Unfortunately today I gave back all of Friday's gains and a little more. I can't really say it was due to really bad trades overall. A lot of things didn't go my way like not getting my borrow in time when I wanted to short something which would have worked really well and then something really odd happening in BAS that was the perfect storm to fuck me over after my stop didn't get triggered. On the way back home I was trying to think about what my strengths are and how I can only trade setups that fit my strengths. The thing is I'm not really sure what my strengths and weaknesses are. I know my strengths have to do with patterns and such but there has to be more to it than that. I will keep thinking about this more as time goes on.
SGEN: I saw the news about the patient deaths and while I was initially short biased, I remember that this type of news is what a lot of shorts go after and it can become crowded. So I was cautiously long biased at the open. I didn't trade it until I saw a potential breakout area as I wasn't too confident in buying any dips. I had a wider stop initially for the breakout but as it was hovering around there I moved it up as I didn't want to get caught in anything unnecessary in terms of stopping out. It was going to work soon enough or it was probably a fakeout. It ended up being a fakeout so my moved up stop helped me as I realized what it was. When I saw it had failed I became more short biased and was hoping for it to retest 54.50ish for a short but it never got right to that level and faded off after making a lower high. Once it was under vwap I thought about shorting it at vwap/resistance but never did. The reason I guess for this was because it wasn't a particular "pattern". I guess at this point it was more evident that it wasn't squeezing or anything and was more likely to fade so any shorts at good resistance spots would be good. It ended up consolidating under vwap and I thought about it then too but didn't for some reason. That ended up working and then the pops to the new resistance area were also good shorts as well. The breakout didn't look too good on the 5min and was definitely chasing over there. On the 3min it looked like it consolidated a bit more. Other than that, I have to get back into shorting pops and long dips more often vs. breakout/breakdowns as I have mentioned in the past.
BAS: What a stock... I was mainly short biased on this as I thought it could fade because it is still a shitty company. I saw some pattern/offer stepping down a lot so I got in but then for some reason got stopped out when my price never triggered. This would have ended up being a big win for me. Later on I tried it when it rebounded and the offer was absorbing after it stuffed through it before and it was at resistance, so a few things checked off for this trade. The only thing was the bids were absorbing on the way up so I wasn't too sure but I figured more boxes were checked for it to work than not. It didn't work so I got out for a small loss. Later on is where the trouble happened. I tried it again after it dropped from vwap a couple of times had a nice pattern of lower highs. I thought I could get $1 scalp off of it for the most part. I waited until it wicked through the whole number/resistance area and shorted with a stop above the whole. I did this because there was a potential pattern there for that to give it a tight stop. What ended up happening was a once in a lifetime sort of thing where it broke the whole but didn't reach my .05 stop. It just kind of broke it and then came back under it so I thought I was good and then it broke it again, almost hit my stop but didn't and then the bids and offers just jumped up randomly and never got me out because it was above my stop. Then it started climbing so I panic covered/just got out since it was way past my stop. It ended up coming back down and then doing exactly what I thought it would. This was a very weird stock overall and extremely thin so I won't draw any conclusions other than you don't know what will happen so sometimes a tight stop vs. over/under can screw you. Had I risk to over/under I would have stayed in most likely but that is hindsight.
NVDA: Tried a small short with a tight potential stop when I saw volume increased a bit and it hovered around. I thought I could get at least a scalp out of it but I stopped out quickly. Like I say, anything can work but it was probably a bullshit trade. The volume wasn't that great and it was just grinding.
IONS: I was more short biased on this since I have seen a lot of FDA approvals get faded and the news was better for BIIB than IONS if I read it correctly. I didn't trade it out of the gate but I did try it when I thought it had a fake breakout but upped my stop quickly and got out when I realized it wasn't a good entry. It went a bit higher first before coming back down. I tried shorting it under $55 when it broke thinking that it could fade the rest of the day or at least to the high 53s. When I saw it consolidate under $55 I added in and then moved my stop to flat. It made a new low by a few pennies and that was it. I got out for essentially flat. When it reclaimed I was thinking of going long for vwap which would have worked but it might have stopped me out as it went a bit lower first before rebounding.
Things to remember:
1. No bullshit trades - they take emotional capital from you that you need for the better trades where you can scale in.
2. Dips and pops..
Tuesday, December 27, 2016
Monday, December 26, 2016
Trade Recap 12/23/16
Somehow Friday was the best day of the week by far for me and actually a solid green day. But the reason why it was a good day is not a mystery to me, I believe. The reason I did well was because I only took the setups that I was very confident in and focused on my strengths - which I believe I am starting to realize and take seriously is just taking certain patterns I have seen time and time again that work well that have a high probability of working. Going forward I will try and do a lot more of just reacting instead of predicting where to get in and when. The chart, by having some sort of pattern I recognize as high probability in the right scenario, will provide me with the right info.
CTAS: I wasn't sure which way this stock would go. I thought the earnings were meh, especially with their margins going down 10%. So I had a short bias and saw from prior earnings dates that it does have nice range on earnings days and usually picks a direction for the day. At the open it started to flush lower and I thought about shorting a whole number breakdown but I said no more level 2 bullshit and that ended up being a good call as it wicked up and down in the first few minutes. Eventually, it held under vwap and consolidated. I wasn't really sure about shorting this although it was worth a shot I suppose. It wasn't really anything I liked and ideally I wanted a push higher to 119 where there was a lot of resistance but it didn't get there. It started to come off from vwap and go a bit lower but I didn't see a setup yet. The only thing was possibly when it was at vwap but I didn't have enough conviction in the earnings to go for it here. Using the 5min candles though I did see somewhat of a decent pattern so I got in and it started going in my direction. I was hesitant to go in because the prior candle had big washout volume but I figured the pattern was good and of course it can go lower despite the volume. It was going well but it made a new low by a penny and started coming back up so I moved my stop up in case that move was it. It got me out for a slight profit but then came back off and made a new low. Of course as I have said before that the new penny lows don't have to be it but I wanted to make sure to lock it in, in case. It did end up going a bit lower and that ended up being the bottom and it started rebounding and then headed higher the rest of the day for the most part. The washout volume signaled the selling was reaching capitulation and thus even though it went lower afterwards, it wasn't by a lot and that ended up being the low. Looking back, the 3 + 5 min candles offered a nice setup that I should have seen at the time when it was at vwap and the real move happened. Also, a friend shorted it on the rebound but I had a feeling it wouldn't have worked because it looked like a reclaim of support setup but I didn't take it long because it wasn't the cleanest and I was still overall bearish on it but it did end up going higher and rebounding. Lessons: Use the 3+5 min candles even at the open for your sort of setups.
LMT: I had this on watch after the Trump tweet and figured it would do a similar thing like last time, which is rebound back to r/g. I had it on watch for it to potentially go and washout below the premarket low and then rebound. It popped at the open and then faded off. It had decent selling volume on the 3 + 5 min charts. I still was looking for it to washout a bit more but it never did. It stopped at $247. I was looking at a record of the tape at that time and I couldn't see anything that would signal to me that, that was the bottom other than the volume which piqued my interest. A couple of minutes later it sprayed down to the $247 level again as well and was quickly bought back up so that was a potential sign there but I didn't really focus on it too much. This ended up being the lows for the day. Looking back at the 3min, it did offer a nice pattern with a potential tight risk and it ended up working well from there. Where I eventually did get in was on a nice pattern breakout on the 3 + 5 min charts and I rode that up and then added when it setup again with a consolidation. I had an offer at r/g but it never got there. Instead, I figured that this was either going straight up into r/g or it was just going to peter off at some point so I kept raising my stop and eventually I got hit. This ended up being near the top which was nice of course. I was out at the time but it did offer a nice fade to vwap with lower high pattern as well. Lesson: Keep the 3+5min charts on at all times. Wait for the stock to tell you what it wants to do.
TWLO: This was my only slight loser at EOD for me. Normally I wouldn't have done anything at this time due to the volume but I have seen TWLO trade and it has really nice patterns and fades at times. The stock was sold off after the news about the AMZN partnership so I thought it was overall a weak stock. I didn't really have it on my radar until I was looking through charts at EOD. It had a very nice setup for a fade so I shorted it thinking maybe we get some EOD selling. It went lower and touched r/g so I put my stop at b/e thinking if it was going to go then it would just keep fading but it just got bought back up on volume and stopped me out for flat. This should have been a warning sign that it wasn't going to work and with the low volume pre-holiday day being almost done it was tough to short anything with no sellers I guess. When it started coming back off again I tried it again but it just stopped going down and then started reversing and I had a tight stop so I got taken out and that was it. It ended up reclaiming support and just went higher. I don't regret taking the trade, it definitely looked good. It was sort of a do or die moment for it so a breakeven stop once it starts working is appropriate. The only thing to note is my psychology during this trade. I was very outcome dependent during this trade. I didn't want to give back any gains from the day before since I had a rough past couple of days earlier in the week. It came down to having bigger size than I really accepted the risk for. I wanted to risk X but had 2X the risk. Part of it is because as I said before TWLO had such fades before with really nice patterns so when I saw one I wanted to capitalize on it. That part is ok but if that is the case then I have to accept the risk and know that, that money is already gone from my account. Be content with the outcome no matter what. No expectations.
