Trade: Short BAC...winner

21-OCT-10:

I entered BAC on Tuesday based on a retest I had been waiting for since the first breakdown. I also didn't want to get in ahead of earnings on BAC...

Last Thursday BAC broke down really hard on the hourly chart...astute traders could have gotten in Friday morning as a retest occured at the open...that was the really easy money.

However, BAC was reporting on Tuesday. I wanted to be patient and wait for the indicators to line up and I was actually hoping it would happen after earnings report...well it did retest into earnings on Monday afternoon. Lucky for me it kept having a little bit of strength into Tuesday afternoon.

Post earnings enthusiasm wasn't that great as volume wasn't strong. This is a good case of interpreting multiple timeframes to my advantage. First, the overall picture on the daily and hourly charts had confirmed bearish...so any "bullish" behavior was an opportunity to get short.

The 11 AM hour showed a Doji candle...followed by a decent red bar for 12PM...Also, the DMI kiss was nearly in effect...So I watched the 15 minute chart unfold and I looked to my trusty 13 EMA on that timeframe. It closed under it right around 12:45PM I decided to take the trade figuring risk reward was decent.

I took the trade when BAC was trading at around $12.30 the top of the day was put in at $12.45...15 cents risk...not bad.

I also looked at the options chart for the Nov $14 put...it was retesting on the bullish side.

Then I picked a target figuring the recent low of $11.74 was a decent place for this baby to go if it were to go down. So I had about $0.15 risk and $0.55 reward.

This was a very easy trade to place. I emailed Bob Lang about it and he said it wasn't good for him...overcoming that comment was probably the hardest part of the trade.

Anyway I fired off 29 contracts of Nov $14 puts for $1.78 each...total outlay $5162

I took profits later that same day as my target of $11.74 was reached I sold 9 contracts for $2.30...$2070

Today I sold 8 more around the accounts for $2.60...gained another $2080

I have 12 contracts still riding the wave here.

Right I have recovered all but $1012...which means the 12 remaining contracts have a cost basis of $0.84.

Currently they are trading at around $2.65...which makes the position worth $3180..overall this is a 41% winner thus far. In only a few days.

On $14 puts that means I can watch BAC come all the way back to $13.15 with comfort knowing that I will not loose one dime...

It just so happens there is a tremendous amount of chart resistance at $13...so at the very least I think I make $180

But at the very most I make quite a bit more.

My current target for BAC is right around $11. I used Fib extensions to get me that target since no time frame is now helpful..it is outside all the bands on all the charts and there is no chart support anymore. The 13 EMA on all timeframes is at or below $12 further making these worth something like $2.

BAC could very well be a shitstorm given the foreclosure/trustee loan documentation bullshit. During their conference call they said all was hunky dory with their foreclosure process. Then later that afternoon PIMCO, the NY Fed, Blackrock, and a few other decided to call their bluff and sue their asses for $47 billion in toilet paper they claim BAC has screwed the pooch on.

That is really why I have made some money on this...BAC is like BP during the early days of the oil spill...I think the easy money has been made but more money may still be there for the taking...

Those who have not yet gotten on board...tread carefully and pick decent strikes...and be patient for a retest.

Charts:

1hr:

15 min:

Nov $14 Put Hourly chart:

4Hr BAC chart (Look at the volume here):

Trade: Long ATPG

14-OCT-10
Took advantage of the DMI kiss/CCI/%R retest all on the hourly chart...The daily also has %R retest going on.

Decided to pick up ATPG...this came onto the radar recently as it broke out big time over the last few days on big volume.

Anyway, I am a bit hesitant on longs now since many indicators are showing up as overbought/overly bullish...However this is a strong trend and I am hoping to be proven right here.

Got into 21 Nov $14 calls at a price of $2.75 each.

Charts later..

Trade: Long CHKP...winner

12-OCT-10:
Get out of CHKP calls at a price of $3.50...it continues to rally but I employed the discipline of getting out at at least 30% gain...I need to do this more often.

