Trade of the Day: Don't be afraid to get back in

By Paul | Published: February 8, 2008


The signals were aligned for a short on the ER2 this morning. I entered a short but got stopped out on a quick bump. Then I immediately got back in once I see the stochastic is doing down and the price is topping on the fast time period.

This turned out to be a good decision as I rode it down 5 points. I thought the drop could reach the lower Keltner at first. But from watching the action, the move seemed to be testing the 50 EMA and failing to punch through. In addition, I expected there wouldn’t be much volatiliy today because the last 2 sessions had large swings and there didn’t much going on in the fundamental side today (no news). So I exited while I could. That wasn’t the bottom but was close enough because after a bit of struggle in a tight range, the price did bounce back up to the day’s high. I should have waited a bit more when the signs were more clear. I think I was just lucky that I exited near the bottom. It could have easily been a consolidation and then tanked further.

The proper exit point is when on the fast time period, the price stayed in a zone for longer than the previous resistance level and the intermediate time frame showed the hammer formation. Remember, if I enter on a time frame, use the same time frame for exit. It would have been a less profitable trade in this case, but the price could have went further.

Share|

Related posts:

  1. Trade of the Day: Bailed out of a wrong position
  2. Day trade YM Jan 16, 2008 result: -$500
  3. Day trading report Jan 30, 2008: -$560
  4. Short mini-Gold at $897.10
  5. Day trading report Feb 11, 2008: No Trade
This entry was posted in Futures. Bookmark the permalink. Post a comment or leave a trackback: Trackback URL.

Post a Comment

Your email is never published nor shared.

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>