Swing Trade: CAL

This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com

I took a swing trade in Continental Airlines, Inc. (NYSE: CAL). Yes, It’s NYSE–This one turned out okay. It’s actually a really good example of using Rule #2 correctly!

I saw CAL make a strong bearish reversal on the daily chart:

I took a 1.3% portfolio risk position size in my initial trade. As it broke down further, I added another 0.7% risk position size, to make up my maximum risk of 2% if my stop was hit. When you trade this way, if the position immediately reverses, you’ll take a loss on a smaller position size than if you put the whole thing on in the beginning (in my case, the whole 2%). I got shaken out this morning since I was aggressively protecting my profit. I could have made my original target if I had held:

I’m not sure exactly how to report my profit/loss on these added trades yet, so here’s the results for both:

Trade Summary:

Initial: CAL Short 20 Shares
Entry: $41.69, Stop: $43.02, Target: $38.00
R: $26.60, Exit: $39.44
P/L: 1.69R, or $45.00

Add: CAL Short 10 Shares
Entry: $41.07, Stop: $43.02, Target: $38.00
R: $19.50, Exit: $39.44
P/L: 0.84R, or $16.30

Overall: P/L: $61.30

Trade Grade:

Stocks Mentioned In This Article
Stock	Links
CAL	| |

This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com