This trade was more instinctive than my usual trades. I'm trying to trust my instinct more. AMAT looked very weak relative to the market and it had been testing the 10 level repeatedly over the last week. Looking back it was a 3 pivot point B&B entry. This was a 2.32R trade.Setup:70
I was actually looking at going long at the break of 10.5 yesterday in AMAT when I realized this is one of those setups that isn't quite right and is more likely to fail. The volume contraction is there but the bars aren't very narrow range, and it looks overextended. I'm always looking for a strategy that works well in choppy, rangebound conditions and trading failed breakouts is one contender. This could work well because it doesn't require a complete shift in thinking. I'm always looking for breakouts anyway, so if I find a weak setup, I can take the opposite side of the trade.
This was a breakeven trade. USO was looking very weak and I liked how it was testing 33 for the third time. Oil will often make a big move around 2:00-2:30 at the end of open outcry trading. There were also narrow range bars at the ORL in the indexes. Oil and the indexes were both setting up so I was looking for a stock that would move with oil. I chose POT since materials was one of the weakest sectors of the day and MOS and CF had already gone to new lows. I liked the rounded top look. Unfortunately, POT didn't move as much as oil and I was quick to move my stop to break even due to the choppy conditions so I got stopped out on a retrace.
This has not been a good month for me. The last two months I broke even so I was beginning to doubt whether I could make money in this high volatility, increasingly unpredictable market. I overtraded the first week of December. The setups I was taking actually were fairly good, but everything I touch isn't working right now. Either I'm off or the market is off, either way I need to stop for a while and preserve my capital. I've learned that one of the paradoxes to trading is that the harder it is, the less rewarding it is.
My first two trades using my simplified BOR technique have failed so of course I feel like abandoning it. Today seemed like a good day for this type of entry with the European markets up about 7.5%, relatively good news in the morning, and a gap up followed by a shallow retrace. I thought it was impressive that buyers stepped in at the ORL instead of the gap filling more. But buyers vanished and I got stopped out. The one warning sign was that the TICK was mostly negative. There were a couple of volume spikes in the QQQQs, when AAPL was bouncing off 100. Since there was a breakout I had tightened my stop for only a .46R loss.
This was a frustrating failed trade. This was a good setup for several reasons. There is a descending triangle formation with a series of lower highs on the 15 minute chart. It also has a cup and handle look. This was the third time the 92.5 level was being tested. You can see the nice breakout bar on the 5 minute chart after a mini bear flag. The tape was looking really good at the time of the breakout. My stop was pretty tight so I got stopped out when the indexes bounced off of the ORL, then everything proceeded to plummet. The most frustrating trades are the ones where you do everything right, you have a lot of confidence in the setup and it still doesn't work out. It's easier to take a loss on a bad setup.
Today was a tricky day. It was far more bullish than I was expecting. It's like yesterday never happened. My new BOR technique would have worked nicely today but I wasn't expecting such a strong move. Then after the big initial move, I wasn't really expecting much continuation so that left shorting (or a better option probably--not trading). I almost didn't post this trade but I saw that Tyler at "Am I Bald" made the same trade. It really wasn't a bad setup, narrow range bars with volume contraction with the 5 period MA directly above. On the daily chart, RIMM is breaking out of a descending triangle. I also liked the big volume and thought that it could be immune to the overall market. RIMM hardly budged when the market made it's big move in the morning. In the end, I think today was more about the market reacting to all the GM bailout talk than supply and demand.
I traded this as a pennant. The one thing I didn't like about the setup was the lack of volume contraction, but I liked how weak CF was compared to POT and MOS. At 11:15, USO put in a huge capitulation bar on high volume while CF didn't budge. That really bothered me and I didn't want to sit through a choppy lunch, so I tightened my stop to break even and got stopped out. 
