Sunday, March 21, 2010

VLTR long

Date entry: 16-MAR-10

Trade: Long VLTR with Apr 2010 $22.50 Calls - 10 contracts at $2 each

Set-up:  15-Mar-10 %R retest entry point. %R inside bands

Conditions: Efficiency Ratio, Stochastics, ADX/DMI are all very bullish..

Re-Entry: none.

Exit strategy: 22.40 is violated on daily chart.

Target for profit taking: Sell entire position at 50% profit

Current Stop loss: close below $24.03 (accel band set up bar's low).

Time Frame: Prepared holding for 3 weeks

Where found: Stocks on the move.

I did this trade based on %R retest, the retest is inside the accel bands. I just got off a webchat with Price Headley in which he said the best stocks retest outside the accel bands. This position nearly doubled overnight. I had a standing GTC order to cancel at $4.10 per contract. It did not fire. The stock reversed and

I did not take any profits.

I have learned a valueable lesson with this stock. I think I will be simply much more nimble and perhaps not hold onto positions for as long as I do. Just take the entire positions off at 50% and move onto the next opportunity, there are tons of opportunities I find and I nearly always have something else to rotate into.

I can also put in GTC orders for selling positions at 75% profits...I see those situations quite often as well.
I can't not take money off the table, waiting for something to materialize. Also, if I see a double and dont take it, then it is my fault for not then settling for 75% winner...There are lots of things that turn into this situation and sure there are always the runaways like DIN...but it is simply better to keep trading the big moves as they are happening than holding onto things waiting for them to move.

I have to really think through my trading plan as this week this stock gave my entire world a roller coaster ride. I had seen a lot of money on wednesday only to return to baseline by Friday. This is unacceptable.

When I am right and I see that kind of money just take the trade off. No sense in being greedy because there are lots of other opportunities that will do the same thing for me.

Also will only start considering retests that happen outside the accel bands or just barely inside (retest bar closes inside)

Daily and weekly Charts below.