Today was one of those days that I was hoping for, a trend setting right off the bell. As of right now it still looks that way but one ever really knows for sure.
So, after all of my hyperbole about "being there for the trend days" and seeing some really nice gains as a result, I missed the boat this morning... or did I?
The pre-market looked great, FTSE closed so no factor there at all, TICK all positive and strong for early trading, most sectors were up, swine flu down China stronger.
My journal entry included, "expect a small gap up or a strong start at $24.14, watch the range to $24.54". I set my limit order for $24.17 in expectation that the price would test the 200 around the $24.14 area...I watched as it hovered around $24.20-30 range. In this particular case I "should " have increased my loss allowance a bit to enter the trade at the 20 cent mark...but I did not. Where does one draw the line?
I also could have entered as the $24.54 level was breached as it did waver at that level before taking off again. Technically that would not have been price chasing as it was a level I established as support/resistance. But it was not in my initial entry plan.
Anyway, using my 50sma stop settings I see a 70 cent gain and the trade would have closed about 1045h. I would like to think that I would have given the price more room and stuck with the S/R line just under until the price either re-crossed above the 50sma or tested it from the downside and failed. I should look at using 30/50 crossovers for stop settings as well.
Analyzing the trade closer, as if I knew that I was going to be correct in my forecast and nailed the first entry, here is the chart:
Doing the math on the entries assuming that I start with 200 shares. The $24.54 entry takes me to ACB of $24.37 and my stop climbs to $24.42 for the whole position as soon as I enter. That leaves me with at least a few cents per share profit. Following up the the next support resistance level and deciding that the market is still strong another 100 shares gets added and the stop is as depicted. ACB is now $24.46 and the stop is climbing from $24.60 to $24.70 and caps out at the next S/R at $24.82. Paper gain at this point, if stopped at the end of the chart would be about 49 cps or $245.
So did I miss the boat? Am I disappointed that I did not chase the price or make some of the other nice entries?
I don't really think so as I am not really profit focused but I am learning focused. I got to watch a really nice morning uptrend and play the points along the way to see what I could have done. Yes, I miss not having a position in play. I don't expect that I would have entered the last 100 shares, but I expect that I likely would have entered the second trade addition...or at the very least still been in my core position. I was determined to trade according to plan and right now I am focusing on plays that include the 200sma entry. I need to start somewhere.
The market still looks good but not strong. I am going to watch closely as the price and 200sma approach one another later today as I think there may be an afternoon reversal in the works.
I think that I would be taking some of the position off along the way, perhaps a stepped row of stop orders in 100, 200 and 200 size closures to ensure profit and leave more room for more rallying.
Jeff.
No comments:
Post a Comment