Friday, January 2, 2015

LINE long trade

The reason I did not have any trades earlier in the AM was because I woke up late due to browsing YouTube late last night. Otherwise, you could see the double bottom risk and trend break entry would've been ideal. Below is what I saw upon pulling up the stock's chart.

















I first looked at the daily to generate my bias - long. Why?
1) The daily chart is breaking out from a 2 month downtrend with tons of volume.
2) All the shorters still short from this AM thinking "It's going to crack .75 - .76" are still patiently holding.
3)Intraday chart is curling back up, held uptrend well after breaking a slow grind down with a double bottom.

















I entered on it's remount of trend line. Why did I not buy at .30's in anticipation of the break?
1)The closer you are to your risk, the better. My risk was 11 (mid blue line) and by entering at .30's my reward would have been much smaller and my risk, much greater. And how many times have we seen breakouts fail?
2)My risk was .16c to make .84c (bigger term picture with 12 target obtained from the daily chart)





















Above: Daily chart analysis
Below: Trade management

















My goal for this year was to do less scalping and put an emphasis on the bigger picture idea. I would rather let a stock hit my stop out point, rather than sell too early.
Why did I sell portions at the points I did and why did I add that last bit on?
Exit #1 (.40) Broke 1st target, sold half. If it couldn't hold .40 level, I would at least have profits.
Exit #2 (.55) It held, consolidated for a bit at .40's and perked with volume. Basically impatience (working on it) and wanting to lock in profits. Plan at this point was to ride it out til my original target.
Add #1 (.55) It perked up, I wasn't happy about how little shares I had left and wanted a bigger reward (greed). I added and got shaken out by a quick blip before it grinded to new HOD's

Correct.
- Planned accordingly with risk as a focal point, not reward.
-Was patient in timing the execution of my plan.
-Sized accordingly so I could think clearly about my plan without going down a rabbit hole of changes to it along the way. Ex. If it broke and holds this- be patient, if it doesn't hold sell.
-Had a bigger/longer term picture idea as opposed to scalping.
-Planned according to a defense first strategy.

Incorrect.
-Did not plan correctly when added onto core position. Risk was to .50, no wiggle room, little support at risk area.
-Sold right after added. Could've held remainder to original target if generated better plan upon adding

Fix.
-Should've been .40 risk upon adding.
-Do not add to core until there is a confirmation of your original thesis
-Trade chart instead of money.
-Stock never 'broke' trend, Do not exit until the stock gives you a reason to exit.









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