Other stocks:
PTLA: Didn't trade this at all but wanted to note how of course with big volume, things can still go higher or lower. I avoided taking a breakout trade because it had big volume going into it making me think the buying power was waning. I don't think it is a big deal to not have taken the trade. I think I would have been more disappointed in myself if I got greedy thinking I would hit it big on this trade and it not working than not taking it for legit concerns about it. Process > outcome so despite it working and the stock went higher, I think my analysis at the time and my thoughts about were in legitimate.
Things to remember:
1. Volume exhaustion on either side can be accompanied by continued price action for a bit more in that direction before it reversed.
2. Use 3 +5 min candles as they look different to you and thus provide different patterns and opportunities. That may be your edge and strength - being a highly visual person.
3. I have to accept the risk and know that, that money is already gone from my account. Be content with the outcome no matter what. No expectations.
CTAS: I wasn't sure which way this stock would go. I thought the earnings were meh, especially with their margins going down 10%. So I had a short bias and saw from prior earnings dates that it does have nice range on earnings days and usually picks a direction for the day. At the open it started to flush lower and I thought about shorting a whole number breakdown but I said no more level 2 bullshit and that ended up being a good call as it wicked up and down in the first few minutes. Eventually, it held under vwap and consolidated. I wasn't really sure about shorting this although it was worth a shot I suppose. It wasn't really anything I liked and ideally I wanted a push higher to 119 where there was a lot of resistance but it didn't get there. It started to come off from vwap and go a bit lower but I didn't see a setup yet. The only thing was possibly when it was at vwap but I didn't have enough conviction in the earnings to go for it here. Using the 5min candles though I did see somewhat of a decent pattern so I got in and it started going in my direction. I was hesitant to go in because the prior candle had big washout volume but I figured the pattern was good and of course it can go lower despite the volume. It was going well but it made a new low by a penny and started coming back up so I moved my stop up in case that move was it. It got me out for a slight profit but then came back off and made a new low. Of course as I have said before that the new penny lows don't have to be it but I wanted to make sure to lock it in, in case. It did end up going a bit lower and that ended up being the bottom and it started rebounding and then headed higher the rest of the day for the most part. The washout volume signaled the selling was reaching capitulation and thus even though it went lower afterwards, it wasn't by a lot and that ended up being the low. Looking back, the 3 + 5 min candles offered a nice setup that I should have seen at the time when it was at vwap and the real move happened. Also, a friend shorted it on the rebound but I had a feeling it wouldn't have worked because it looked like a reclaim of support setup but I didn't take it long because it wasn't the cleanest and I was still overall bearish on it but it did end up going higher and rebounding. Lessons: Use the 3+5 min candles even at the open for your sort of setups.
LMT: I had this on watch after the Trump tweet and figured it would do a similar thing like last time, which is rebound back to r/g. I had it on watch for it to potentially go and washout below the premarket low and then rebound. It popped at the open and then faded off. It had decent selling volume on the 3 + 5 min charts. I still was looking for it to washout a bit more but it never did. It stopped at $247. I was looking at a record of the tape at that time and I couldn't see anything that would signal to me that, that was the bottom other than the volume which piqued my interest. A couple of minutes later it sprayed down to the $247 level again as well and was quickly bought back up so that was a potential sign there but I didn't really focus on it too much. This ended up being the lows for the day. Looking back at the 3min, it did offer a nice pattern with a potential tight risk and it ended up working well from there. Where I eventually did get in was on a nice pattern breakout on the 3 + 5 min charts and I rode that up and then added when it setup again with a consolidation. I had an offer at r/g but it never got there. Instead, I figured that this was either going straight up into r/g or it was just going to peter off at some point so I kept raising my stop and eventually I got hit. This ended up being near the top which was nice of course. I was out at the time but it did offer a nice fade to vwap with lower high pattern as well. Lesson: Keep the 3+5min charts on at all times. Wait for the stock to tell you what it wants to do.
TWLO: This was my only slight loser at EOD for me. Normally I wouldn't have done anything at this time due to the volume but I have seen TWLO trade and it has really nice patterns and fades at times. The stock was sold off after the news about the AMZN partnership so I thought it was overall a weak stock. I didn't really have it on my radar until I was looking through charts at EOD. It had a very nice setup for a fade so I shorted it thinking maybe we get some EOD selling. It went lower and touched r/g so I put my stop at b/e thinking if it was going to go then it would just keep fading but it just got bought back up on volume and stopped me out for flat. This should have been a warning sign that it wasn't going to work and with the low volume pre-holiday day being almost done it was tough to short anything with no sellers I guess. When it started coming back off again I tried it again but it just stopped going down and then started reversing and I had a tight stop so I got taken out and that was it. It ended up reclaiming support and just went higher. I don't regret taking the trade, it definitely looked good. It was sort of a do or die moment for it so a breakeven stop once it starts working is appropriate. The only thing to note is my psychology during this trade. I was very outcome dependent during this trade. I didn't want to give back any gains from the day before since I had a rough past couple of days earlier in the week. It came down to having bigger size than I really accepted the risk for. I wanted to risk X but had 2X the risk. Part of it is because as I said before TWLO had such fades before with really nice patterns so when I saw one I wanted to capitalize on it. That part is ok but if that is the case then I have to accept the risk and know that, that money is already gone from my account. Be content with the outcome no matter what. No expectations.
Other stocks:
PTLA: Didn't trade this at all but wanted to note how of course with big volume, things can still go higher or lower. I avoided taking a breakout trade because it had big volume going into it making me think the buying power was waning. I don't think it is a big deal to not have taken the trade. I think I would have been more disappointed in myself if I got greedy thinking I would hit it big on this trade and it not working than not taking it for legit concerns about it. Process > outcome so despite it working and the stock went higher, I think my analysis at the time and my thoughts about were in legitimate.
Things to remember:
1. Volume exhaustion on either side can be accompanied by continued price action for a bit more in that direction before it reversed.
2. Use 3 +5 min candles as they look different to you and thus provide different patterns and opportunities. That may be your edge and strength - being a highly visual person.
3. I have to accept the risk and know that, that money is already gone from my account. Be content with the outcome no matter what. No expectations.
Thursday, December 22, 2016
Trading Recap 12/22/16
Surprisingly I traded a lot today. I ended up essentially flat to a slight profit. I saw some decent opportunities today despite the holidays. I did have the chance to make a very good day happen but my breakeven stop took me out at the bottom of a play when I had some decent size with low risk so that is definitely a negative in the breakeven stop column. The losers I had I was eventually right on (just poor timing/too early) - how familiar..
WTW: I was going to be careful with this because I know most of the float is short this (and for good reason). But I thought it was a total pump job and was still interested in shorting it if it setup. It had some nice volume near $12 and then had a fake high wick by one penny with no followthrough. I thought this might be a good opportunity. I got in at a good price and it ended up coming off by 20 cents or so, so it looked good. But then it started to curl back up and I contemplated getting out for flat but decided against it as I thought it was still a good pattern with the overall thesis being that chasers would bail assuming there weren't that many shorts. But it did end up breaking $12 so I stopped out. The only other time that interested me was at $12.50 on the big volume and another fake high. I thought about getting back in and also put in another offer but never got filled. I thought that it would definitely at least fill $12.50's offer and then possibly coming back down but it never got past it. As I said in a prior post, I have to remember to not confuse a "legit" stock like this vs. a total diluting pig with all the tricks. I thought about shorting a breakdown when it was still above vwap but thought I would get screwed by doing that since this stock likes to do that. It also had support right near it so I didn't think it was a good candidate for that although it did end up working. I didn't trade it later in the day although I did think about shorting it at vwap which would have worked. Another thing to note is that it wicked through support and got bought back up and then looked like it was going to reclaim that level. But when it started perking, it never cleared that resistance and started coming back off again and eventually fading even more which goes to show that anything can happen of course. Lessons: First trade was a valid attempt although I had a feeling it would go higher first before coming back off but it was worth a shot. As for the $12.50s trade, remember that anything can happen and if something should go higher and break through a level but doesn't then that is a warning sign.
GPRO: I saw that this was going up on takeover chatter which was complete BS and I knew it. It had some very nice volume exhaustion in the 9.30s so I gave that a shot but stopped out as it went higher. That was the extent of my trade in it but what I should have done is look at the hourly/daily to see where it has real resistance and I would have noticed a similar spike last week on similar news and it went to 9.60 which just so happens to be the same spot this topped out at and also had huge volume as well. Someone wants out of course at those prices. Had I seen that I would have waited. This reminds me of CXW with the exact same scenario of being too early but eventually being right on it. So the lesson here is to look up what it did in the recent past in terms of news on longer term charts.
FDX: This was the big screwup for the day. I saw it had a decent looking inverted H&S and it fit the bill of one of the patterns I have noticed before. I got in with 5 cent risk and had 100 shares. It started moving up but I thought to myself this is a stupid trade so I just put a breakeven stop. After the prior couple of days I knew how little paper cuts add up so I didn't want to lose even $5 on this trade so I just put that breakeven stop thinking that if it was going to work then it would work right away and it did work right away pretty much but not without stopping me out at the bottom of a wick and then going higher completely past any expectation I had of it. So the lesson there is I guess not to discount anything. I still need more data to determine whether breakeven stops are good or bad for my style but this one definitely stings. Also, I saw a nice rejection pattern once it made new highs and came off but didn't short it due to low volume but it wasn't so bad and it's a large cap stock so it shouldn't be an issue. It worked out fantastic and later in the day it also provided a very nice opportunity so don't let less than stellar volume dissuade you.
