EYEG Trade on Nov 22, 2019 09:30 from Chigozie: Tradervue User Stock Trades.

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Chigozie

 

Why did I want to take the trade?

Low float gapper that held VWAP premarket.

What did I see?

Price was holding above 20 EMA on 5m. 20 EMA was close to half dollar support, so risked $8.50 area and entered at 9.03.

What was the downside potential?

Break of $9.00 fails and price slams back down through $8.50.

What was the upside potential?

Price holds VWAP and continues to trend higher to $10.

How did I manage the trade?

Missed entry at $9.03 so left the order in, holding for a retest. Price dipped down as low at $8.52 and there were several times I considered just bailing out at break-even or small loss, but stuck to my hard stop of $8.47 and held. I sold everything on the pop to $9.17, which was the premarket pivot. I didn't sell half because there was initial weakness and followup resistance at premarket pivot.

What was I feeling at the time?

Confident because I risked small at the open and after seeing weakness, I decided to sell the pop and walk away for the day. There was a followup SMA bounce that I wasn't prepared for, mainly as the SMA was at $7.86 and the support was $8.00.

What did I do wrong?

Not immediately getting my next order ready for the SMA bounce.

What did I do right?

Calculated my risk, entry, and target. Took the trade and didn't bail out before my stop.

How can I improve in the future?

Always be mindful for how close the 180 SMA is to a whole or half dollar resistance level. That should be the level played off, not the SMA itself. Also, study how the supporting bids are eaten up. Placing a bid at the whole dollar at the SMA is a great idea.

Averaging down in these setups is what I really should be working on. If I am taking small risk at the break of nine, anticipating a possible drop to $8.50 and bounce off there, I should plan on adding to my position at 8.50. I could, for example, buy 100 shares risking 10 cents. So if I'm wrong I'm out a total of $20 (initial risk was $10) which is well in my risk tolerance. This also allows me to reap profits on the recovery.

Another thing I could have done was not sell the pop, and average down on the dip to the 180 SMA. I have done this in the past.

Averaging down is good if there's a sound strategy behind it. So far these dances around the VWAP, 180 SMA, and whole/half dollar support levels are perfect candidates for averaging down while maintaining my risk.


Execution detail:

Date/time Symbol Side Price Position
2019-11-22 09:30:33 EYEG buy $9.030 long
2019-11-22 09:32:28 EYEG sell $9.170 0


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