MCD Trade on Oct 22, 2015 09:38 from Holden: Tradervue User Stock Trades.

A+ Play Today:
Morning- Consolidation below ONL/Key S w Confirmation and change of character - In Play - MCD
This is a play I have seen a couple of times following earnings or positive news catalysts it is a reversal play looking for a possible gap fill. I had set up for a potential long play in this name given the gap out of range to new highs but this is what developed. So it is what was executed. This cements the need to plan for both a long and short and have the skills required to be flexible and execute where there is edge that develops.
Research and information collection (what I was seeing and where I sourced the idea):
Strong earnings announced leading to nae popping to ATH on large gap up of about 8% -
Name has been in long consolidation over the past 5 years never trading above 105 in that time so gap up out of range
Creativity and the generation of trading idea (my thought process for what could develop):
Was thinking two different scenarios could develop here and was planning for either:
Blow off top type momentum drive higher may occur off the open following the strong earnings and gap to new highs
Would look for a strong move above pre market R level, brief consolidation above and momentum drive up to 115
Strong drive up leading to the number could lead to sell the news and a short play to try and fill the gap
Price action would make a clear high in pre-market fail to take that out on open, trade below S and be unable to get back up into upper consolidation where I could look for a short.
Entry execution and position management (Why did I take the play, why did I size as I did and what was my plan?):
Leaning towards a long but the failure to take our R early and hard failure below upper S allowed me to look for a rally back up to resistance as a possible short entry with stop just above that level which was my entry.
When action consolidated lower and failed a second time, I was able to get bigger looking for a dump out lower.
Stayed at 2 tiers through most of the move as the action broke hard lower and consolidated BELOW prior S at 109.20
Risk management and exit execution (My plan for the play and my reasons2sell):
Risk management- How do I control my risk in this situation effectively. - RECOGNIZE action breaking out and MORE was there.
Managed risk by entering short on moves up into potential failure areas. Stops just above there then moved stops down
Exit Execution - Plan for this set up is take ½ at DTA and trail final piece up. I didnt do that.
Set exit at dta and took most off there (was ½ the gap fill) Trailed ⅕ of final position and cut when broke back higher.
Self Management (Specifically self talk and did I support myself in a way that allowed me to execute to plan):
This was my focus in the morning and I had written out my rules for this play and kept referencing those and reminding myself to simply follow the play. --- NOTE : check out what BA did today on day 2 after earnings- potential similar move here?