{"id":9398,"date":"2011-01-31T22:34:49","date_gmt":"2011-02-01T03:34:49","guid":{"rendered":"http:\/\/www.smbtraining.com\/blog\/?p=9398"},"modified":"2011-01-31T22:34:49","modified_gmt":"2011-02-01T03:34:49","slug":"my-trading-philosophy","status":"publish","type":"post","link":"https:\/\/www.smbtraining.com\/blog\/my-trading-philosophy","title":{"rendered":"My Trading Philosophy"},"content":{"rendered":"<p>(This blog was written on 1\/25\/11. But I&#8217;m lazy so didn&#8217;t post it until tonight)<\/p>\n<p>When a stock has fresh news and huge volume it is a great trading candidate for me. \u00a0My experience tells me that there will be more trading opportunities intraday in these situations and the risk\/reward will be more favorable than most other trading scenarios. \u00a0In these scenarios I have a very strong bias towards taking a position with the direction of the trend. \u00a0If the trend intraday, multi-day and longer term line up it will be very difficult to get me to take a position in the opposite direction.<\/p>\n<p>One such opportunity arose this morning in MNTA. \u00a0The stock was trading down severely on some fresh news. \u00a0I&#8217;m not sure what the news was specifically but people wanted to get out. \u00a0The stock had been trending down for the past two weeks so perhaps some already had a heads up on the news that was released (this is my acknowledgment to our readers and my many friends who believe everyone except them has some unfair informational edge in the market), and was trading below key support for the prior six months.<\/p>\n<p>The pre-market action gave me a very well defined short entry around 13.90. \u00a0There was a very well defined downside target to 12 based on the crazy move that occurred back in July, which I assume was on some other piece of news. \u00a0So when MNTA traded up to 13.90 and then had trouble holding the bid above this level I got short. \u00a0I knew my risk was at most 10 cents and my initial downside target was around 70 cents away. \u00a0I knew if the trade worked in my favor quickly I would be in a position of strength to either short more if it popped up again, or better yet short below the opening low.<\/p>\n<p>This brings me to my next point. \u00a0There are a lot of people in the market who would trade this situation completely differently than me. \u00a0I don&#8217;t believe I have a monopoly on the &#8220;correct&#8221; way to trade this or any other setup. \u00a0An experienced trader on our desk actually asked me why I was shorting at 13.92 as he had been long since 13.20. \u00a0I assume he was fading because when stocks drop or rise very quickly their natural tendency is to retrace some of their move. \u00a0He may have also been thinking in a strong market stocks that gap down have a better chance of bouncing.<\/p>\n<p>I also know there are entire firms built around the trading setup of stocks reverting to their intraday mean. \u00a0They will scan the market for things a few standard deviations away from their mean and take counter-trend positions. \u00a0That trading style doesn&#8217;t work for me. \u00a0But I&#8217;m sure there are many making a great living doing just that. \u00a0If that style suits your personality and you can figure out how to make money consistently then you should embrace that trading philosophy. \u00a0It just won&#8217;t be me.<\/p>\n<p>Back to MNTA. \u00a0So my thought process is get short into the initial opening pop and then be in a position of strength as the stock trends down and makes a series of lower lows. \u00a0I will continue to follow up on this stock until it breaks the low from the initial gap down and finds lower ground.<\/p>\n<p style=\"text-align: center;\"><a href=\"http:\/\/www.smbtraining.com\/blog\/wp-content\/uploads\/2011\/01\/mnta-gap-down.png\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter size-full wp-image-9544\" title=\"mnta gap down\" src=\"http:\/\/www.smbtraining.com\/blog\/wp-content\/uploads\/2011\/01\/mnta-gap-down.png\" alt=\"\" width=\"520\" height=\"364\" srcset=\"\/\/www.smbtraining.com\/blog\/wp-content\/uploads\/2011\/01\/mnta-gap-down.png 650w, \/\/www.smbtraining.com\/blog\/wp-content\/uploads\/2011\/01\/mnta-gap-down-300x210.png 300w\" sizes=\"auto, (max-width: 520px) 100vw, 520px\" \/><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>(This blog was written on 1\/25\/11. But I&#8217;m lazy so didn&#8217;t post it until tonight) When a stock has fresh news and huge volume it is a great trading candidate for me. \u00a0My experience tells me that there will be more trading opportunities intraday in these situations and the risk\/reward will be more favorable than most other trading scenarios. \u00a0In &#8230; <a href=\"https:\/\/www.smbtraining.com\/blog\/my-trading-philosophy\" class=\"more-link\">Read More<\/a><\/p>\n","protected":false},"author":143,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1,8,15],"tags":[1376],"class_list":["post-9398","post","type-post","status-publish","format-standard","hentry","category-general-comments-2","category-steven_spencer_steves_blogs","category-trading_theory","tag-p","no-post-thumbnail"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.1.1 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>My Trading Philosophy | SMB Training<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.smbtraining.com\/blog\/my-trading-philosophy\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"My Trading Philosophy | SMB Training\" \/>\n<meta property=\"og:description\" content=\"(This blog was written on 1\/25\/11. But I&#8217;m lazy so didn&#8217;t post it until tonight) When a stock has fresh news and huge volume it is a great trading candidate for me. \u00a0My experience tells me that there will be more trading opportunities intraday in these situations and the risk\/reward will be more favorable than most other trading scenarios. \u00a0In ... 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