FINL: I tried this a couple of times but realized my entries were poor both times so got out for flat essentially on each try. This was similar to the ACAD trade from yesterday where there was too much support from the day before where I was shorting hoping it would fade off for it to work. I mean it could have definitely worked but where I shorted was definitely a chase and it should have worked immediately so I just got out when I thought it was a trap which it did end up being. By the end of the day though it did fade close to where my target was. Overall, this was a sketchy one to trade.
BBBY: I thought this could fade but it didn't provide an entry that I liked and the fact that it made such a large move in the morning I thought it was done fading as I have seen with other stocks. I thought about shorting it at vwap but decided against it as again I thought the move was over with. I probably would have stopped out although in the end it did work and fade even more. If it got back to $42 I might have tried it but otherwise I really thought that was it. Later on though it did provide a very nice pattern of just peaking at the prior support. But for some reason I saw it as reclaiming support so went long but ended up getting stopped out. This was a stupid trade and definitely was not as clean as FDX was for example. This was a very clean short setup though and it shows because it worked great.
RHT: I had this on bounce watch as I thought it was way overdone. I wanted to let it puke out first or have some higher lows or start holding above some premarket support before I went in. It faded right off the bat and then eventually had a very nice bottoming wick which I didn't go long for unfortunately but definitely saw the opportunity. I didn't bother buying any dips or anything as it seemed weak until it setup nicely for a breakout which I did go long for. I ended up selling way too early though because I was afraid it would come right back down and get me out for flat which seemed to be the case lately. But this was a mistake overall as the pattern was good and I thought it could bounce. I was going to sell it at 70.95 which ended up being the HOD so that would have been nice. After it started coming back off though it looked like a failed breakout because it got back under the prior breakout level and seemed to be holding. I thought about shorting but wasn't really sure as it wasn't too clean since there were a couple of resistance spots but overall, it did fade back down. One thing to also note is at the end of the day it formed a base at $69 and went below it by a penny so it got some shorts trapped but it only pushed up a bit and then came back down. This is a good pattern to short with a tight stop as I have seen this before where it does this but it doesn't have any juice left to squeeze the chasers further and then it settles back down and really cracks it. It is better to be short beforehand though and take the leap of faith if it sets up. This stock was a good example of switching biases based on the price action.
MU: I was originally long biased but I saw everyone kept being bullish on it so that made me weary. If it washed out more at the open I would have taken a shot but it didn't go far enough down. I didn't really see a trade in it on the long side. On the short side though it made a nice lower high and what got me interested was it wicked above the support and came all the way back down and got rejected nicely so I immediately shorted right afterwards and was in the money right away. I ended up covering too soon it seemed although I followed my plan to just scalp it since overall it was bullish. It did end up coming back later in the day. I just didn't expect it to come down a lot further. Overall great trade and good process.
BABA: I was short biased out of the gate but didn't see a great spot to get in short for the morning flush. It bounced back and then had some lower highs and then came back under vwap and had a nice pattern. I got short. It did consolidate for a while and it at times got me thinking I made the wrong move and I thought about taking it off for breakeven but was confident in it and it ended up working well. It didn't go as far down as I had hoped but it was a decent trade nonetheless. I guess there are psychological lessons here to be learned although I have already discussed everything involved.
Things to remember:
1. Fake highs/lows don't have to be it for the day. It can just be it for a bit before it regroups and heads back higher or lower.
2. Don't confuse what happens in one stock with another.
3. Diluting plays are different from legit stocks that happen to have big offers and bids.
4. When you see a big offer and the stock rams right into it without filling then that is a good sign for a top.
5. Look up what it did in the recent past in terms of news on longer term charts.
6. Don't discount anything and also don't let lowish volume affect you.
7. Look more closely for the patterns to make sure you are getting them right.
8. When a stock guns stops but then comes right back then go long/short.
WTW: I was going to be careful with this because I know most of the float is short this (and for good reason). But I thought it was a total pump job and was still interested in shorting it if it setup. It had some nice volume near $12 and then had a fake high wick by one penny with no followthrough. I thought this might be a good opportunity. I got in at a good price and it ended up coming off by 20 cents or so, so it looked good. But then it started to curl back up and I contemplated getting out for flat but decided against it as I thought it was still a good pattern with the overall thesis being that chasers would bail assuming there weren't that many shorts. But it did end up breaking $12 so I stopped out. The only other time that interested me was at $12.50 on the big volume and another fake high. I thought about getting back in and also put in another offer but never got filled. I thought that it would definitely at least fill $12.50's offer and then possibly coming back down but it never got past it. As I said in a prior post, I have to remember to not confuse a "legit" stock like this vs. a total diluting pig with all the tricks. I thought about shorting a breakdown when it was still above vwap but thought I would get screwed by doing that since this stock likes to do that. It also had support right near it so I didn't think it was a good candidate for that although it did end up working. I didn't trade it later in the day although I did think about shorting it at vwap which would have worked. Another thing to note is that it wicked through support and got bought back up and then looked like it was going to reclaim that level. But when it started perking, it never cleared that resistance and started coming back off again and eventually fading even more which goes to show that anything can happen of course. Lessons: First trade was a valid attempt although I had a feeling it would go higher first before coming back off but it was worth a shot. As for the $12.50s trade, remember that anything can happen and if something should go higher and break through a level but doesn't then that is a warning sign.
GPRO: I saw that this was going up on takeover chatter which was complete BS and I knew it. It had some very nice volume exhaustion in the 9.30s so I gave that a shot but stopped out as it went higher. That was the extent of my trade in it but what I should have done is look at the hourly/daily to see where it has real resistance and I would have noticed a similar spike last week on similar news and it went to 9.60 which just so happens to be the same spot this topped out at and also had huge volume as well. Someone wants out of course at those prices. Had I seen that I would have waited. This reminds me of CXW with the exact same scenario of being too early but eventually being right on it. So the lesson here is to look up what it did in the recent past in terms of news on longer term charts.
FDX: This was the big screwup for the day. I saw it had a decent looking inverted H&S and it fit the bill of one of the patterns I have noticed before. I got in with 5 cent risk and had 100 shares. It started moving up but I thought to myself this is a stupid trade so I just put a breakeven stop. After the prior couple of days I knew how little paper cuts add up so I didn't want to lose even $5 on this trade so I just put that breakeven stop thinking that if it was going to work then it would work right away and it did work right away pretty much but not without stopping me out at the bottom of a wick and then going higher completely past any expectation I had of it. So the lesson there is I guess not to discount anything. I still need more data to determine whether breakeven stops are good or bad for my style but this one definitely stings. Also, I saw a nice rejection pattern once it made new highs and came off but didn't short it due to low volume but it wasn't so bad and it's a large cap stock so it shouldn't be an issue. It worked out fantastic and later in the day it also provided a very nice opportunity so don't let less than stellar volume dissuade you.
FINL: I tried this a couple of times but realized my entries were poor both times so got out for flat essentially on each try. This was similar to the ACAD trade from yesterday where there was too much support from the day before where I was shorting hoping it would fade off for it to work. I mean it could have definitely worked but where I shorted was definitely a chase and it should have worked immediately so I just got out when I thought it was a trap which it did end up being. By the end of the day though it did fade close to where my target was. Overall, this was a sketchy one to trade.
BBBY: I thought this could fade but it didn't provide an entry that I liked and the fact that it made such a large move in the morning I thought it was done fading as I have seen with other stocks. I thought about shorting it at vwap but decided against it as again I thought the move was over with. I probably would have stopped out although in the end it did work and fade even more. If it got back to $42 I might have tried it but otherwise I really thought that was it. Later on though it did provide a very nice pattern of just peaking at the prior support. But for some reason I saw it as reclaiming support so went long but ended up getting stopped out. This was a stupid trade and definitely was not as clean as FDX was for example. This was a very clean short setup though and it shows because it worked great.
RHT: I had this on bounce watch as I thought it was way overdone. I wanted to let it puke out first or have some higher lows or start holding above some premarket support before I went in. It faded right off the bat and then eventually had a very nice bottoming wick which I didn't go long for unfortunately but definitely saw the opportunity. I didn't bother buying any dips or anything as it seemed weak until it setup nicely for a breakout which I did go long for. I ended up selling way too early though because I was afraid it would come right back down and get me out for flat which seemed to be the case lately. But this was a mistake overall as the pattern was good and I thought it could bounce. I was going to sell it at 70.95 which ended up being the HOD so that would have been nice. After it started coming back off though it looked like a failed breakout because it got back under the prior breakout level and seemed to be holding. I thought about shorting but wasn't really sure as it wasn't too clean since there were a couple of resistance spots but overall, it did fade back down. One thing to also note is at the end of the day it formed a base at $69 and went below it by a penny so it got some shorts trapped but it only pushed up a bit and then came back down. This is a good pattern to short with a tight stop as I have seen this before where it does this but it doesn't have any juice left to squeeze the chasers further and then it settles back down and really cracks it. It is better to be short beforehand though and take the leap of faith if it sets up. This stock was a good example of switching biases based on the price action.
