro and I just got out/If I saw the .50s level be a top again I would have tried it but after my breakeven bid got hit I realized I was confused about this particular scenario and the best thing to do would be to wait and see for more clues. There was a $66 bid that really was refreshing, I put a stop order to short underneath it but it just held instead. Bid absorbs like that are tough to buy in front because you don't really know your slippage. The other setup that I missed but would have taken was the vwap test on $66. Not only did you have a refreshing bid there but it was right at vwap too. It just kissed vwap and then went to new highs. So that is another thing to keep in mind of - staying in the present and keeping an eye on things throughout the day.
JUNO: I was pretty short biased on this because I felt that a lot of air was going to come out of the stock. I thought that this stock had a lot of hype around it and now with the patient deaths, it would start to fade off. One thing I want to discuss before I go into my trades is that this is similar to CLVS on the day the news it. It seems that the pattern for these stocks is to dump at the open, then get a bunch of shorts in, squeeze them higher, then either consolidate or go lower the rest of the day. That is something I forgot but will now remember on something like this going forward. Another thing to note is that I found out there was prior news on this stock in July. The first day of news was when the FDA put the trial on hold due to deaths, which is more serious than the company itself putting things on hold, which happened this time. The next week in July, though, the company got clearance to start again after they changed something but the stock faded after the gap up. So when the FDA does something - that has more effect than if the company does it, it seems. Anyway, I avoided it right at the open because I wasn't sure what was going to happen and I didn't have a strong enough bias to just short on any pop etc. It popped at the open then faded off. I saw the big volume washout at the bottom (which of course doesn't mean it's the bottom), but it offered a decent long opportunity based on what I said earlier about how these stocks trade. What I did actually try was short it against vwap. I thought it could head lower but then I did the same exercise I did with LLY: "If I wasn't currently in the stock, would I get in?" The answer to that question was a resounding no so I am glad I had the discipline to just get out for flat. In fact, I even thought it could be a decent long where I shorted, which it ended up being, although I was unsure at that point what was going on. It ended up going to some decent resistance from the prior two lows on the daily, which is where it stopped and where a decent short could have been had. At that point I remembered CLVS and how it squeezed how so I wasn't sure if it could go higher so I just avoided it. The other trade I took was when it came off a little bit and was holding under $22. It looked like it could squeeze higher so I put a buy stop above $22. It triggered and I got filled at a good price and it just shot up 40 cents. I thought about taking half off in the 40s in case it failed but it really seemed like it could go higher. I held onto it and then it just came back down and I stopped for a very tiny loss. I think it was mostly greed in this case although if it had gone up I would be saying nice patience so it's tough to say. But I was unsure, so at the very least I could have taken some off and possibly readd if it broke 50s. The last trade I made on it was later in the day when I thought it could fade off. It broke some support and then retested it so I shorted it then but it just went higher and so I got out after giving it some room. I'm not sure if it was a good trade or not - after I got out I thought it was a "basic bitch" trade that everyone can take so it doesn't work. But that's just hindsight speaking I guess. The problem basically is - I don't care if it didn't work if it was a good process. The thing is I don't know if that was a "good" trade. But I can't go into deep analysis over something like this. It's not a big deal in the long run.
NUGT: Basically missed the vwap test and fail but shorted the base break and then added on another base break because it seemed that NUGT was looking for new lows. I probably should have played DUST due to its price range but it's ok. I put a trailing stop that got hit but I thought it was mistake since I thought it could still go lower to $7. This was similar to SIG. I put in a stop below another base that formed but that ended up not triggering and where I got out ended up being a decent cover I guess.
Other stocks:
DE: I was long biased but it didn't really set up nicely for a long at any point. The only note I want to make is how I thought about buying at vwap but the chart seemed like it was toppy so I avoided it. This ended up being a good call because it flushed lower but then reclaimed vwap. So this was a vwap dip and rip, which I forgot about since I was so focused on buying at vwap directly. So just something to keep in mind. Also, for a stock like DE that isn't a momo name like NFLX and AMZN, with it already having a nice gap up that is far above its usual range, is there anymore upside intraday? That is another thing to consider as well and to keep in mind going forward - maybe look for topping action for a short.
BIIB: This almost hit vwap but even if you didn't get in there it offered a nice ABCD to get long on dips and sell into the ramp. JUNO wasn't cratering so this could offer a nice bounce.
Things to remember/work on:
1. Remember the vwap dip and rip.
2. You are looking into new patterns of trading which is fine. Don't forget everything else.
3. Stay in the present at all times.
4. Remember how JUNO/CLVS react on similar news. Also if the FDA does something vs. the company itself then it's a lot more impactful.
5. "Would I be in this now if I wasn't already in it?"
6. Remember that everything is a probability.
7. Recycle shares when unsure. In the JUNO instance, you could have sold some in the .40s then relong if it breaks out above .50 with a tight stop (in case it was just gunning stops).
8. Something completely irrelevant to today's action but I just saw a good instructional video on it. On TSN on Tuesday, you could have kept it on watch because it offered a nice consolidation to go long/short off of. I would have been long biased due to the fact it was a green candle on the daily after a gap down which usually means they get bought up afterwards. Anyway, it had a nice consolidation and you could have bought the dip to support from yesterday and then with the clear breakout above $58 put a buy stop in front and ride that for almost $2 with bigger size using house's money.
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