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

I started out today like yesterday, trading well and making my little bits of money. Then I did something dumb and it all went to hell after that. First my good trades:

AMZN Short. After the big upper tail, I thought it would fall back to the 5-ema, and it worked out as I expected:

Here’s a Heikin-Ashi Tick Chart. I thought it did a good job of showing trends and I watched a 100-tick chart alongside my 15 min today to help me see trend changes. I’ll keep watching them in the future:

MA Long. This set up as a good Trader-X “beyond the fib extension” trade, though I got stopped out at breakeven and scratched the trade:

Then, I got the bright idea to go long RIMM and hold into the Fed. WTF was I thinking? I thought I could get out quick if I was wrong. Think again:

A quick -4R. So much for my good trading these last few days!

I scalped AAPL long after that and made about a third of that loss back. We bounced, printed a green candle, and I went long when the tape started to surge at 191.50:

Then I took a shot on scalping GS Long, small position, but top-ticked it and lost -1R:

Then I went crazy! I went long VMW for a swing overnight at 96.01, got scared and sold it at 95.60 when SPY broke support. Then I went absolutely out of my skull and bought FXP at 73.85 and I’m holding it overnight.

All in all, I was down about -2.5R on the day. It was so easy to trade AAPL after the Fed, when people were dumping shares! I think it was Teresa Lo who said it’s less risky to trade in crazy circumstances like this than in calm markets, and I think that’s true. I just had to walk in and pick up the money. People getting out at all costs (like I did in RIMM) created an opportunity. There is a huge edge there–it’s like waiting until all the cards are out on the table before deciding whether or not to bet! This is the best way to play the Fed, and the only way I will play it from now on. It makes no sense to gamble on the news like I did. When you have no idea how the coin toss will come out, you might as well just flip the coin and give the money to someone else if it falls against you. There is no edge there, and it shouldn’t be traded. This is a new rule for me now. I will always be flat going into Fed announcements or other big news events.

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

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

I traded 11 positions today–4 wins for +4.9R, 7 losses for -5.1R, net -0.2R. I’m really shooting myself in the foot with some of the plays I take! Once again, I held losers too long, though I executed the winners well. AAPL spanked me three times! I’ll stop trading a stock if it gives me two losses in a day. If I get two losers, I’m not reading the stock right, and any more trades on it will be out of revenge to “get my money back”. So, with any one stock, it’s two strikes and I’m out of it for the day. That would have saved me 1.1R today.

Here’s a chart of my PnL so far as a Prop Trader (the area highlighted is today’s trading alone):

So basically, I’m flat. I have a few good trades, and lots of little bad ones. I need to keep away from “scalping” until I get it right. I had the idea to only scalp from a PnF chart, and my exit signal is if the column switches over. My natural sense of timing burned me a few times today, both on entries and exits.

Anyway, here’s the two good ones from today:

AMZN

SNDK

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

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

I traded a setup in Amazon.com, Inc. (NASDAQ: AMZN) today, and I already posted about my mistakes. I wanted to post an example of the type of setup that I should have taken. It’s similar to the AMZN setup I traded, but there are subtle differences.

Skyb0x on Wallstreak caught 6+ points in MasterCard Incorporated (NYSE: MA) today, so I looked at the setup that was present this morning. This is what I saw:

There was a big move upward, and price retraced less than 38% of the distance from the morning high to the open. It consolidated with support from the 5-EMA on lower volume. From there, it broke out again on high volume, reaching the 38% extension and beyond(!). No way would I still be holding now, but what a run! And it’s a perfect example of the setup I was looking for.

Here’s my flawed AMZN setup for comparison:

Similar, but see the difference? There was a big move upward, and price retraced more than 38% of the distance from the morning high to the open. It broke support from the 5-EMA on lower (but still above average) volume. It was a deep retrace, and the 5-EMA being broken indicated that trend was unclear, rather than a consolidation for further uptrend. I shouldn’t have taken this setup in the first place.

I never really formally thought these things through ’till now, so I’m writing them down here. I’ll look for the elements in MA (38% or less retrace, 5-EMA support) in my setups in the future. Thanks to Skyb0x and the Wallstreakers for bringing MA to my attention!

All right, somebody else can have MtM now for a while.;)

Stocks Mentioned In This Article
Stock	Links
AMZN	| |
MA	| |

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

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

I am responsible for all of my trading results. Period. I lost a quick 1R in Amazon.com, Inc. (NASDAQ: AMZN) this morning.

Here’s the chart (orange line is entry, red line is stop):

I shouldn’t have traded the 5 min timeframe on this one. There were a lot of upper tails, and a few wider range bars. It was choppy, and I ignored the choppiness.

Note the setup on the 15 min:

Volume was still contracting on the higher timeframe, and the contraction is much more orderly there, but even now on the 15′ the setup still doesn’t look good.

I went long on a volume uptick and break of a narrow range candle on the 5 minute. I placed my stop at the 50% fib retrace, and price reversed and stopped me out. I was trying to pick the bottom, which is not the setup I was supposed to focus on today.

One more thing I missed: I have been putting a trend indicator on my charts lately just to try it out. It’s a paintbar band that consists of a 5 period Hull moving average and a 5 period EMA crossover. If the Hull is above the EMA, then it’s green and if it’s below the EMA it’s red. You can see that I was going long in a downtrend on this trade today. I’ll keep an eye on that more in the future.

I earned the results I got today.

Trade Summary:

AMZN Long
Entry: $72.74, Stop: $72.38, Target: $74.45
Exit: $72.38, P/L: -1.00R

Trade Grade:

Stocks Mentioned In This Article
Stock	Links
AMZN	| |

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

Here’s yet another one that got away. I really have no excuse, since my hand was on the “Buy” button… I just wimped out. I saw a kind of double-bottom form at 60.50ish, and the trade rate picked up really well at 61.00. I should have bought, there’s really no two ways about it.

The chart:

Geez, I’m still shaking my head… why didn’t I just go ahead and press the button? Oh well…

A conservative target would be the size of the consolidation area (think of it as a box play)… so 61.40. A more aggressive target would be the top of yesterdays move at 61.60. The conservative target was hit when I took this screenshot. The more aggressive one was almost hit, but no cigar (61.59). I would have definitely sold before then!

I’m still very impressed by how easy one can spot trades on these PnF charts. I’m a little disappointed in how scared I am to pull the trigger. Maybe next week! I’m taking the rest of the day off, because I was really annoyed by the weird lack of quotes at the open. Lots of people noticed this problem, so I know it wasn’t just my setup here.