MU: I was originally long biased but I saw everyone kept being bullish on it so that made me weary. If it washed out more at the open I would have taken a shot but it didn't go far enough down. I didn't really see a trade in it on the long side. On the short side though it made a nice lower high and what got me interested was it wicked above the support and came all the way back down and got rejected nicely so I immediately shorted right afterwards and was in the money right away. I ended up covering too soon it seemed although I followed my plan to just scalp it since overall it was bullish. It did end up coming back later in the day. I just didn't expect it to come down a lot further. Overall great trade and good process.
BABA: I was short biased out of the gate but didn't see a great spot to get in short for the morning flush. It bounced back and then had some lower highs and then came back under vwap and had a nice pattern. I got short. It did consolidate for a while and it at times got me thinking I made the wrong move and I thought about taking it off for breakeven but was confident in it and it ended up working well. It didn't go as far down as I had hoped but it was a decent trade nonetheless. I guess there are psychological lessons here to be learned although I have already discussed everything involved.
Things to remember:
1. Fake highs/lows don't have to be it for the day. It can just be it for a bit before it regroups and heads back higher or lower.
2. Don't confuse what happens in one stock with another.
3. Diluting plays are different from legit stocks that happen to have big offers and bids.
4. When you see a big offer and the stock rams right into it without filling then that is a good sign for a top.
5. Look up what it did in the recent past in terms of news on longer term charts.
6. Don't discount anything and also don't let lowish volume affect you.
7. Look more closely for the patterns to make sure you are getting them right.
8. When a stock guns stops but then comes right back then go long/short.
Wednesday, December 21, 2016
Trading Recap 12/21/16
Today was another pretty decent losing day. New record of biggest losing day by $1. A lot to learn still but the losses are helping me focus in on what I need to do to improve. Basically the main things are to not trust the level 2 at all, only focus on the best trades that you have good conviction in, and don't take the mediocre trades and also take the trades that you lose consistently on the short side and go long instead. It is funny seeing how easy it is hindsight. I have also started using spreadsheets to track my setups and whether or not for the trades I take if patience is good, if a breakeven stop is good, etc. I am also tracking what happens after a certain type of news is released.
ACAD: I had this on watch for a continued fade based on how it didn't bounce much yesterday. My plan was to see if it peaked the 28.20-.30 level from the day before. At the open it started to fade and then it looked like it was holding under vwap. I decided to try it on a vwap test as it was consolidating in that area. I did have a hunch that this could be one of the many, almost every, time that this ends up being a low and I short at the bottom of an incoming upward move. That is exactly what happened and I got out in the .40s. I knew at that point it wasn't going to work and it wasn't doing what I thought it would by holding vwap and giving it some extra room. I should have also drawn some potential support that it did hit from the day before as well. So all in all it was a bad trade for not drawing more support lines from the day before. While the trade could have worked it is either going to hold vwap very closely or it is a better long. From now on if I see a pattern like this, I will just go long when it goes back above vwap as almost every time it has been a good long as long as it looks like this. The level 2 made it seem like it was rejecting vwap at the time so I thought that added to the possibility of it working - WRONG! Also, the fade setup/pattern later in the day was really great and had I seen that and possibly waited for that that would have been a guarantee almost. So a few lessons here: 1. Disregard vwap at the open for these types of shorts (you know this but for this trade you did have some other resistance in your favor but it didn't look too clean). 2. Go long these vwap breaks 3. Be aware of more levels from day before 4. Look for the fade setup later in the day on names you are originally interested in shorting - usually they offer good fades after the morning push. Also note that if you get a short right at the open that is fine but to cover at least some and then all of it on a vwap break and possibly go long after that.
FINL: This had pretty bad earnings and guidance. The whole thing smelled like a fade. I was hoping for a short against $20 in the morning but when it opened I got the feeling that it would bust through that so I waited. There wasn't much in terms of resistance that could have been charted so I didn't want to just short randomly. I decided to wait to see if $20 would peak because there was a huge bidder there that kept absorbing shares so I wanted to see him get taken out and then if $20 peaked I would start in. That is exactly what happened and it went down then back up above $20 but I stayed in thinking it could just be getting people out. It did drop below $20 and it made a new low but was then quickly bought back up. I was going to add on the new low but decided against it due to the SSR and not wanting to chase an add at this poor spot. However, it started hanging around my average and eventually broke through $20 and hit my stop. I was up around 40 cents on my trade but really thought I could get $1 out of it at least but I was wrong. I knew it had a high short interest but it seemed odd that it was holding up the way it was. It didn't go down so much that shorts would cover so it was odd for sure. I don't regret this trade at all and it was a good trade on all accounts. The patience just didn't work I guess but I would have been more pissed if I had taken it off right away vs. being patient.
SGY: This was my fuckup for the day. I shorted at 11.55 because it looked like it was going to start to fade. I had a feeling it would and the small pattern it made got me thinking that while it looked like a breakout candidate and looked like it was going to higher, it would be one of those that just faded instead. Unfortunately I stopped out near the highs as it did push higher and I didn't want to be stuck in another squeeze if it did happen. Honestly while this happened to be near the top, in realtime it was the right move because you never know. As it stayed above vwap it wasn't really a short afterwards. However, afterwards it cracked vwap and consolidated under it. I knew it was going to fade more, I really did. But the volume sucked and I didn't want to be short something with that volume. But I forgot that once the sell is on then the volume starts to really kick in. So it would have been fine to short it. I was thinking about shorting it as it looked like it was going to go lower but didn't want to chase it down although it looked good. I did have the chance for a better entry as it first climbed a bit before getting rejected and then starting the real fade. By the time the real fade was on I hit my downside so couldn't do anything else with it. So lessons: 1. Perhaps give things more room like I could have given it to $12 (it sounds like hindsight but that is the next whole number). I think I would have preferred to stop out and try again if I wanted to. $12 was an interesting level from the day before. 2. These patterns usually take a bit longer to do what you want first so don't chase but wait for the better entry. 3. Even if something like this has low vol, it will have high vol later on if it does what you think.
NVDA: I drew the support and resistance lines from yesterday and knew I wanted to be long or short if it was above or below those lines and held. It started fading and I wasn't sure whether or not while it consolidated if it was a good entry or if I could get a better one. I probably could have scaled into it with two entries like I ended up doing later on and then add on pops on the way down. It stopped going down at a random spot but it kept wicking down and getting bought up. Sometimes it means something and sometimes it doesn't but taking half off here wouldn't have been a bad idea at least if you were short. What I did end up doing was short it at vwap half and then add half as it went to $105. My thought process was that if this was the day it was going to fade a bit then any pops up to $105 should be shorted. I didn't know if it would stop at vwap or $105 so that is why I scaled in. I ended up getting out where I added though because I didn't like the way it was acting and honestly adding at $105 while ok with the size I had just didn't seem right. It wasn't really doing what I thought it should, it bounced too much for it to fade more. In fact I should have went long as it had a nice pattern after it broke out from 104.50 for a move at least to $105. Lesson: Don't just put orders at vwap thinking it will stop there after you missed the fade move back down. It has to make sense and with the pattern mentioned above it just didn't make sense. Go long instead when you see a pattern like you did.
NKE: Just a potential scalp trade that I stopped out on. I thought it looked good for a potential fade after it was consolidating near the lows and looked like a bear flag. I put a tight stop thinking it should work relatively quickly but it just stopped me out. It went a bit lower but not to my target and then it reversed. It was a bad entry but I thought it would work right away so that is why I did it. Sometimes it works when it looks like it is about to do it and other times like SGY it needs to cycle through shorts first. But it didn't have much followthrough anyway. I guess the lesson here is to just miss the trade unless you get a better entry. I didn't have a take on earnings but the way it looked chart-wise it made it seem like it could fade more.
FDX: I didn't trade it in the morning but the big spray up and then stuff right back down and then big fade goes to show you anything is possible. I saw a nice ABCD pattern and the earnings could have gone either way for me so I went long and then added over resistance. I was in the money a but thought it could go higher and had offers up at various spots but was wrong as to how far it could go as it ended up coming back down under the whole number where I shorted it. I took the add off just to be safe. I then added more when the bid was really absorbing (I know no L2 but this was right at vwap with a good chart and the risk was 2 cents and I was out so it was worth it if it did end up working). It didn't end up working so I got out for a loss. While it was frustrating to see me be up on the trade nicely only to get out for a loss, I think it was overall good process.
Things to remember:
1. No l2 trades.
2. Focus on the best trades that you don't think "maybe it can work". If you can't see it right away then don't bother
3. Disregard vwap at the open for these types of shorts (you know this but for this trade you did have some other resistance in your favor but it didn't look too clean). Go long these vwap break.
