I am posting 3 charts in all of CNET today to show how this trade should have been taken. I am admitting I did not take this trade as I was definitely not on my A game today (it happens) when it came to watching the market for these layups. I post this for those who want a look in to my thought process when it comes to finding some nice layups. I am sure judging from the volume today that many of you were in this stock. Either way I post this here for ET to see as well as to scold myself for missing crap like this. Enjoy!
CNET woulda coulda shoulda
- Thread starter ChartingMarkets
- Start date
Here is Chart # 2
Here is the 3rd and final chart. Have a good weekend.
Quote from iceman1:
I am trying to understand why you're kicking yourself for missing a point or so; heck in this market you can find that and much more every day. Guess I missed the point.
Look at MERQ yesterday, for example; and many many more each day/week.
My advice is : NEXT!
Have a good one.
iCe
I believe that I am kicking myself because this was the kind of trade where you could have put on a 5-10k share position because of the volume and easy stop and taken a buck out of it. To get a buck out of TASR which happens every single minute are you ready to put on 10k shares? I know I'm not.
when to chase or when not to chase. that is the hard question we face every day.
Without a doubt Iceman. The other reason to post these charts are for some of the newer members who have questions about different types of scenarios that traders here wait for. Basically in a nut shell, this really is a nice slice through reistance on a big volume breakout that when scrutinzed closely provided a very logical/high probability entry with a great r/r ratio. There will no doubt be many others in the future, either up or down. Peace Iceman.
That is indeed the question. However on this one if you were to see this scenario setup 10 times a month and took all 10 you would be kicking butt each month. Think about it. On this trade you could have lets say using the 15 min chart bought in at 9.65 when it cleared the high of the first hour which is the stock saying, "I am going to hold that breakout on the daily and I have the volume to prove it." Then you could have placed the stop loss at 9.15 the bottom of the highlighted area of consolidation in the first hour. Now your risking 50 cents. You go for a dollar and you get 2:1. Lets say this type of setup works out 5 times out of 10 trys per month. If you play lets say for arguments sake 1k shares linear on each set up. Then you would make 5 grand on 5 winners and lose 2.5 grand on your 5 losers. Netting 2,500 bucks commissions being negligible for this example. Now multiply that 1k share unit by whatever size you trade and you can see the bigger picture here.
Now this may be only 1 type of bread and butter trade setup you look for in your trading plan each month and its a nice cash cow. Lets face it you can throw 10 darts at the Wall Street Journal stock page and come up with 10 stocks that have a 50% chance of going up or down. Here you truly have better than a 50% chance as you have the all the things that matter in trading. A breaking of an action spot aka support or resistance and volume=urgency. So many traders forget these simple principals when trading because it seems too simple. Yet is so damn effective. Good Luck all.