This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com
Strathmore Minerals Corp. (STM.v) is a junior Uranium company that trades on the Canadian TSX Venture Exchange.
1. Why did I take this trade?
There was lots of buy volume pouring in on Friday morning for Strathmore Minerals (STM.v). I bought STM when it broke above the previous day’s resistance @3.75. As noted in the chart, this was not a lower risk entry. Obviously I did not review the daily chart before I took this trade, as I was too focused on the intraday chart.
2. What was the initial stop?
The initial stop was at 3.65. Because it was not well-behaved yesterday (ie. big pullback, did not recover strongly), I moved my stop loss level up to 3.99 after the close.
3. Why did you exit where you did?
Everyone was stampeding for the exits this morning, and I was compelled to do the same.
4. Is there anything you would do differently?
Yes, I will have to review the daily chart more, prior to entering a swing trade.
The execution of my exit was done well (I did not even wait for the price to hit my stop loss before selling); however, the intraday chart indicates that I did not execute my entry very well. I did not need to wait for confirmation of the break above 3.75 before entering. In fact, I should have entered on Monday, when STM broke above 3.40, which kind of implies that 3.78 was a higher risk entry.
This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com
January 30th, 2007 at 7:21 pm
Is there a certain way you’re using the RSI and MACD?
January 30th, 2007 at 8:33 pm
Hi Richard,
Yes. RSI as an oversold/overbought indicator has never helped me. However, a persistently oversold RSI (ie. it persistently hovers around +70 for weeks and weeks) is something I go out of my way to look for, because stocks that run-up for a month or more always have persistenly overbought RSI.
As for MACD, the only thing I care about is whether it the slow crossed the fast, and the gap between the two. I find that looking at the gap between the fast and the slow, in the context of what it did in the past, is a better indicator of whether it’s overbought or oversold.
Of course, I didn’t hold STM long enough for these indicators to come into the decision making process.