A guest post written by trainee SW:

Communication is one of the 7 fundamentals taught here at SMB. The nice thing about trading here is that traders are always sharing ideas and learning from one another. Today was not an exception.

I was involved in PEP shorts in the morning. However, PEP couldn’t hold below the 62 level from yesterday. 62.20 was the seller in the late morning, so after seeing PEP finally get above 62.20, I began to look to go long for the reversal, after the “breakout” above 62.20.

I explained my trade to my fellow trader PTO, and he did not agree with my “pullback to the breakout price” trade. He explained:

“Don’t buy every pullback into breakout prices. Instead, buy back at the breakout prices that move off a key level, where there was an explosive move in which everyone remembers. Otherwise, it is not worth the risks of staying in the trade. You want to buy breakouts that really pop away from price from a level, and pull back to that breakout price. 15c pops in PEP isn’t worth your time.”

After hearing this and re-evaluating my plan, I offered out 62.33 in PEP immediately for small profits.

I found that one of my issues is buying all the breakout prices, and taking thousands of papercuts. I quickly jot down PTO’s advice into my journal.

I learned more about myself  today. This is the nice thing about communicating at a desk.