4. Look for the fade setup later in the day on names you are originally interested in shorting - usually they offer good fades after the morning push
5. Give things more room.
6. Even for low vol, it can have volume when the fade/breakout actually happens.
ACAD: I had this on watch for a continued fade based on how it didn't bounce much yesterday. My plan was to see if it peaked the 28.20-.30 level from the day before. At the open it started to fade and then it looked like it was holding under vwap. I decided to try it on a vwap test as it was consolidating in that area. I did have a hunch that this could be one of the many, almost every, time that this ends up being a low and I short at the bottom of an incoming upward move. That is exactly what happened and I got out in the .40s. I knew at that point it wasn't going to work and it wasn't doing what I thought it would by holding vwap and giving it some extra room. I should have also drawn some potential support that it did hit from the day before as well. So all in all it was a bad trade for not drawing more support lines from the day before. While the trade could have worked it is either going to hold vwap very closely or it is a better long. From now on if I see a pattern like this, I will just go long when it goes back above vwap as almost every time it has been a good long as long as it looks like this. The level 2 made it seem like it was rejecting vwap at the time so I thought that added to the possibility of it working - WRONG! Also, the fade setup/pattern later in the day was really great and had I seen that and possibly waited for that that would have been a guarantee almost. So a few lessons here: 1. Disregard vwap at the open for these types of shorts (you know this but for this trade you did have some other resistance in your favor but it didn't look too clean). 2. Go long these vwap breaks 3. Be aware of more levels from day before 4. Look for the fade setup later in the day on names you are originally interested in shorting - usually they offer good fades after the morning push. Also note that if you get a short right at the open that is fine but to cover at least some and then all of it on a vwap break and possibly go long after that.
FINL: This had pretty bad earnings and guidance. The whole thing smelled like a fade. I was hoping for a short against $20 in the morning but when it opened I got the feeling that it would bust through that so I waited. There wasn't much in terms of resistance that could have been charted so I didn't want to just short randomly. I decided to wait to see if $20 would peak because there was a huge bidder there that kept absorbing shares so I wanted to see him get taken out and then if $20 peaked I would start in. That is exactly what happened and it went down then back up above $20 but I stayed in thinking it could just be getting people out. It did drop below $20 and it made a new low but was then quickly bought back up. I was going to add on the new low but decided against it due to the SSR and not wanting to chase an add at this poor spot. However, it started hanging around my average and eventually broke through $20 and hit my stop. I was up around 40 cents on my trade but really thought I could get $1 out of it at least but I was wrong. I knew it had a high short interest but it seemed odd that it was holding up the way it was. It didn't go down so much that shorts would cover so it was odd for sure. I don't regret this trade at all and it was a good trade on all accounts. The patience just didn't work I guess but I would have been more pissed if I had taken it off right away vs. being patient.
SGY: This was my fuckup for the day. I shorted at 11.55 because it looked like it was going to start to fade. I had a feeling it would and the small pattern it made got me thinking that while it looked like a breakout candidate and looked like it was going to higher, it would be one of those that just faded instead. Unfortunately I stopped out near the highs as it did push higher and I didn't want to be stuck in another squeeze if it did happen. Honestly while this happened to be near the top, in realtime it was the right move because you never know. As it stayed above vwap it wasn't really a short afterwards. However, afterwards it cracked vwap and consolidated under it. I knew it was going to fade more, I really did. But the volume sucked and I didn't want to be short something with that volume. But I forgot that once the sell is on then the volume starts to really kick in. So it would have been fine to short it. I was thinking about shorting it as it looked like it was going to go lower but didn't want to chase it down although it looked good. I did have the chance for a better entry as it first climbed a bit before getting rejected and then starting the real fade. By the time the real fade was on I hit my downside so couldn't do anything else with it. So lessons: 1. Perhaps give things more room like I could have given it to $12 (it sounds like hindsight but that is the next whole number). I think I would have preferred to stop out and try again if I wanted to. $12 was an interesting level from the day before. 2. These patterns usually take a bit longer to do what you want first so don't chase but wait for the better entry. 3. Even if something like this has low vol, it will have high vol later on if it does what you think.
NVDA: I drew the support and resistance lines from yesterday and knew I wanted to be long or short if it was above or below those lines and held. It started fading and I wasn't sure whether or not while it consolidated if it was a good entry or if I could get a better one. I probably could have scaled into it with two entries like I ended up doing later on and then add on pops on the way down. It stopped going down at a random spot but it kept wicking down and getting bought up. Sometimes it means something and sometimes it doesn't but taking half off here wouldn't have been a bad idea at least if you were short. What I did end up doing was short it at vwap half and then add half as it went to $105. My thought process was that if this was the day it was going to fade a bit then any pops up to $105 should be shorted. I didn't know if it would stop at vwap or $105 so that is why I scaled in. I ended up getting out where I added though because I didn't like the way it was acting and honestly adding at $105 while ok with the size I had just didn't seem right. It wasn't really doing what I thought it should, it bounced too much for it to fade more. In fact I should have went long as it had a nice pattern after it broke out from 104.50 for a move at least to $105. Lesson: Don't just put orders at vwap thinking it will stop there after you missed the fade move back down. It has to make sense and with the pattern mentioned above it just didn't make sense. Go long instead when you see a pattern like you did.
NKE: Just a potential scalp trade that I stopped out on. I thought it looked good for a potential fade after it was consolidating near the lows and looked like a bear flag. I put a tight stop thinking it should work relatively quickly but it just stopped me out. It went a bit lower but not to my target and then it reversed. It was a bad entry but I thought it would work right away so that is why I did it. Sometimes it works when it looks like it is about to do it and other times like SGY it needs to cycle through shorts first. But it didn't have much followthrough anyway. I guess the lesson here is to just miss the trade unless you get a better entry. I didn't have a take on earnings but the way it looked chart-wise it made it seem like it could fade more.
FDX: I didn't trade it in the morning but the big spray up and then stuff right back down and then big fade goes to show you anything is possible. I saw a nice ABCD pattern and the earnings could have gone either way for me so I went long and then added over resistance. I was in the money a but thought it could go higher and had offers up at various spots but was wrong as to how far it could go as it ended up coming back down under the whole number where I shorted it. I took the add off just to be safe. I then added more when the bid was really absorbing (I know no L2 but this was right at vwap with a good chart and the risk was 2 cents and I was out so it was worth it if it did end up working). It didn't end up working so I got out for a loss. While it was frustrating to see me be up on the trade nicely only to get out for a loss, I think it was overall good process.
Things to remember:
1. No l2 trades.
2. Focus on the best trades that you don't think "maybe it can work". If you can't see it right away then don't bother
3. Disregard vwap at the open for these types of shorts (you know this but for this trade you did have some other resistance in your favor but it didn't look too clean). Go long these vwap break.
4. Look for the fade setup later in the day on names you are originally interested in shorting - usually they offer good fades after the morning push
5. Give things more room.
6. Even for low vol, it can have volume when the fade/breakout actually happens.
Tuesday, December 20, 2016
Trading Recap 12/20/16
Today was not a good day as far as results go. I hit my downside fairly quickly. Process-wise it wasn't horrible. Some tweaks will have to be made for sure. In general, giving things more room and sizing down if need be - I no longer ever want to be stopped out if I end up being right in a trade (within reason). I also will no longer be using level 2 at all unless it is blatant. No trade shall be put on with the reason being solely from level 2 information. It has gotten me in trouble more than once and it is definitely a pattern where most of the time it is bullshit.
CNAT: I saw in premkt that the offers were absorbing and it was stuffing near the 5.25 level. I thought it was weak and given the news I thought it could fade. Plus it has a history of fading on days like today based on the daily chart. I didn't get it right at the open but when it got to vwap I thought it would be a good attempt and I would add higher if need be at 5.30ish so I did do smaller size here since my risk was so high. As I switched to the 3min vs. the 2min I was using though, it definitely didn't look as good but I decided to stick with it and not take the tiny loss once I realized that because I figured it would eventually fade. This was a mistake as I should have just gotten out and then reassessed. Anyway, when it got to 5.30s and it stuffed on big volume I added in. However, I didn't give it enough room past that it seems. I saw it spray to 5.43 so I put my stop at 5.45 thinking that if it got past there then it would definitely go higher. It stopped me out at what ended up being the top and then faded back down. I thought about shorting after it dumped but wanted it to pop a bit more than it did but it just stayed near the lows and then dropped. I also thought about a breakdown trade but I didn't want to bother with that in case it just wicked through. I wasn't going to chase it even though it ended up working - I've had enough of that. Lessons: The level 2 from premkt and the stuffs made you overly bearish without thinking about what it can do. Realize (and I knew this when I was trading it) that what happens in premkt or at the open may not be indicative of how it plays out afterwards. Also if you don't like a trade right after getting in then just get out. Also you have to give things over/under room just in case. So $5.30s over/under is a good point. It went to 5.50 which makes it tough but it never broke it.
ACAD: With the big fade from the premarket highs I thought this could just continue at the open. I saw an offer walking it down with it absorbing at each new level. So when it opened I saw $29 was absorbing so I tried to get in there with the idea that $29 can hold and it would have a straight fade but that wasn't the case and it broke through it. I tried it again later at a different spot but it didn't work either so then I gave up. Had I ignored the level 2 and just stuck to shorting it at vwap that would have worked out perfect. So the lesson here is to not use the level 2 for absorbs unless it is repeated.
AKBA: I just kept it on watch because it seemed like the type that could fade. It did fade straight from the open but then I noticed a large vwap stuff so I shorted there with risk to it on vwap. I did extra size and when it started going above vwap a bit I just went back to regular size although I do not like this technique so I won't be doing it in the future especially since it's not really scalable when you get into bigger sizes. The mistake was to not see that 10.25ish was a level from premkt and that should be the over/under instead of just vwap to give it more room. I gave it some room to hold vwap and then it flushed which I thought looked good but then it came right back above vwap and I moved my stop down and I just got out since at that point I had a feeling if it got back above vwap it could go higher. It never did anything else for the rest of the day for the most part although it did tick higher before coming off again. I don't think there is a lesson here as honestly this was the only trade I didn't really mind how it ended up and the process behind it.