Since I picked these up for $2.35 each and we had 22 accross the accounts..that's a cool $2,530 in profits.

Today I am looking at TSL and it is rallying hard and I would have once more been green on that trade...but the key is that I was already green on that trade and I didn't do what I did today with CHKP...just get out...move onto another opportunity...There is no shortage of opportunities...and that's the key to the trader's mindset.

Get out when the going is good.

Then find another party to join.

Here is hoping that CHKP is the first in a long string of a new mindset for me.

7-OCT-10:
First off...Got orders to enter FCX today from Headley in the Sniper service.

BOT 9 contracts of OCT $85 calls for $6.65 each..this was a good entry point as it was retesting.

Some would say going long today would be a silly thing to do...with NFP coming out tomorrow and all that risk out there...and all the overbought conditions and resistance overhead etc.

Speaking of which...After NFP comes out tomorrow morning...I will have my own persepective on the jobs situation and I can truly say that it is unique in that nobody else talks about jobs like I will tomorrow.

I said fuck you there are really strong trends out there and many of them are worth a few points and that's all I am looking for now.

New philosophy is that I want only about 30% gains on these options...most of the time that is a very small move in the stocks like 3% or maybe 5%...depending on delta etc.

Anyway last night I was back onto the scans (hadn't done that in a while)...so in scanning I now go over a few scans...I still go over the daily scans for breakout and retest candidates based on accel bands and %R...then I do a few high volume scans as well.

Anyway, in digging I then look at things that are jiving on daily and hourly time horizons.

Enter CHKP...I liked the chart in that it had broken out was in a strong uptrend...and had a decent retest on the hourly chart already...(DMI kiss was in effect).

So this Am I waited to see the action on the 15 minute chart and my final arbiter is the 13 EMA...I like to see a close over the EMA then a confirmation close above that bar's high. We sort of got that with the last bar of yesterday closing right on the EMA...then confirmation this morning at the open. I waited for that fat green bar to pull the trigger.

BOT 22 contracts of NOV $36 Calls for $2.35...looking to exit at $3.05 ish

Charts:

Hourly:

15 Minute:

Daily:

Trade: Long TSL...loser

8-OCT-10:
A fat finger and a little help from the market reduced the overall loss on this trade. I was placing limit orders in to sell at $4 thinking the morning gap would sustain itself into a rally where I can make a decent buck on this...well it triggered a market order at $3.60...In any case I got out of some at $2.70 and some others at $2.80...

Overall total loss was $750...this doesn't sound so bad except when you think that I at one time was looking at $2250 in profits....

This was a shitty trade in only the fact that I did not get out when the going was good...

I keep saying that I learn this lesson, but it is clear that I have not yet learned this lesson.

Getting out of a good trade is an extremely difficult thing to do I have to unlearn the "let your profits run" shit that is in my head.

That discipline is something I will be employing moving forward by simply taking the profit at 30%....if you think about it most of my positions wind up being about $6000 in size (accross all the accounts)...a 30% profit is $1800...that is well within my realm of happiness...If I can keep my losses to 15% this puts me at a nice 2 for 1 risk/reward scenario on every trade...I can make that better by taking 10% losses...but volatility would create many more loosers for me with such a tight loss point.

In any case, regardless of the situation (except when its Headley and Lang calling the shots)...I will be taking 30% profits on my trades.

I must do this. I simply MUST DO THIS.

30-SEP-10:
Yesterday TSL took another step towards the sun and broke out pretty heftily. It then proceeded to fade into the close. The last hour presented a %R retest. Now on the hourly this can cut both ways. You can get lucky and %R retest holds, or you can watch as CCI painfully gets retested...or DMI or whatever.

MCP was one of those situations. I got in on CCI retest thinking I was high and mighty and boom got pasted.

Anyway enough MCP. TSL is a better trade already...in good TSL fashion it promptly gaped up this morning and has been hovering at these heights since.

