Thursday, November 6, 2008

Thursday trade - ACI

Today was a good day to be trading. There were many stocks that made nice linear moves down just like this one. The nearest support level on the S&P was 900, and the index moved down there like being drawn to a magnet. After seeing the European and Asian markets down around 7%, there wasn't any doubt that I wanted to be short. I entered on the break of the ORL. You can see the two narrow range bars with the 5 period SMA directly above the NR7. The only thing that bothered me was that the NR7 had slightly more volume than the previous bar. This was a 2.6R trade. I exited for the following reasons:

  • 3R target was approaching

  • USO looked like it would find support at 50, started going sideways

  • Approaching lunch hour where mass covering often occurs, didn't want to hold through lunch

  • Related stocks like CF and PCX were building bases

    • Setup:70
    Posted by at

    2 comments:

    Tyler said...

    Rick,

    I missed this yesterday. Great trade! I have a tough time hanging in there and seem to want to take profits too soon. Way to go!

    How long have you been trading?

    Tyler

    November 7, 2008 at 2:09 PM
    Rick said...

    Thanks, that's one of the hardest things about trading--letting your profits run. It helps when a stock breaks out and you can move your stop to break even to keep telling yourself, worst case scenario, this is a winning trade. Also, you have to think of each trade uniquely--just because your last trade reversed on you, doesn't mean the one you're in currently will do the same thing. I started approaching investing from a short term perspective since May '07 and went full-time in September '07. I should do one of those introduction posts...

    November 8, 2008 at 7:36 AM

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