NVDA traded up in pre-market but started showing a lot of weakness just prior to the open. This is a DOA (dead on arrival) setup. Short on a break of the pre-market low with a stop just a penny above the pre-market high. So the initial risk was about 30 cents. My target was $35.60 which matches up with support and the 10 day EMA on the daily timeframe. By mid-afternoon that target started to look too optimistic so I tightened my stop and was stopped out at $37.00.
The
AAPL long was a break of the third bar high. This is another stock I was watching in pre-market. The first two bars were doji like (indecision). The third bar rallied and closed on its high so I went long on a break of the third bar high. I had to leave my desk for an extended period of time so I decided it was safe to move my stop to break-even as price approached $88.00. Big mistake. If my entry was correct and I believe it was, I should have left my stop below the low of the previous bar (third bar). That would have saved the trade. So a nice strategic, dummy entry and a real dumb, dummy stop.
NVDA traded up in pre-market but started showing a lot of weakness just prior to the open. This is a DOA (dead on arrival) setup. Short on a break of the pre-market low with a stop just a penny above the pre-market high. So the initial risk was about 30 cents. My target was $35.60 which matches up with support and the 10 day EMA on the daily timeframe. By mid-afternoon that target started to look too optimistic so I tightened my stop and was stopped out at $37.00.
The AAPL long was a break of the third bar high. This is another stock I was watching in pre-market. The first two bars were doji like (indecision). The third bar rallied and closed on its high so I went long on a break of the third bar high. I had to leave my desk for an extended period of time so I decided it was safe to move my stop to break-even as price approached $88.00. Big mistake. If my entry was correct and I believe it was, I should have left my stop below the low of the previous bar (third bar). That would have saved the trade. So a nice strategic, dummy entry and a real dumb, dummy stop.
5 comments:
Jamie,
Your AAPL trade will serve to remind us that having a good entry is not suffice. Where we place our stop can also make or break the trade.
I sometimes see that you enter on break of pre-market high/low e.g. this NVDA trade. Under what kind of circumstances do you do that?
I look for stocks trading in a narrow range in pre-market and buy the open on a break of the pre-market high or low. I only do this with highly liquid NASDAQ stocks. These trades are planned ahead of time based on an analysis of various time frames. On the NVDA trade, I originally planned it as a long entry. But the last 15 minute bar just before the open looked like a bearish engulfing pattern, so I changed my setup to short. Failures generally result in fast moves so it worked out okay.
Agree 100% on your AAPL comment.
Thanks LB,
Acknowledging the error is the biggest step towards correcting it.
Good Trading!
Jamie,
I wish you were in toronto and not in montreal! I could have paid to be your apprentice.
Yaser,
No doubt, we'd make a great team.
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