QCOM...the next to fall
- Thread starter trade4me
- Start date
EMA is Exponential Moving average. Its the same concept as simple moving average except that it put more weight to the more recent data to compute the moving average. Its all a matter of preference but I like to use EMA instead of SMA. I like to use the 20 day ema and see how stock trend relative to it. IBM for instance has been hindered by it. Hope that clears it up.
Hi Trade4me,
nice trade, you certainly called this move well, and got a great entry, however I was wondering if we might use this thread to get a bit of discussion going on trade management With this in mind could you answer the following questions.
1. Your initial stop was 32, have you since lowered your stop?
2. If you have what methodology are you using for lowering your stop?
3. You mentioned that you might add to your position, what is your strategy for adding to, or scaling out of positions?
4. You mentioned a target in the teens, do you have a time frame in mind for achieving this target?
5. It's unlikely although not impossible that it will drop to that level without some sort of relief rally, how far are you prepared to let it move against you before you close the trade?
The reason I am asking these questions if because many people particularly new traders (I am not trying to imply that you are a new trader by the way) tend to concentrate solely on entry set ups and tend to ignore what to me is more important and that is basic trade management some of which is covered by the above questions. Maybe we can get some other traders too, to make comments on how they would handle this trade.
In my own case I would probably have covered the short some time on the 25th hopefully close to the daily low
this is because my stop would have been a lot tighter than yours and a $3 plus drop would have given me a very high R multiple trade.
nice trade, you certainly called this move well, and got a great entry, however I was wondering if we might use this thread to get a bit of discussion going on trade management With this in mind could you answer the following questions.
1. Your initial stop was 32, have you since lowered your stop?
2. If you have what methodology are you using for lowering your stop?
3. You mentioned that you might add to your position, what is your strategy for adding to, or scaling out of positions?
4. You mentioned a target in the teens, do you have a time frame in mind for achieving this target?
5. It's unlikely although not impossible that it will drop to that level without some sort of relief rally, how far are you prepared to let it move against you before you close the trade?
The reason I am asking these questions if because many people particularly new traders (I am not trying to imply that you are a new trader by the way) tend to concentrate solely on entry set ups and tend to ignore what to me is more important and that is basic trade management some of which is covered by the above questions. Maybe we can get some other traders too, to make comments on how they would handle this trade.
In my own case I would probably have covered the short some time on the 25th hopefully close to the daily low
this is because my stop would have been a lot tighter than yours and a $3 plus drop would have given me a very high R multiple trade.
http://stockcharts.com/education/What/IndicatorAnalysis/index.html
Look around this site. A lot of in fo here.
Look around this site. A lot of in fo here.
A nice quiet break below 24 ought to do the trick for you and bring it to the high teens, if it bounces/consolidates sideways next week I might be inclined to join you in playing that break at least Can't believe this company still at 20BIL market cap with 740mil float. Any squeeze would require the nasdaq to bounce like school lunch meatballs, so as long as we don't get that late summer rally (setting us up for october dump?), it's likely your stops won't get touched.
Re: GCI -- a fundamental call? In any case that setup has nice R/R as well.
Can't believe this company still at 20BIL market cap with 740mil float. Any squeeze would require the nasdaq to bounce like school lunch meatballs, so as long as we don't get that late summer rally (setting us up for october dump?), it's likely your stops won't get touched. Re: GCI -- a fundamental call? In any case that setup has nice R/R as well.
Nice weekly bearflag to help you out! I agree, 24.50 goes and you will be wearin one of them ear to ear grins.
Nice trade and nice r/r.
-Flyin it High
Nice trade and nice r/r.
-Flyin it High
That was a great post and I think you hit the nail right on head. A good trade also depends on your management strategy. My stop was initially 3 points above my entry price. I chose this price as I felt that the stock should have good resistance in the 31 area. Its also a wide stock because I have a longer time frame for this trade, therefore going for a bigger point move. I don't know how long it will take to get there, however, I feel that as long as the trend holds, the stock should get there. I usually move my stop down when the stock moves in my favor the same amount of points as my stop. For instance, the stock moved down 3 points, so I moved my stop down to my entry price. (32-29 = 3 points.) This way, I don't let my winners turn into losers. Then, I move the stop down point for point on a closing basis. For instance, if the stock closes at 24.5, my stop will then be 27.5. On my exit, I either get stopped out or if I feel the stock has formed a reversal, most commonly when the stock makes a big gap down in an oversold position (on a short position), or if the market is totally not in my favor. I try not to buck the overall trend of the market. I would love to hear other stop loss and exit strategies. I am a firm believer that its not when you buy, its when you exit. Thanks for your post.
I forgot to add my reasons for adding positions in QCOM. I felt the stock made a strong reversal candlestick pattern, KICKING. With that in mind I felt that any gap up, as it did on Friday, would be sold into. I did not add however, as I was tied up in the am. My strategy for adding positions are treated as a new position all together. As far as scaling in and out, I usually do it intraday with multiple trades. If shorting and I see a big gap down in an oversold position, I usually dump half of my position, and cover the rest during the day if I feel that it will not close below its opening price.
GCI for me is a longerterm swing play as well. I love the look of the chart for the short. I felt that it broke its long term trend and has been in a countertrend rally since (phase 3) . It started tanking a few weeks ago with the entire market and has recovered in the last 3 days. I think this retest will fail in this area which is coincidentally near its 200 ma. My stop is new highs will my minimum target is in the 40's. My stop is wide and my target is large, which is why my timeframe is a bit longer. Fundamentally, I feel the short plays nicely into my overall view that the economy will turn significantly in the future.
GCI for me is a longerterm swing play as well. I love the look of the chart for the short. I felt that it broke its long term trend and has been in a countertrend rally since (phase 3) . It started tanking a few weeks ago with the entire market and has recovered in the last 3 days. I think this retest will fail in this area which is coincidentally near its 200 ma. My stop is new highs will my minimum target is in the 40's. My stop is wide and my target is large, which is why my timeframe is a bit longer. Fundamentally, I feel the short plays nicely into my overall view that the economy will turn significantly in the future.