Shared by
KevinL_BOWS
Classic example of fighting the chart... Typically I trade these gap downs into no-man's land pretty well, but my original entry was a bit of a chase. The flush only happened briefly, then the stock started to make a series of higher lows/higher highs, this should have been a warning sign to get out while I still could... Instead I got out for max pain, then tried to short it AGAIN! Really ugly stuff.
Execution detail:
| Date/time | Symbol | Side | Price | Position |
|---|---|---|---|---|
| 2015-12-10 09:31:08 | MW | sell | $13.950 | short |
| 2015-12-10 09:45:36 | MW | buy | $13.770 | short |
| 2015-12-10 10:04:15 | MW | sell | $14.035 | short |
| 2015-12-10 11:16:46 | MW | buy | $14.390 | 0 |
| 2015-12-10 11:18:17 | MW | sell | $14.500 | short |
| 2015-12-10 11:18:35 | MW | sell | $14.500 | short |
| 2015-12-10 11:25:51 | MW | buy | $14.630 | 0 |
Comments
KevinL_BOWS
Yea Wesley... Typically on these types of Gap downs into uncharted territory (on the daily chart) I look to short pops. But you are correct, it did start making higher lows, so a break to the upside was definitely a strong possibility. That said, I had too much bias on this trade to the short side, bc I remember the last time this particular stock gapped down, every pop was shortable. Also need to follow what the price action says, not what you "want" to happen.
WesleyR_BOWS
I see what you are saying about the gap down into no support/unchartered territory. But yes, unfortunately the stock doesn't always do what we "want" haha I think the important thing to take away was the price action was telling higher lows on consolidation before the break. We'll keep learning though!
MattB_BOWS
yea, Kevin. I know of the situation you were in here with MW. I had the same deal with BLUE on Monday. I came in with a mindset that the gap down was gonna get bought up right away because everybody loves the name, or whatever, but the big buying never really materialized and I didn't play the price action. Kunal made a point of reminding me of the language we use when we recall our trades; "wanted", "hoping", "expected", "stubborn", ect, when we're not reacting to the price action or playing a setup, but getting caught up in expectations and stuff like that. thanks for sharing.
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Hey Kevin, I am new to the Bulls and have been apart of BCV23, so I am no expert on all of this just yet. However, with that said, from what I see in the intraday chart, it appears as though the stock is making higher lows, and forming a tighter consolidation pattern between just a little after 9:30am through 11:10-ish am. I would have been looking for a break of new highs out of the consolidation for a long with this trade. Let me know what you think?