Slowing Down: One Trade Today

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

After grinding large numbers of R’s away by scalping, I decided to take a fresh look at things. I committed myself back to the 15′ timeframe, with the philosophy that if I can’t make money there, where things are slower and more steady, then I can’t make it scalping which is immensely harder. I’m strongest in the dummy method, incorporating some of Trader-X and Jamie’s methods as well, so that’s the system I’m trading. I got off of that when the markets were not disposed kindly to these setups back in September. Rather than changing my style back then, I should have just stopped trading until conditions were right for my style.

I also changed my mindset about my financial position. Rather than thinking that I’m way “in the hole” and need a big home run to get me back, I decided to start fresh, using my current balance as my new equity position. Now I can concentrate on trading well and avoiding risk, and let the trades come to me. 90% of trading is half mental.

It worked today! Skyb0x on Wallstreak suggested that I watch the Solars today, as they were gapping up. It was a perfect call. I watched several names, looking for a dummy setup either on a pullback or near an OR extreme. I decided to go long LDK after a retrace to the 5-ema on declining volume, when we were printing a green candle, were above the 38% fib retrace and were back above the OR low again :

It was a risky entry in the sense that I front-ran the candle being completed, but I thought the risk was worth the reward, as the 138% fib extension was near $62, and the volume was projected to finish the candle on an uptick. Here’s the outcome of the trade:

We slowly ground up for a while, and when I was up 1R, I raised the stop to breakeven. Once we hit the OR high, I was tempted to sell, but I held on because the retraces were orderly and we didn’t close a candle below the 5-ema. The inverted hammer at 14:00 made me think the end was near, but we kept going. I was watching this daily chart for potential pivot points as Jamie has often preached:

Once we cleared the OR high, I saw that $57.57 was a strong pivot. I sold half at limit at $57.50, and ended up almost top-ticking the sell. Nice! LDK then rallied more, and I decided that $60 was probably going to be a round number resistance and that $62 was not likely today. Once we got there, the action was so strong that I decided to hang on. Whoops! You can see that we had three wide range bars up to the $60 level, and it would have been smart to sell there. Still, I raised my stop to the base of that last WRB, and ended up getting stopped out just under $58 for a total of +2.77R on the trade.

Since I’ve decided that I should take fewer trades and really focus on them more, I wrote the above post and I’m reinstating my trade grade:

Trade Summary:

LDK Long
Entry: $52.50, Stop: $51.31, Target: $62.28
Partial: $57.50, Exit: $57.85, P/L: 2.77R

Trade Grade:

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