Shared by
James_BOWSsim
Second day earnings gapper here. Dipped at the open then held at previous day's close. Went in Long as it reversed and went red to green. Scaled out half and then the other half as the market was tanking. Only had 200 shares of this thing unfortunately. For really small stocks like this you typically need to use more shares to make your risk worth it, because their range is small.
I'm still prone to using ridiculously small positions to hedge risk. Sometimes its because my limits can't get filled fast enough at the price I would like. But other times its because I think its a risky setup. Also I'm not used to trading small stocks in this market so I have that small position mentality. The reason why is I don't want to trap myself into shorting a stock that's under $5, too risky for my tastes.
Execution detail:
| Date/time | Symbol | Side | Price | Position |
|---|---|---|---|---|
| 2016-02-05 09:42:23 | GLUU | buy | $2.695 | long |
| 2016-02-05 09:45:01 | GLUU | buy | $2.710 | long |
| 2016-02-05 09:47:08 | GLUU | sell | $2.774 | long |
| 2016-02-05 09:51:04 | GLUU | sell | $2.760 | long |
| 2016-02-05 09:52:34 | GLUU | sell | $2.760 | 0 |
Comments
LPeriman_BOWS
Remember, to have a red to green, the stock had to have opened red (lower than previous days closing price). This trade is more of a quick pullback. Your trade was good. I'm pointing this out just as another way to look at it. See the better entry you could have on a quick pullback that bounced off previous days HOD support http://screencast.com/t/8MzzHT1HoT
James_BOWSsim
Aw man! I'm frothing at the mouth at that entry right at previous day support! Wish I caught that quicker. I always zoom in too much to that day because the premarket data gets confusing. Need to start looking closer at support and resistance. Quality of analysis over quantity until I get better at it.
acelaw2000_BOWS
periman i believe you can red to green immediately after a flag forms above the previous days close. meaning on this trade, the entry that he actually entered in at would have had to have been a bull flag after stock had broke past previous day close
Hmm ... I'm pretty sure red/green is after a stock (that is a daily chart candidate) opens red and goes green. Best scenario is that it consolidates, or flags, just before going green for the first time on the day. But, I'll check my facts and let you guys do the same if you wish. I just wanted to help Jimmy categorize his trades better for future statistics.
This actually raises another question haha. How reliable is it to look at premarket moves right before a stock opens? I think Kunal doesn't typically look at premarket, but I've never asked anyone else. I have it up to see where a stock will open. I try to only play what happens after the first three candles.
I think Kunal, and most traders, do look at pre-market. Particularly if there is high relative volume during PM hours. However, at the very second market opens the PM data goes away because it messes with the moving averages that his (Kunal's) system uses. Of course, there really isn't a "right" way to attack this. It' more about YOUR way and being consistent so that you can always adjust with the same baseline. I just prefer to use Kunal's system precisely because there are HOURS UPON HOURS of video's, examples, and market recaps based on it. ;)
So I too only play on the 3rd candle unless I'm playing a r/g (g/r), or flag break from previous eod.
Oh.. and if I see PM flag with SIGNIFICANTLY high relative volume ... I will use that as part of my pattern at open.
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