The retest on %R has held ($28.84), this actually happened outside the hourly bands...a good trait for any retest. Today it retested again towards the 13 hour EMA...That green line just keep supporting or dissing stocks I love it.

Across all accounts I have 18 contracts of the October $26 calls for $3.20 each.

Let's hope this works out better than MCP..I can make up for MCP with a $2 appreciation in this one...that's like cheesecake for TSL.

Charts:
4hr

1hr

Trade: Long F...winner

30-SEP-10:
I put in a trade trigger during my time in Paris for this to get out at $1.70...this was because these were weeklies and I didn't want to be in them for a long time and the market has been choppy.

Across all the accounts this was about $1,000 winner as the trigger was fired on the 21st of September...not bad for 5 days.

Not much per account but overall it was a good trade.

Chart:
Hourly

16-SEP-10:
In my scans today I picked up a high volume rise in F...The uniqueness of this move is seen on the hourly (and even the daily) chart. The volume was big today in Ford and the bollingers on the hourly chart had gotten really tight and in sinc with the accel bands etc...so I watched the 15 minute chart after the breakout to see if I could get a retest to get in. I watched it come towards the 13 EMA and bounce and while there wasn't a true retest at that stage, I figured it was decent enough to get in at that point.

So I played the weekly options expiring next week (issued today). Picked up the Sep 24th $11 calls for $1.50 each.

Unfortunately I had a meeting and couldn't wait for a true retest...which did happen just after I left my desk...(of course) so I probably missed out on a dime here...but that's the breaks when you have a stupid day job.

A decent target for this is the 80 period daily upper bollinger band...if it is launching it could hit that by next week...that stands at 13.40...So from my purchase price it will probably net me $1 per contract...66% winner wouldn't be bad at all.

Charts:

Hourly:

15minute:

Daily:

Trade: Long OPEN...winner

15-SEP-10:
Update...in true trader mentality I decided it was time to get rid of OPEN and take my profits...Sold the contracts today for $9.00 a piece...a profit of $250 per contract....accross all the accounts (9 contracts) that's a profit of $2250..that's more than my wife makes in a month so I am happy with that...I think that's probably a new goal of mine...to make enough on one trade to cover my wife's salary.

This wasn't a homerun but it was a good double... but I have very little faith in this rally at this stage and traders take their profits when they can...OPEN may very well keep running but I am at peace with that. I am trying to think more like a trader and less like an investor...there are multiple opportunities just like OPEN that happen everyday...So I will get on board those and get off board just as quickly.

13-SEP-10:
Decided to enter into a long today despite the market being near the top of its recent range. Some stocks are simply not giving up the goose or (as in OPEN's case) looking like giving up the goose then finding support at key levels and demonstrating retests.

OPEN has been on my side radar for a while because it consistently appears on IBD's Stocks on the Move. While I have missed the ride until this point, today's gap and subsequent sell-off offered a nice opportunity for entry on a very short term basis today.

Today OPEN popped out of the bollinger bands and followed through by confirming in the 2nd hour of trading. Then the fade began and that took us until about 2PM. The hourly chart was showing a %R retest and the 15 minute chart was showing a DMI kiss in the making along with a CCI retest.

I checked this out with more scrutiny because I noticed that the options in the 50-60 strike range had high open interest and the bid/asks were decently tight...also the chart of the option itself was showing a retest on %R as well...

I then watched the action in the underlying itself as it neared the bottom of the day's action...the bid/ask spread was very wide and no business was transacting...within a few minutes they came together and the stock put in a fat green bar on the 15 minute chart.

I pulled the trigger at that point on the October $55 calls for $6.50 each...

A decent target is around $8.80 which is where these options traded earlier today prior to pulling back.

Charts:

1hr:

15 minute:

4hr:

October $55 Call 1hr chart:

Update Trade: BKC Long Calls...loser

3-SEP-10:
I wanted to put down my thoughts on this one more time. You may or may not have looked at this chart since I left this trade (but I will post it after this update anyway).

