Today was a decently profitable day. I only had two trades - I had some other ideas that worked and some that didn't. A lot of things didn't have much volume so I didn't bother with them although they worked anyway. The changes I made regarding vwap and using higher timeframes are definitely helping. I still have to continue and implement the processes and mentality in Trading in the Zone but that is a work in progress.
BHI: I almost didn't have this on watch since I wasn't sure what to do with it but I put it on watch since it was in play and had range/volume. I saw it just tanked out of the gate which signaled to me that it was pretty weak and that this was a possible sell the news scenario. While I missed the initial flush in the morning I waited fora lower high to get in. I used the 3/5min charts to determine a good entry point and what would really be a lower high. Once it went red again I shorted. It is funny how I didn't have the best of confidence in it and was honestly thinking about taking it off or half off but I stuck with it and gave it my full out. I had my target set in mind but it looked like it made a new low on a little volume and had no immediate followthrough afterwards so I took it off for a decent gain. Unfortunately, this was a very premature cover as it kept fading for the rest of the day but honestly there isn't anything to do about that. At the time that I covered I thought that it could have been it and wanted to protect profits. I didn't cover because I was scared of giving it back - I just legitimately thought that was it for the time being. Lessons and thoughts: Good use of higher timeframe to determine lower highs. Minute tic-by-tic price movements are meaningless and big picture/thesis > minute price action as always. Don't be scared out of positions like you almost did here - it worked great.
CYH: I had this on watch in case it wanted to go lower. It stuffed later in the day and I shorted it but eventually a big bid came in and I wanted to see if it was real and it was so I took it off. Tiny loss. Not much to report here except not all stuffs are it.
Other ideas:
AKAM: Originally I was long biased in the morning but missed the dip buy for the push. Later on I thought it was setting above again for a move higher as it looked like it reclaimed the .30-.40 area. The bigger picture however was that the market was dead/weak due to news and this was up a few days in a row. I saw a nice short pattern later on but didn't want to take it although I should have. Lesson: Take the patterns that you know are high probability. Looking back even though this was an earnings winner, that shouldn't have stopped me from not taking the short because of the overall bigger picture as discussed.
ACIA: Had weak followthrough and stuffed a couple of times but no volume but was a decent scalp.
CMG: Had a very good short pattern but very low vol so decided not to take it but it worked. Also of note is the many potential fake new lows but they didn't mean anything as the stock kept going lower. Lesson/reminder: Sometimes stuff like that works and sometimes it doesn't.
GRVY: Saw the stuffs but it was tough and I kept seeing it stuff then absorb the bids so I didn't want to short but the idea I had was if it got to the afternoon highs from the day before it would be a good short and that is exactly where it topped out. That is a pattern I have noticed work very well so I will keep that in mind. I don't mind not shorting it because it honestly could have gone higher with the bids absorbing and everything else. It wasn't because I was afraid.
ESRX: Almost shorted this in the morning but it held up despite the couple of fake highs so again "fake" highs/lows don't have to mean anything.
Things to work on:
1. Continue the vwap and higher timeframe adjustments
2. Minute tic-by-tic price movements are meaningless and big picture/thesis > minute price action as always.
3. Not all stuffs end up being good shorts but that doesn't mean stop trying.
4. Fake highs and lows aren't the top/bottom all the time.
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