Things to remember:
1. Don't use level 2.
2. What happens at premkt and the open doesn't indicate how it will trade afterwards in most scenarios.
3. Use less size to give things over/under room.
CNAT: I saw in premkt that the offers were absorbing and it was stuffing near the 5.25 level. I thought it was weak and given the news I thought it could fade. Plus it has a history of fading on days like today based on the daily chart. I didn't get it right at the open but when it got to vwap I thought it would be a good attempt and I would add higher if need be at 5.30ish so I did do smaller size here since my risk was so high. As I switched to the 3min vs. the 2min I was using though, it definitely didn't look as good but I decided to stick with it and not take the tiny loss once I realized that because I figured it would eventually fade. This was a mistake as I should have just gotten out and then reassessed. Anyway, when it got to 5.30s and it stuffed on big volume I added in. However, I didn't give it enough room past that it seems. I saw it spray to 5.43 so I put my stop at 5.45 thinking that if it got past there then it would definitely go higher. It stopped me out at what ended up being the top and then faded back down. I thought about shorting after it dumped but wanted it to pop a bit more than it did but it just stayed near the lows and then dropped. I also thought about a breakdown trade but I didn't want to bother with that in case it just wicked through. I wasn't going to chase it even though it ended up working - I've had enough of that. Lessons: The level 2 from premkt and the stuffs made you overly bearish without thinking about what it can do. Realize (and I knew this when I was trading it) that what happens in premkt or at the open may not be indicative of how it plays out afterwards. Also if you don't like a trade right after getting in then just get out. Also you have to give things over/under room just in case. So $5.30s over/under is a good point. It went to 5.50 which makes it tough but it never broke it.
ACAD: With the big fade from the premarket highs I thought this could just continue at the open. I saw an offer walking it down with it absorbing at each new level. So when it opened I saw $29 was absorbing so I tried to get in there with the idea that $29 can hold and it would have a straight fade but that wasn't the case and it broke through it. I tried it again later at a different spot but it didn't work either so then I gave up. Had I ignored the level 2 and just stuck to shorting it at vwap that would have worked out perfect. So the lesson here is to not use the level 2 for absorbs unless it is repeated.
AKBA: I just kept it on watch because it seemed like the type that could fade. It did fade straight from the open but then I noticed a large vwap stuff so I shorted there with risk to it on vwap. I did extra size and when it started going above vwap a bit I just went back to regular size although I do not like this technique so I won't be doing it in the future especially since it's not really scalable when you get into bigger sizes. The mistake was to not see that 10.25ish was a level from premkt and that should be the over/under instead of just vwap to give it more room. I gave it some room to hold vwap and then it flushed which I thought looked good but then it came right back above vwap and I moved my stop down and I just got out since at that point I had a feeling if it got back above vwap it could go higher. It never did anything else for the rest of the day for the most part although it did tick higher before coming off again. I don't think there is a lesson here as honestly this was the only trade I didn't really mind how it ended up and the process behind it.
Things to remember:
1. Don't use level 2.
2. What happens at premkt and the open doesn't indicate how it will trade afterwards in most scenarios.
3. Use less size to give things over/under room.
Monday, December 19, 2016
Trading Recap 12/19/16
Another small losing day although the process was slightly better. Some improvements need to be made but nothing crazy. I did much better with just focusing on the best trades that I saw right away vs. random other shit that I don't have much confidence in although that too still needs work.
XGTI: This had the chance to be a decent winner but I mismanaged the position and had poor entries with the size I had and I kept trying to add size with a tight stop using the level 2 levels where the offers were absorbing a lot but it just came down to using the chart in the end. I've been burned using the level 2 too much so I will be phasing that out except for certain scenarios. It would keep holding a level on the offer then go above it a few cents and then come back down. It is hard to set a true stop other than giving it enough room based on chart levels which is what I should have done. Of course the levels I saw could have held and that could have been it but I guess the first lesson here on these diluting stock plays is that just because an offer holds at a certain level and is absorbing, that doesn't mean it won't go through it a bit more at least. Just use the chart and some level 2 for a general sense of "ok, they are diluting and it is heavy". Anyway, it started ramping up in the morning and the top ended up being where it broke out slightly but that small push was it. It was hard to say that that was the top and I definitely didn't want to get run over and I saw no need for picking a top. While it would have been nice to short at the high, I don't really regret that. It came off a bit and it was still holding up at that point. I knew it wasn't going to be that easy and I figured that it would have at least fuck over some shorts at least by doing something more which would provide an entry. It perked on bigger volume on the 1min and it definitely looked like a stuff and that did end up being a very good stuff. Normally I wouldn't have bothered to look for a top in a scenario like this but going through SEC filings I knew they had an effect out and overall these R/S plays just fade back where they came from because they are being diluted. So I had all that going for me. The stuff at 4.70 was worth a shot with all these combined. But either way it faded off below vwap and I figured it looked like the type of play to just stay and hover under vwap and then continue lower which is what it did. I shorted because 4.30 was definitely a level but also my idea was vwap over/under. It stayed under vwap and when I thought it would have immediate continuation I added in but I was too early on the add and so now I was stuck with a bigger position than I would have liked. It never violated that 4.30 though but I wanted to play it safe. I got out and then reshorted. I basically kept trying to be cute with it like I said I shouldn't be and just kept doing stupid shit in the consolidation until it finally broke down but now with all the stupid shit I did I had a bad average. I ended up adding when I really felt it was going lower and it did go to $4 but then hung around. I was looking for more followthrough so when it went back to my average with the I sized down. It climbed back up before coming back down. It was good I still had my original and gave that enough room as it did go higher than I thought it would before coming back down. I moved my stop down because I thought it shouldn't get back over $4 once it was nicely under it but once the $3.80s broke and then reclaimed, I had a feeling it wouldn't go lower right away and I was right but I was willing to give it the benefit of the doubt considering all the things going on but my moved down stop got triggered which got me out. It went back to my average so I guess I would have gotten out for flat vs. a small profit but it did end up going to my original target. Lessons: Even with these stocks that are diluting, the levels on the level 2 aren't exactly perfect so just go by the chart as per usual and give things over/under room. Don't add then get out and keep doing it. Don't be cute with stops either or your orders. Just use the chart and short pops and that's it. It is nice if you can add with tight risk but if it means you just get chopped up then fuck it.
JBL: Looked good for a fade based on the pattern I saw. I shorted it and it had immediate followthrough but then started coming back towards my price and it wasn't because I was afraid of losing but the pattern I saw should have more immediate followthrough and no retests so when it got back to my price I just got out for flat. That ended up being a good call because it went higher then lower and didn't do much the entire day. Overall, it was good process in my opinion because I shorted when I thought I had edge but when it wasn't doing as I planned I got out. I was contemplating whether or not I was just being too quick about it and should let it play out but I decided if it was coming back up it probably wouldn't work at that instance anyway.
DUST: I went long at the end of the day when GDX/NUGT had good patterns. It was a bit iffy but it was worth a shot to try with smaller size. I wasn't 100% on it but with the way it acted with the market during the day and with the pattern I thought it had a decent enough shot of working. It perked a bit after I bought a dip but as it was near the close and GDX was starting to rebound, I knew it wasn't going to happen so I just moved my stop up and got out. It was worth a shot in my opinion. It was good that I was still scanning for setups later in the day.
LOXO: Just a breakdown trade going into the close that I did on small size. I am going to avoid breakdown/breakout trades like this going forward because I just don't like them and the risk is hard to quantify. I will examine these going forward but they definitely aren't a favorite. I have a hard time trusting them because you never know if it is a fakeout or not. I said no more arbitrary stops and with these you kind of have to unless you want to give them much bigger room. It is something that should only be used in the rarest of circumstances.
CLVS: Tried shorting it which would have worked great but these offers/bids absorbing on these news plays are just not reliable. It goes above/below them and you get stopped out then it goes back in that direction and then you are afraid to try it again. Not even afraid but not wanting to get chopped up time after time of trying them like what would have happened on the casinos. Overall, not worth it. They ended up working later on as the downtrend continued but after I got out the first time I figured the other times it wouldn't work, which ended up being incorrect. Process wise I think I would honestly rather miss out then get chopped up trying these stupid trades.
Things to remember:
1. With breaking news, don't bother with offers/bids absorbing. They work at times for sure but unless you feel very strongly about something then it probably isn't worth it. More experience will be needed though on these sorts of plays to make a definitive judgment.
2. Forget breakout/breakdown plays for 99% of the time.
3. Even with these stocks that are diluting, the levels on the level 2 aren't exactly perfect so just go by the chart as per usual and give things over/under room.
4. Don't add then get out and keep doing it. Don't be cute with stops either or your orders. Just use the chart and short pops and that's it. It is nice if you can add with tight risk but if it means you just get chopped up then fuck it.
