The pre-market was weak, so I decided to adjust my trading strategy from a breakout play to a pullback play. I placed two buy orders for FFIV: one at $48.20 (first level of support on the intraday view) and a second order at $47.65 (second level of support). My plan was to get an avergae price without risking missing out onthe trade altogether by choosing too low an entry price. From the chart you can see that only the first was order was filled. I cancelled the second order and placed a sell limit order at the morning gap fill price of $49.20. It worked out very nicely.
Thursday, June 22, 2006
Trade of the Day - FFIV
The pre-market was weak, so I decided to adjust my trading strategy from a breakout play to a pullback play. I placed two buy orders for FFIV: one at $48.20 (first level of support on the intraday view) and a second order at $47.65 (second level of support). My plan was to get an avergae price without risking missing out onthe trade altogether by choosing too low an entry price. From the chart you can see that only the first was order was filled. I cancelled the second order and placed a sell limit order at the morning gap fill price of $49.20. It worked out very nicely.
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2 comments:
Jamie,
If FFIV had fallen well below 47.65, would you have still held onto it hoping for a bounce or sold it for a loss?
Thanks,
AJ.
AJ,
Given today's rather slow paced trading, if FFIV had breached the second support level on a closing basis on the 15 minute view, I'd like to think I would have not only sold my position, but shorted as well, as this would have signaled that something was terribly wrong. But of course, in the heat of the moment, who knows. But I would definitely take a loss when my plan goes wrong. I don't like losing money, but I'm not afraid to take a small loss in order to avoid a big loss.
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