Remember, I entered this trade for various reasons, but the primary reason was that there had been a massive spike in options volume in the October $20 strike that continued over a few days as the underlying got faded. It had matched technical indicators on the hourly chart.

My main mistake on this was probably my choice of trade. The technicals deteriorated rather quickly and i followed my discipline and exited for a small loss. This was prudent for the next few days...and discipline is discipline.

However, what I should have done is go right along with the whale that was picking up these options in the first place. I shoudl have simply defined my risk differently. Instead of getting a higher delta position and stopping myself out if it reached my risk comfort level. I should have simply picked up the out of the money strike calls and put up money I was willing to loose and then just forget about it.

So instead of buying 10 contracts in the 90 delta strike for $1.15...I could have 1. waited for CCI retest, 2. gone with the October $20 strikes paid about 0.60 each contract and bought only 3 or 4 contracts as a "lottery ticket." Simply said..if this whale is right...then I get to ride with him. If he is wrong...then I loose what I would have lost anyway...

I for one will start looking for these types of scenarios a little more closely...the setup here was fairly clear...very high volume in the underlying accompanied by very high volume in the out of the money options.

Anyway here is a chart to enable me to make a shitload of money the next time I see a similar situation...or at the very least...loose the same amount of money.

There are few things more painful than watching a great call fullfill its prophecy WITHOUT being on board and imagining the money you would have made if you were...this is an incredible lesson in matching strategy to the situation and matching risk to reward...but just matching the risk is important enough..

Every trade should begin with the same statement "I am willing to loose X on this trade" I have various ways of making this loss occur and you should always find the way that matches the risk and maximizes the reward at the same time as leaving you in the trade....stay with the trade in this case was more important than the technical breakdown in the stock....because the whales were telegraphing the potential of a takeover...and they were giving you the basic price...If the whale was willing to spend a shitload of money on a strike that was way out of the money...even if it came close to $20 he would profit handsomely.

Anyway its a wonder that the SEC doesn't investigate these types of shenanigans...this was blatantly obvious that someone knew something about this LBO. 

Painful Chart:

27-AUG-10:
This morning BKC violated a retest on CCI. I exited for 0.95 per contract or a loss of 20 cents...$200...I am being very aggressive on defense here on a long that will probably work out...but the market is not really happy looking right now and longs are really hard to justify being in. BKC has a long term down trend in place and fighting that is tough to do.

Anyway I should have waited a little longer to get into this in the first place. Instead of %R retest...I should have waited for a CCI retest. One flaw on this was that DMI difference never went above 30 so that move on Tuesday wasn't confirmed on DMI Diff...so that may have been the thing that should have kept me away. I let the news about the high options volume cloud my judgment on this one...that whale buying calls in October has a longer term time horizon and a lot more money than me...so he wins...

17.25 was support now it is resistance so that's that...had i waited until this morning to enter I would probably still be in this trade and that is a lesson I will probably end up learning with this one...patience and waiting for that CCI retest is the lesson here...when trading the hourly that's what I needed to do.

Chart:

26-AUG-10:
As per last night's post, I noticed that BKC had triggered a buy signal on the hourly...I didn't really look at the news until this morning...from flyonthewall:

Burger King is recently up 44c to $17.33 . BKC October 20 calls have traded 234 times on contract volume of 20,620 contracts, above its open interest of 15,300 contracts. October calls are trading at 50c above its theoretical value of 18c according to Track Data , suggesting traders paying expensive prices on the expectations of an upside move.

Indeed, and the action continues this morning...this time in the September $20 strikes.

Anyway...I waited for a %R retest and got in to the October $17.5 for $1.15 each 10 contracts...Let's see what this whale wants to do with this company.

I am busy with work...post charts later.

Trade: Long XOM...winner

1-SEP-10:
Got the order to get rid of XOM this morning prior to the open and set an order for selling at $2.75...that turned out to be premature as it traded much higher...the order to sell from Extreme was based on yesterdays crappy action in the 15 minute chart...but in hindsight...not sure i want to be placing orders like this right at the open...silly....anyway nothing to write home about 15 cents per contract total $75 profit...

30-AUG-10:
In Extreme today got the signal to open a long position in XOM with the September $27.50 calls. Got in at a cost basis of $2.60 each. For the most part I have 5 contracts...However, I messed up the IRA amount and I wound up with 15 contracts...I may have to cut out on this one before receiving the exit instructions as it is too much of a position to have on...and even the boys at Big Trends are wrong on a few trades.

This is a weak trade already XOM sold off the rest of the day. The only bright spot is that it is barely holding 50 on the hourly %R, and volume was weak today.

Charts:

Daily:

1Hr:

Trade: NFLX Long Calls...Loser

24-AUG-10:
Update Looser trade and it was a big one sold for $8 for a loss of $1040. I didn't follow the signal that was saying to exit yesterday and this cost me about $600.

Stupid stupid. Bad Bad. In any case, while I almost made up for it with GOOG, this is unacceptable and I simply should not have traded this given the system was giving only daily signal and the hourly was very range bound.

Lesson learned and this is the first time in a long time that I didn't have the discipline to cut a loss properly.

21-AUG-10:
I was looking at NFLX on Thursday as it had retested on Wednesday and rebounded nicely on Thursday.

Then Friday Headley came across with an alert not to trade but some picks for the coming week (they included long BIDU and Short RIMM). Anyway that gave me the confidence to pull the trigger (silly as that sounds).

Picked up a couple of Sep $120 Calls for $13.20 each (2 contracts). Only in the taxable account. I had chased this a little bit but that's OK. Price's target is $140 on NFLX.

I am thinking that I should have picked these up across all the accounts but I didn't...oh well.

Anyway let's hope for the best here.

Charts:

Daily:

4hr:

UPDATE: UL long via calls

UPDATE 31-JUL-10: Exited at the $6.20 price. For a loss of 70 cents per contract. Had 8 contracts...loss of $560

UPDATE 29-JUL-10: Yesterday I went long some more calls based on %R retest of UL. So I had another $6.90 per contract on the line. Today UL got massacred and these contracts are at a mid of $5.95. The share positions I had got exited at the defined loss ($140 and $254) due to trade triggers. However, the calls are really in pain now. I tried but failed to exit today at a decent price. Tomorrow I have to unload these.

Charts:
Daily

4hr

UPDATE 19-JUL-10: Trade triggers fired today and caused automatic exit in the options positions...for a loss of $192 in taxable account (I somehow get filled at $6.46 with a limit of $6.20...kudos TDAmeritrade..you won't see these words printed here often).
Other accounts suffered the $6.20 fill.

So losses ranged from $150 (my Roth) to $300 (my IRA)...Strange my sister's IRA had the same trade trigger and it didn't fire...wonder why...but I am glad it didn't...let her account at least have fun with this trade.

UL closed today with a %R back at 83.44 and above the accel bands.

Equity trades are still on...so more updates to come....

Lesson here was too a tight stop and I think with some options I should put the bid and limit price further apart...
so here I should have said when the bid is $6...sell at limit $6.20...what I need to do is look at the options chart and figure out its own ATR...THAT'S AN ARCHIMEDES MOMENT...I'm gonna go run around town naked now.
16-JUL-10:
Outside the band retest noticed intraday.

Again, used ATR to determine position size here...this is new for me and I am hopeful it works.

Calculator came up with

8 contracts of the November $22.50 call...Entry price is $6.70

Stop is set at $6.20

This is tight and it is due to the low ATR on UL...

So here is hoping this takes off like a rocketship.

Market was tough today big drop, 2 yr treasury yield hit an all time low...yes all time low...As a contrarian I consider this bullish for stocks bearish for bonds...but everyone says how bonds are under-owned and the bull in bond land is far from over...anyway not good for stocks for sure.

BVF did great thanks to an upgrade...so the folios were all performing decent.

Daily

4hr

Trade: CIB long via calls...loser

I didn't get a chance to update my trades yesterday. But I have a few losers in the accounts now...

One was just entered today and it was rapidly a looser. CIB. Went long at the open based on the %R retest. I want to blame this mainly on entry and lack of stops put in place. However, no matter what the price I would have been stopped out today based on Headley's methods. Also, I wasn't at the computer today so that wasn't wise. Plus I had hoped to get in at the open instead of doing what I prefer and waiting a little bit to let the open dust settle a bit and finding decent prices prior to getting into a trade.

I haven't started putting trade triggers on all my orders to automatically stop my out. After today that is going to change.

Anyway enough of this self flogging. The money speaks for itself. Bad job Jorge. It is that simple really bad job.

CIB - Oct $50 Calls cost basis...$10.70...sold at $8.90...loss of $1.80 per contract and I had 3 of them...so $540 down the shitter.

Of course tomorrow it will add insult to injury and go higher, since it held the 13 day EMA...I am certain of this. 

Charts:

Daily

4hr

DIN long

Date entry: 12-FEB-10

Trade: Long DIN Jun 2010 $25 Calls - 2 contracts at $5.50 each, added to position on 18-FEB-10 2 more contracts at $5.30 each

Profits taken: 4-MAR-10 2 contracts sold for $8.60 each, 16-MAR-10, sold 1 more for $11.10...keeping last one on until %R sell signal is reached.

Set-up: 11 -FEB-10 %R and accel band firing at same time. Added to position on %R retest...retest occured outside of bands. DIN didn't close inside bands during retest. DIN is in a strong group.

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

Exit strategy: %R sell signal

Time Frame: Prepared holding months.

Where found: Stocks on the move

Emotions:
Best trade of the year for me hands down so far. I got in on this ealry in the February rally. I noticed that the restaurants as a group were moving and many had reported stellar earnings. DIN had yet a few weeks to report earnings. It also had a long base forming and the breakout put it above the accel bands and above a trendline of resistance on a longer term scale.

Either case, it retested, but never closed inside the accel band, I added to the position at that point. I have since gotten more than a double and am riding the last contract until a %R sell signal is in place. this has been outside the accel bands for over 1 month and a half at the time I am writing this.

Daily Chart below.

EZPW long

Date entry: 17-MAR-10

Trade: Long EZPW APR 2010 $20 Calls - 10 contracts at $1.55 each

Set-up:  16-Mar-10 %R retest...retest inside bands...near 20 day MA...big volume on retest.

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

Re-Entry: none.

Exit strategy: 20.12 is violated on daily chart.

Target for profit taking: Sell entire position at 75% profit.

Time Frame: Prepared holding 3 weeks.

Where found: Stocks on the move

Emotions:

EZPW is a strong IBD stock since entering the trade it has not rebounded nicely, and the %R has not gone back above overbought, this isn't a very clean retest and I may remove the trade in lieu of other opportunities.

Also the retest occured well inside the accel bands and this is also sub-optimal according to new learning from Price Headley.

Daily and Hourly Chart below.

CTXS Long

Date entry: 19-MAR-10

Trade: Long CTXS Jun 2010 $45 Calls - 2 contracts at $4.90 each

Set-up:  16-Mar-10 %R retest...NOT A TRUE RETEST...since %R was only 79.81

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

Re-Entry: none.

Exit strategy: 46.97 is violated on daily chart.

Target for profit taking: Sell entire position at 75% profit.

Time Frame: Prepared holding 3 weeks.

Where found: Stocks on the move

Emotions:

After watching a webcast with Price Headley, he said that he likes to get in ONLY on %R retests and mostly those that occur outside of the accel bands. In this case, the stock closed inside the bands, but only barely...and it rebounded nicely the day I got in.

