Becoming a consistently profitable trader can be summed up in the ability to manage these trades from today.
1. Whether to buy RIG above 60
2. Trading SVNT at the 18.50 intraday level
3. SINA after it broke above a bullish flag pattern to 46.75
4. What to do when SPY hit 112 today.
These were some moments from the trading day. How did you handle them? How could you have traded these opportunities better? What will you do at our most important market level of the past few days 113.20?
Mike Bellafiore
Author, One Good Trade
3 Comments on “Trading is About These Moments”
RIG-60 was a resistance level. This was a good short opportunity with all the selling tails. Greed got me short at 59.75 and I suffered the punishment from mother market for shorting a bad price.
SVNT- short when it dropped the opening price after losing the battle at the open. played momentum for more size below 18. Further punishment. Couldn’t trade the stock after the battles of buying and selling left me in the crossfire.
Throw V in there. Try not to hit the offer, bids will drop on you.
Don’t get stopped out making C trades or you’ll miss the A trades.
I got long on SVNT around the 18.70ish level after it broke out of its opening range. Made a dumb mistake of exiting my entire position after it initially failed at 19.14 and traded back below 19.
I was thinking of jumping into my short candidates when we opened down and we were at the 112 level on the SPY. Was planning to short steel stocks like AKS, X, CLF in case the market traded downwards.
Solid buying support for RIG at 58 the second time around. After the rise to 59, tape reversal gives signs to sell. Back at 58, another low risk buying opportunity. A moving stop can work – which can then be adjusted. A stop-out at 58.8 is acceptable, but if volume increases significantly on the rally it is a probable sign that traders want in on the buy, and the stop should be canceled. Ride it up to the low end of the resistance zone around 58.8. That last 20 cents will be difficult to reach, between 59.80 and 60. It fails several times in between, and this is probably when to get out. Now, most traders see the selling side winning. The low risk trade is shorting, clearly because we’re in high end resistance, but crucially, have not broken it. The final rally may have warning signs from the tape or the news reel.
Thank you Krystexxa. Followed by the approval of the new drug (for gout treatment) and the press release of their intention to sell it without needing additional financing – on late Tuesday, SVNT jumps like 30%. The ideal trade is overnight Tuesday into Wednesday morning. It’s a solid stock (a solid company) with some swings in the morning, but consolidates to a steady dollar gain. The last dollar, from 19 to 20 is probably worth sticking it out for. Shortly after 14:00 I can see selling after the volatile rallying dies down. If you’re in toward the closing bell though it’s worth sticking it out for the oft seen follow-through trend.
SINA has a major rally early, seemingly not news related, but maybe due to the sluggishness of other stocks. If the initial momentum trade is missed, the definite time to buy is after it clears the mid-August high of 46.02, shooting up to give another dollar. The timing of the sale is difficult here, but I think the top shadow of the last bullish candlestick is deep enough to indicate a turn in prices. When it turns reliably, there’s a solid short selling opportunity. There are some visible battles, but with its inexplicably meteoric rise, there is a hard fall to come. Hopefully, the tape helps out with some bearish signals in the second phase of morning trading. After that, a solid momentum rally and a settling of the stock at mid-range.
SPY early momentum with some challenging 8 or 9 cent turn-arounds. Range play between 112.80 and 112.50. Although the bid at 12.50 looks unpromising due to recent failure at 112.70, short-selling at 112.80 (the second time) is reliable. Buy back expected at around 12.50 – expectations met. After momentum gains upward, buy again. Intermediary range play is common, so maintain the turn at 12.70. Expect continued overall upward trend based on bullish market expectations. Range is broken, hold. Old resistance level becomes new support level. Around 113 is the highest level since late May. This seems like a good selling point. Later, going deep into support levels, risk starts to lessen. There are the beginnings of a rally here – and after 3pm, reversals are quite rare.