The One Penny Difference
Sep 16th, 2010 | By Bella | Category: Mike Bellafiore's (Bella's) BlogsFDX broke down technically below 82.71-82.65 intraday. 83 was a prior important intraday level. The sellers won that battle. FDX found 81.80 in a nice downtrend after the technical break. And then we had another excellent opportunity for a technical trade. We had another A trade.
When a stock breaks a technical level like at below 82.71-82.65, makes a nice down move, and then returns to this level we almost always want to reshort. I reshorted into the upmove towards this technical break level. I entered 83.01 and 83.11 as my stops, playing for a downmove below the intraday low of 81.80 for 1/2 and the rest for a longer term swing trade. I missed getting stopped out by one penny.
Late into the close I saw some support at 82 and closed out 3/4 of my position, changing my original plan based on observation.
The tape helped me find these important levels. 83 was the most important price on the open on the tape. After FDX started an intraday downtrend it was 82.71 as the BMOC of price.
Trading is a game of probabilities. Sometimes the trading Gods smile down on you. My job is to execute. I cannot control good fortune like this. I am not as good as I was today. I am not as bad as when circumstance calls for too many stops to be filled.
Mike Bellafiore
Author, One Good Trade: Inside the Highly Competitive World of Proprietary Trading (Wiley)
