Wednesday, February 8, 2012

tighter and tighter

How long has the market been tempting a run in the morning, only to pull back below lows of the day and threaten to deteriorate into a nasty selloff, only to rally back into neutral or break the high and finish near highs? Weeks, that is how long. I can only recall one day that turned into a trend down day (off the top of my head). So today the same thing happened. It will keep happening until it does not. That is the trend. Could end tomorrow, could be a week, a month, or 6. Could have 2 off pattern days, then right back to the pattern. So in keeping with this current pattern, I have been playing it light in the morning and heavier in the afternoon. It has served me well. I took modest positions in the morning, sold out of the weakness for a small drawdown, held on to what held up, and then laid it on thick in the afternoon, HSOL being the big winner today. Good day. I think the whole trading room was in on HSOL, so this was not some genius trade I ferreted out. It was such an obvious tight pattern, and the TAN was the leader on my industries watch list. So for now I continue in this manner.

Friday, February 3, 2012

Best and worst trades, February 3rd, 2012

Good day. Being patient in the morning, being very careful with overnighting, and guarding profits was the key. Kunal at BOWS mentions about quickly guarding profits and ticky-tacking your way up. He is quick to take profits and move along. This has been very good for me to hear, as I often want to hit the homerun. I have the habit of seeing the greatest technical potential in a move, and pre-setting my expectations (sell targets), when I should be letting the price action influence my sells more.

My worst trade was not taking THLD. It was on my morning screens, I watched it shape up, I even saw a pre hod b/o setup that I did not take, and then did not take the hod. (sigh) It worked out nicely. I had good profits by that point and just wanted to guard them and let what was working work. Mistake, overtrading was not my problem and I had cushion, I should have taken the exposure.

The identification of hot industries for the day and identifying good setups that have not moved yet (sympathy play) have also been stressed recently. Common strategy, but for some reason I have not really focused on it, so have been making more of an effort. I set up a real time watch list with as many industry index tickers as I could find. I noticed the XHB was hot, went through my list of homies, and found PHM had a nice looking chart but had not made a move. It was not exactly a homerun trade, but I god a double dip on it, and I will take these every day. Here are the entries and exits: