Now two months into my new way of trading, my constant fear is that I am getting lucky, instead of getting better. Every morning I go through my gap list, filter out those stocks that don’t fit my trading criteria, eyeball the rest, and pick a slim few out of those, whose setups I feel have a high probability of success. As time goes on, I hope consistent successful trades will be my confirmation that I am on the right track, but right now, it is hard to tell. That is why nothing makes me more hopeful that my trading in on the right track, than when I see one of the great traders out there like Jaime or Trader X take the same trade as me. That was the case today as FAF turned out to be a winner for both myself and Trader X (see his trade here).
After a gap up, FAF based for a while, and then on the 9th bar, printed a NRB along with a volume dry up, (which is becoming one of my favorite set ups). I entered when the high of the 9th bar was broken on the 10th bar, and price continued to move sideways for a little while. Price finally started a strong move up, and I was looking to exit at the FIB resistance at 50.88. When the top of the 15th bar just tickled the bottom of the target, I took an exit for a 3R return. This was a good trade, however, the stock was moving very strong when it hit the FIB target, and I debated if I should have sold 1/2 and waited to see if it continued. In retrospect, I probably could have gotten another 1.5R out of it.
I hope this is the continuation of the the clouds parting, and my picking ability getting more criteria based, instead of luck based.