5. Haven't said this in a while but.. TRADE THE BEST, FUCK THE REST. TRADE THE SETUPS THAT MATCH YOUR STRENGTHS.
6. When downtrending, stocks can pop up a bit more than you think before they continue going lower.
XGTI: This had the chance to be a decent winner but I mismanaged the position and had poor entries with the size I had and I kept trying to add size with a tight stop using the level 2 levels where the offers were absorbing a lot but it just came down to using the chart in the end. I've been burned using the level 2 too much so I will be phasing that out except for certain scenarios. It would keep holding a level on the offer then go above it a few cents and then come back down. It is hard to set a true stop other than giving it enough room based on chart levels which is what I should have done. Of course the levels I saw could have held and that could have been it but I guess the first lesson here on these diluting stock plays is that just because an offer holds at a certain level and is absorbing, that doesn't mean it won't go through it a bit more at least. Just use the chart and some level 2 for a general sense of "ok, they are diluting and it is heavy". Anyway, it started ramping up in the morning and the top ended up being where it broke out slightly but that small push was it. It was hard to say that that was the top and I definitely didn't want to get run over and I saw no need for picking a top. While it would have been nice to short at the high, I don't really regret that. It came off a bit and it was still holding up at that point. I knew it wasn't going to be that easy and I figured that it would have at least fuck over some shorts at least by doing something more which would provide an entry. It perked on bigger volume on the 1min and it definitely looked like a stuff and that did end up being a very good stuff. Normally I wouldn't have bothered to look for a top in a scenario like this but going through SEC filings I knew they had an effect out and overall these R/S plays just fade back where they came from because they are being diluted. So I had all that going for me. The stuff at 4.70 was worth a shot with all these combined. But either way it faded off below vwap and I figured it looked like the type of play to just stay and hover under vwap and then continue lower which is what it did. I shorted because 4.30 was definitely a level but also my idea was vwap over/under. It stayed under vwap and when I thought it would have immediate continuation I added in but I was too early on the add and so now I was stuck with a bigger position than I would have liked. It never violated that 4.30 though but I wanted to play it safe. I got out and then reshorted. I basically kept trying to be cute with it like I said I shouldn't be and just kept doing stupid shit in the consolidation until it finally broke down but now with all the stupid shit I did I had a bad average. I ended up adding when I really felt it was going lower and it did go to $4 but then hung around. I was looking for more followthrough so when it went back to my average with the I sized down. It climbed back up before coming back down. It was good I still had my original and gave that enough room as it did go higher than I thought it would before coming back down. I moved my stop down because I thought it shouldn't get back over $4 once it was nicely under it but once the $3.80s broke and then reclaimed, I had a feeling it wouldn't go lower right away and I was right but I was willing to give it the benefit of the doubt considering all the things going on but my moved down stop got triggered which got me out. It went back to my average so I guess I would have gotten out for flat vs. a small profit but it did end up going to my original target. Lessons: Even with these stocks that are diluting, the levels on the level 2 aren't exactly perfect so just go by the chart as per usual and give things over/under room. Don't add then get out and keep doing it. Don't be cute with stops either or your orders. Just use the chart and short pops and that's it. It is nice if you can add with tight risk but if it means you just get chopped up then fuck it.
JBL: Looked good for a fade based on the pattern I saw. I shorted it and it had immediate followthrough but then started coming back towards my price and it wasn't because I was afraid of losing but the pattern I saw should have more immediate followthrough and no retests so when it got back to my price I just got out for flat. That ended up being a good call because it went higher then lower and didn't do much the entire day. Overall, it was good process in my opinion because I shorted when I thought I had edge but when it wasn't doing as I planned I got out. I was contemplating whether or not I was just being too quick about it and should let it play out but I decided if it was coming back up it probably wouldn't work at that instance anyway.
DUST: I went long at the end of the day when GDX/NUGT had good patterns. It was a bit iffy but it was worth a shot to try with smaller size. I wasn't 100% on it but with the way it acted with the market during the day and with the pattern I thought it had a decent enough shot of working. It perked a bit after I bought a dip but as it was near the close and GDX was starting to rebound, I knew it wasn't going to happen so I just moved my stop up and got out. It was worth a shot in my opinion. It was good that I was still scanning for setups later in the day.
LOXO: Just a breakdown trade going into the close that I did on small size. I am going to avoid breakdown/breakout trades like this going forward because I just don't like them and the risk is hard to quantify. I will examine these going forward but they definitely aren't a favorite. I have a hard time trusting them because you never know if it is a fakeout or not. I said no more arbitrary stops and with these you kind of have to unless you want to give them much bigger room. It is something that should only be used in the rarest of circumstances.
CLVS: Tried shorting it which would have worked great but these offers/bids absorbing on these news plays are just not reliable. It goes above/below them and you get stopped out then it goes back in that direction and then you are afraid to try it again. Not even afraid but not wanting to get chopped up time after time of trying them like what would have happened on the casinos. Overall, not worth it. They ended up working later on as the downtrend continued but after I got out the first time I figured the other times it wouldn't work, which ended up being incorrect. Process wise I think I would honestly rather miss out then get chopped up trying these stupid trades.
Things to remember:
1. With breaking news, don't bother with offers/bids absorbing. They work at times for sure but unless you feel very strongly about something then it probably isn't worth it. More experience will be needed though on these sorts of plays to make a definitive judgment.
2. Forget breakout/breakdown plays for 99% of the time.
3. Even with these stocks that are diluting, the levels on the level 2 aren't exactly perfect so just go by the chart as per usual and give things over/under room.
4. Don't add then get out and keep doing it. Don't be cute with stops either or your orders. Just use the chart and short pops and that's it. It is nice if you can add with tight risk but if it means you just get chopped up then fuck it.
5. Haven't said this in a while but.. TRADE THE BEST, FUCK THE REST. TRADE THE SETUPS THAT MATCH YOUR STRENGTHS.
6. When downtrending, stocks can pop up a bit more than you think before they continue going lower.
Saturday, December 17, 2016
Trading Recap 12/17/16
Friday was a pretty poor trading day. I did a lot of poor trades but the good takeaway from this is that I have learned a lot from this trading session and it wasn't a killer down day. Just a lot of small stupid trades that kept adding up. It really should have been a positive day or at the very least a flat day. I did miss a potential monster trade because I didn't have it on the forefront and I will discuss that later on.
JBL: This was the stock that I was most interested indue to the fact that it was gapping up near resistance on the daily chart and it was up on pretty lackluster earnings guidance. At the open I was looking for either the premarket support to fail or a fail at the premarket resistance. I saw it get to 24.15 and it was absorbing very heavily on the offer there. Enough so to make it seem very credible. It was also at the premarket resistance and everything else it had going for it to fade so it seemed like a very good trade idea. I decided to go in with more size than usual because it looked very good and my stop was if it broke that .15 level. It came back down to vwap and I was in the money by around 40 cents or so. I could have taken it off here but I have 0 regrets of doing so. I was instead looking to add possibly if it made a new low and peaked that .70 level. Instead it held and then it just broke out and went higher. Small loss and not a big deal. I didn't go long on it on dips or anything because I was still skeptical that this move was worth it but the trend was bullish until otherwise so I stayed away. Eventually it came back under $25 and couldn't get back above it. I decided to short around 24.90 with the idea that it could get to vwap at least as the move was definitely overdone. It worked for a little but it looked like it could have reclaimed the support so I just put a breakeven stop. It got triggered and I got out but that $25 never broke back above. It was one of those patterns I have seen where it looks like it reclaimed/inverted H&S but it just holds the resistance and then fades. After all was said and done it definitely looked like a short pattern. I am not really disappointed about getting out for flat. I still think it was good process. The only thing to do in this case is to keep an eye on it and see if it still doesn't breakout and if so and it looks like it is about to crack then go in. Overall the trading in this stock was the only good thing for the day that I did. Even though it was a loser I didn't mind losing on this at all given how good the setup was. One other thing to remember is to look at longer term weekly charts as this had clear resistance in the $25 area which helped with the idea and made it work so well for an afternoon fade.
OPHT: Horrible trading in this. I saw the news and when it opened it started spiking higher. I figured this was bullshit and just some freak thing so I shorted without a real reason other than it spiked on this bad news. It then went higher and stopped me out for the loss I deserved. I tried it again after it made a fake high by a penny and consolidated at the high but was way way too tight with the stop because I topticked the HOD and I would have had a nice fade then. But even this entry was poor. I just kept trying to pick the top again and didn't let it top out a bit at least. There was a potential entry after it had that fake high and then kind of retested 5.22 a couple of times. That was a good pattern. It would have just been a scalp I think to vwap or just underneath it which would have worked fine. I say scalp only because it seemed odd that it would just go higher like that. At the very least I would have taken 3/4 off I think and maybe let the rest ride for a breakeven stop which would have gotten hit. Lesson: Don't pick tops and don't get the FOMO. Wait for the setup.
TRVG: A couple of random trades that amounted to being down $2 in the name. It started going higher after the open but I didn't see any specific pattern really that I liked. It was absorbing a few times at different levels but I didn't buying it because it just didn't seem that strong with the IPO pricing being under the range. The trades I took in it were actually shorts because like I said it seemed weak and that important $12 level was peaking. I shorted both times at stupid spots for a breakdown when I should have done what I wanted to do and short at vwap or at $12 which would have worked. I shorted it at 11.50 for a breakdown trade thinking it would flush under it but it was stupid to do that because $11.50 was holding very well and it did break but I was expecting a violent flush for 20-30 cents but it just trickled down and when it got back to an offer of $11.50 I just decided to get out as it wasn't doing what I thought and it seemed trappish which was the right call. It ended up holding $11.50 again for a while which would have been a good spot to go long for a scalp which is what happened. Overall it was poor trading but had I done the proper thing it would have paid decently.
LLY: At the open I didn't really know what to think so I didn't trade it then. It ended up popping and then fading off. I didn't mind missing that as I didn't really know what to do with it. Then some news came out that was supposed to be good but it started to sell off. I didn't understand why so I should have avoided it but I just decided to short when it broke $72 for the reason that if it's not going up then it has to be going down and I wanted to make back some losses from before. This was only to be a scalp trade as there was support that I knew of from past charts. I decided after I got into it that it was a stupid trade and I didn't know what was going on so I just took it off for flat essentially. What ended up happening was pretty sad given I wanted to go long and knew where there was good support. It went right to the support line I drew and that was the LOD. I'm not sure if I would have bought it there but it did work. The higher probability trade was when it reclaimed $72 and dipped back to that support level. That was a good dip buy area and from there it went higher and even went past vwap. I thought about getting in when it broke past some little consolidation which would have worked great as that was the beginning of the uptrend but I guess I didn't want to buy a breakout like that at that time of the day. It seems for LLY little things like that work although maybe the catalyst was strong enough to support it. Either way the lesson here is to avoid things you don't know and to be open to anything and all possibilities.
HON: Just a stupid stupid trade that I wanted to scalp to again make back some losses. It was stupid because I shorted a breakdown at the wrong time of the day, made the chart fit into a pattern that wasn't there, and support was also in that area so it wasn't worth it. Overall stupid trade and should not be done at all.
Other mentions:
AGIO: I also had this on top watch due to the news and the range this has. The only trades I saw were when it went to vwap. Now it was a tough vwap short but it should have been more characterized as a resistance that happened to be at vwap short. The other thing to mention is that there was news a few days ago and then it was bought up and then it gapped down so people will want to sell so that is something to look out for in the future.
ADBE and ORCL: Definitely a lesson here to keep things like this on watch because even though the gap wasn't that much they both offered picture perfect shorts and especially with ADBE I could have really sized into that as it was a perfect chart for a fade. Not disappointed with not trading just to know that in the future to keep these on watch.
Things to remember:
1. Look at longer term weekly charts.
2. When a stock looks like it is reclaiming or has an inverted H&S and it doesn't breakout then short it for sure.
3. No bullshit trades. Only trades you have a plan for.
4. Remember: You have your risk and your profit targets and where you would add or size down. That is all trading is. You see a setup you like, you define your risk and where you would add etc and that is it.
5. Keep the other earnings on watch like these tech stocks that may get beatup for not posting great earnings/guidance.
6. Look for scenarios where a stock has bad news then is bought up then has a gap down on more bad news. People will want to get out.
7. No FOMO and no picking tops. Give things enough room.
8. Avoid thinks you don't understand.
JBL: This was the stock that I was most interested indue to the fact that it was gapping up near resistance on the daily chart and it was up on pretty lackluster earnings guidance. At the open I was looking for either the premarket support to fail or a fail at the premarket resistance. I saw it get to 24.15 and it was absorbing very heavily on the offer there. Enough so to make it seem very credible. It was also at the premarket resistance and everything else it had going for it to fade so it seemed like a very good trade idea. I decided to go in with more size than usual because it looked very good and my stop was if it broke that .15 level. It came back down to vwap and I was in the money by around 40 cents or so. I could have taken it off here but I have 0 regrets of doing so. I was instead looking to add possibly if it made a new low and peaked that .70 level. Instead it held and then it just broke out and went higher. Small loss and not a big deal. I didn't go long on it on dips or anything because I was still skeptical that this move was worth it but the trend was bullish until otherwise so I stayed away. Eventually it came back under $25 and couldn't get back above it. I decided to short around 24.90 with the idea that it could get to vwap at least as the move was definitely overdone. It worked for a little but it looked like it could have reclaimed the support so I just put a breakeven stop. It got triggered and I got out but that $25 never broke back above. It was one of those patterns I have seen where it looks like it reclaimed/inverted H&S but it just holds the resistance and then fades. After all was said and done it definitely looked like a short pattern. I am not really disappointed about getting out for flat. I still think it was good process. The only thing to do in this case is to keep an eye on it and see if it still doesn't breakout and if so and it looks like it is about to crack then go in. Overall the trading in this stock was the only good thing for the day that I did. Even though it was a loser I didn't mind losing on this at all given how good the setup was. One other thing to remember is to look at longer term weekly charts as this had clear resistance in the $25 area which helped with the idea and made it work so well for an afternoon fade.
OPHT: Horrible trading in this. I saw the news and when it opened it started spiking higher. I figured this was bullshit and just some freak thing so I shorted without a real reason other than it spiked on this bad news. It then went higher and stopped me out for the loss I deserved. I tried it again after it made a fake high by a penny and consolidated at the high but was way way too tight with the stop because I topticked the HOD and I would have had a nice fade then. But even this entry was poor. I just kept trying to pick the top again and didn't let it top out a bit at least. There was a potential entry after it had that fake high and then kind of retested 5.22 a couple of times. That was a good pattern. It would have just been a scalp I think to vwap or just underneath it which would have worked fine. I say scalp only because it seemed odd that it would just go higher like that. At the very least I would have taken 3/4 off I think and maybe let the rest ride for a breakeven stop which would have gotten hit. Lesson: Don't pick tops and don't get the FOMO. Wait for the setup.
TRVG: A couple of random trades that amounted to being down $2 in the name. It started going higher after the open but I didn't see any specific pattern really that I liked. It was absorbing a few times at different levels but I didn't buying it because it just didn't seem that strong with the IPO pricing being under the range. The trades I took in it were actually shorts because like I said it seemed weak and that important $12 level was peaking. I shorted both times at stupid spots for a breakdown when I should have done what I wanted to do and short at vwap or at $12 which would have worked. I shorted it at 11.50 for a breakdown trade thinking it would flush under it but it was stupid to do that because $11.50 was holding very well and it did break but I was expecting a violent flush for 20-30 cents but it just trickled down and when it got back to an offer of $11.50 I just decided to get out as it wasn't doing what I thought and it seemed trappish which was the right call. It ended up holding $11.50 again for a while which would have been a good spot to go long for a scalp which is what happened. Overall it was poor trading but had I done the proper thing it would have paid decently.
LLY: At the open I didn't really know what to think so I didn't trade it then. It ended up popping and then fading off. I didn't mind missing that as I didn't really know what to do with it. Then some news came out that was supposed to be good but it started to sell off. I didn't understand why so I should have avoided it but I just decided to short when it broke $72 for the reason that if it's not going up then it has to be going down and I wanted to make back some losses from before. This was only to be a scalp trade as there was support that I knew of from past charts. I decided after I got into it that it was a stupid trade and I didn't know what was going on so I just took it off for flat essentially. What ended up happening was pretty sad given I wanted to go long and knew where there was good support. It went right to the support line I drew and that was the LOD. I'm not sure if I would have bought it there but it did work. The higher probability trade was when it reclaimed $72 and dipped back to that support level. That was a good dip buy area and from there it went higher and even went past vwap. I thought about getting in when it broke past some little consolidation which would have worked great as that was the beginning of the uptrend but I guess I didn't want to buy a breakout like that at that time of the day. It seems for LLY little things like that work although maybe the catalyst was strong enough to support it. Either way the lesson here is to avoid things you don't know and to be open to anything and all possibilities.
HON: Just a stupid stupid trade that I wanted to scalp to again make back some losses. It was stupid because I shorted a breakdown at the wrong time of the day, made the chart fit into a pattern that wasn't there, and support was also in that area so it wasn't worth it. Overall stupid trade and should not be done at all.
Other mentions:
AGIO: I also had this on top watch due to the news and the range this has. The only trades I saw were when it went to vwap. Now it was a tough vwap short but it should have been more characterized as a resistance that happened to be at vwap short. The other thing to mention is that there was news a few days ago and then it was bought up and then it gapped down so people will want to sell so that is something to look out for in the future.
ADBE and ORCL: Definitely a lesson here to keep things like this on watch because even though the gap wasn't that much they both offered picture perfect shorts and especially with ADBE I could have really sized into that as it was a perfect chart for a fade. Not disappointed with not trading just to know that in the future to keep these on watch.
Things to remember:
1. Look at longer term weekly charts.
2. When a stock looks like it is reclaiming or has an inverted H&S and it doesn't breakout then short it for sure.
3. No bullshit trades. Only trades you have a plan for.
4. Remember: You have your risk and your profit targets and where you would add or size down. That is all trading is. You see a setup you like, you define your risk and where you would add etc and that is it.
5. Keep the other earnings on watch like these tech stocks that may get beatup for not posting great earnings/guidance.
6. Look for scenarios where a stock has bad news then is bought up then has a gap down on more bad news. People will want to get out.
7. No FOMO and no picking tops. Give things enough room.
8. Avoid thinks you don't understand.
Subscribe to:
Posts (Atom)