However, this was not a true %R retest...but because it was close enough and it happened nearly outside the accel bands, I decided to take the trade. CTXS is also very solid fundamentally.

This so far is working out realy well as it bounced right away. The stock is in a very strong group and has solid fundamentals...the uptrend has been in place and is also strong.

Daily and Hourly Chart below.

ROST long

Date entry: 19-MAR-10

Trade: Long ROST Apr 2010 $52.50 Calls - 10 contracts at $1.85 each

Set-up:  18-Mar-10 %R retest.

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

Re-Entry: none.

Exit strategy: 51.82 is violated on daily chart.

Target for profit taking: Sell entire position at 75% profit.

Stop loss: close below $51.82 (%R retest bar's low)

Time Frame: Prepared holding 3 weeks.

Where found: Stocks on the move

Emotions:

After watching a webcast with Price Headley, he said that he likes to get in ONLY on %R retests and mostly those that occur outside of the accel bands. In this case, the stock closed inside the bands, but only barely...and it rebounded nicely the day I got in.


This so far is working out realy well as it bounced right away. The stock is in a very strong group and has solid fundamentals...the uptrend has been in place and is also strong.

Daily and Hourly Chart below.

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.

Emotions:
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.

Long GR - Update

UPDATE:  Exited GR calls at $2.75 each for $25 loss. GR broke hourly stop of $71.50 early in the day and traded around it all day. It recovered a bit but, rules are rules. Market is at cross roads and I am trying to reduce long exposure in case the rally tuckers out...which is what it appears to be doing....lots of signs pointing to a top...Still looking into potentially using daily close as the basis for triggering hourly stops...as this would have probably kept me in GR...a strong stock...with a so-so volume day...

Date entry: 5-MAR-10

Trade: Long GR Mar 2010 $70 Calls - 10 contracts at $1.15 each,...added another 10 at 0.85...got out then added 5 April $70 calls for $2.80

Set-up:  5-Mar-10 set up on Hourly chart on %R and accel bands.

Confirmation on Accel band on 2-MAR-10 at 10 AM (%R had been confirmed for a while already)

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

Re-Entry: 2:45PM  %R retest

Exit strategy: 1st if  69.23 is violated on hourly chart.

Target for profit taking: Sell entire position at $500 profit.

Stop loss: close below $70.92 (latest %R Retest bar's low).

Time Frame: Prepared for 2 weeks  holding period.

Where found: Sizzle index

Emotions:

This was very difficult as GR has been in an uptrend for a few days..with no retests on the daily chart and very few retests on the hourly chart. The news is that they would be presenting at a JPM and GS aerospace conferences .

This is in essence a short term trading not necessarily a day trade but very short term. Also these are closer to being at the money rather than very deeper in the money. Also this is a March expiration with only 10 trading days left a the time of execution.


I did not follow my exit rules when they were violated on Monday 8-MAR-10. I did not cut loose because I thought volume was low, and the daily chart still showed bullish confirmations. And I was only out of the money by a few cents...This was not good. I was looking at a near 50% loss on the position.

Tuesday 9-MAR-10, stock moves higher and the market was rallying hard....bringing back all my loss I did not take any profits. Towards the end of the day the market stopped rallying and reversed...I hit my break even point and I exited the trade...at this point I was following a new stop based on a %R retest...and it was violated...so I followed the rules this time.

Wednesday 10-MAR-10 stock gaps up. Go figure. rallys most of the day then at the end it gives a false retest of 79.69 on %R...I picked up 5 April $70 calls for 2.80. GS added the stock to the conviction buy list.

Thursday 11-MAR-10 stock gives a true retest in the first hour of trading, but I did not add to the position. The market is getting tighter and opened lower today...jobless claims came in flat...volume is weak and the rally looks tired...VIX is hitting 19 today.

I am looking for a double at this point...GR continues to be strong.