Boy, did I REALLY blow this first trade.
MS gapped up, with a nice green bar that closed above the previous day’s high. An Inside Bar then filled the upper shadow of the first candle. I entered on the break of the ORH, and put my stop just below the IB. The break of the ORH failed, and it triggered my stop on the next bar. However, that bar closed on a doji type hammer, that was slightly green. It had also bounced off of the 5 MA nicely. I put another order in two cents above the fourth bar, and that was filled as the fifth bar shot up like a rocket. Here is where the problem came in.
Keeping in mind my New Year’s trading resolutions, I quickly checked myself to see if the second entry was a “revenge trade.” It wasn’t. I instantly knew that the first stop was too tight, as price was too far from the 5 MA. When it touched it and bounced leaving the doji hammer, I knew that was a valid set up in itself, albeit more risky being below the ORH. The problem came when the fifth bar broke out, I was determined to make it to the Fib extension, and that is where the revenge for the first stop out came in. Of course I let the price come all the way back down to the ORH, and slightly below it, where my adjusted stop sat. To rub even more salt into the wound, MS ended up moving quite nicely off that point, and was an easily manageable trade up to the Fib extension. (Note to self………D’oh!).
AMZN help redeem me. AMZN gapped up and rose just above the high of the previous day. It then consolidated with two IB’s, on a volume dry up. The eighth bar was a solid green bar, which closed at it’s high, and back above the S/R level from the previous day. I used the previous day’s low, and the morning high to calculate the Fib point, and entered on the break of the eighth bar’s high. An easier trade to manage you rarely find. AMZN basically made a B-line to the Fib extension, and it was such a strong move that I only took a partial. At this point I was kind of in no-man’s land in terms of price target’s, so I kept an eye out for a volume spike on the 5 min chart, or three WRB’s, both techniques that Jamie often talks about for an exit. After the the third WRB, I would have had to be a glutton to try to stay in for more, and I closed it out.
AAPL was sort of an end of the day scalp. Although the set up was pretty good, I am not too enamored of the this trade, being as late in the day as it was. After Mac World finished on an anti-climactic note (read: no Steve Jobs appearance), it was a classic “sell the news” trade. The real trade would have been to short the weak run from the eighth to fourteenth bar, after printing a inverse hammer that could not close above the ORH. That would have been a sweet trade. Instead I shorted the break of the eighteenth to the twenty second bar, after it could not close above the S/R level. The previous day’s low was the target which it hit. Not the best set up, but it was worth 1 pt.
