One quick trade on FAZ. I had little time to look at the markets with Day-Job as busy as it was; maybe 20 minutes to watch the charts between appointments.
This was all I could come up with, catching the upper end of the bounce off the nice move down in FAZ from 2:30 to 3:05pm. I could sense that the momentum had stalled and I got out. My hunch proved right as I sold the highest bid of the move.
This was all I could come up with, catching the upper end of the bounce off the nice move down in FAZ from 2:30 to 3:05pm. I could sense that the momentum had stalled and I got out. My hunch proved right as I sold the highest bid of the move.
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Out of my frustration from yesterday, I have decided to focus more on going with momo instead of trying to fade so often. Fading is my natural reaction to a big move...ever since I started trying to trade; it is like a nervous tick...Ha! In a large percentage of these cases with reversal plays, I am either too early or just at the turn. I am often putting myself in situations of temptation to add to losers by fading early and having the trades promptly go negative. Ideally, I'd like to wait for a higher likelihood of the turn to occur and thereby remove most of the situations where averaging for better price present themselves. And most importantly, I will be in a position to profit from the continued momo by trading with it instead of against it!
In trading with the momentum, I may enter at or very close to the end of trend. This still puts me in a position where I must accept the risk and exit my bad trade with a stop. But, it will at least be a loss taken in pursuit of the most gain... trading in the direction of momo and not incorrectly fading it.
I am exploring the idea of preset stops just to get in the habit of selling off a loser. ...take the choice out of my hands and make it a contingency of the trade. Part of my hesitancy to sell and take a stop loss is that I have not learned to trust that I can make up that loss with my winning trades. Successful traders understand that good winning trades will offset the less frequent stop-losses.
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After taking a closer look at Thursdays trading, I noticed that in some of the areas where Scott Farnham was playing a turn in TIVO, I was also sensing a change of direction and fading the monster move up. For that reason, I think I am beginning to feel the market. This "feeling" now must be followed by appropriate action. If my read of the direction change is not correct, I must sell it and learn to go the other way, as Scott did. I remember reading one of Scott's posts from 2008 (?) where he wrote in reference to the behavior of other traders (paraphrased), "... why they don't sell and go the other way, I'll never understand." There is clarity and simplicity in that. It says that the action of selling and reversing the trade is really as simple as clicking the mouse, assuming one has the right mindset. That is where I want to be someday. For this and many other reasons, I continue to follow and recommend others to http://fearandgreedtrader.blogspot.com/ as the primary resource for learning how to trade high-ADR, momentum stocks. Without that site and his work, this journey of mine would have no road map. It is a resource and a benchmark without peer, in my opinion.
After taking a closer look at Thursdays trading, I noticed that in some of the areas where Scott Farnham was playing a turn in TIVO, I was also sensing a change of direction and fading the monster move up. For that reason, I think I am beginning to feel the market. This "feeling" now must be followed by appropriate action. If my read of the direction change is not correct, I must sell it and learn to go the other way, as Scott did. I remember reading one of Scott's posts from 2008 (?) where he wrote in reference to the behavior of other traders (paraphrased), "... why they don't sell and go the other way, I'll never understand." There is clarity and simplicity in that. It says that the action of selling and reversing the trade is really as simple as clicking the mouse, assuming one has the right mindset. That is where I want to be someday. For this and many other reasons, I continue to follow and recommend others to http://fearandgreedtrader.blogspot.com/ as the primary resource for learning how to trade high-ADR, momentum stocks. Without that site and his work, this journey of mine would have no road map. It is a resource and a benchmark without peer, in my opinion.
