Shared by
James_BOWSsim
Stock gapped down and I shorted the first pop around the previous day's resistance. Only had 100 shares and scaled out quickly (had somewhere to be at 10:50). Got this one literally at the apex of the day. Would have sold it way too soon even if I didn't have to be somewhere. Any tips for biding your time and riding out a winner? I get too excited and just take what I can, often regardless of a trade's risk-to-reward.
Execution detail:
| Date/time | Symbol | Side | Price | Position |
|---|---|---|---|---|
| 2016-02-11 09:58:25 | NFLX | sell | $87.150 | short |
| 2016-02-11 10:00:12 | NFLX | buy | $86.600 | short |
| 2016-02-11 10:02:30 | NFLX | buy | $86.130 | short |
| 2016-02-11 10:08:21 | NFLX | buy | $86.280 | 0 |
Comments
LPeriman_BOWS
Yes sir. Just be sure you have a reasons to exit list of rules that covers different market conditions, A+ setup, and anything else that is valid to you, and then... STICK TO THEM. Later, in your analysis of your trades, you will be able to make adjustments to your rules as needed. I know I sound like a broken record on this, but tagging your trades with your reason2exit comes in handy later so you can filter on them.
Just as an example in this particular trade, using my reasons to exit (yours will probably vary some), NFLX in a bear flag on the daily and the SPY on this day was moving strongly downward. Which means the "wind is at your back" for a short. So that means I will take 1/2 off the table when either near-term support (low of day in this case) with diminishing volume, the price gets very extended from the moving average (about the same time as lod, in this case), or when the price reaches my stop (not even close in this case. My next reason to exit, 1/4 of my shares, was after the flat bottom break down and price got too extended from MA's. My last 1/4, since the wind was at my back, I'd have held with an expectation to add to those shares on the VWAP pullback, or exited when price held above the VWAP. And so on....
Again, not saying these are the right rules for you, but just have hard and fast ones that you follow. If not, you're trying to hit a moving target.
gregr
One more suggestion - every time you scale out some, make a note here in your journal as to exactly why. Even if it's just "getting nervous, going to cover half" or similar. Then when the trade is complete, you can reflect on exactly how you were feeling, and why you made the decisions you made. It also gives you some accountability to yourself - if you know covering is a bad idea, but you're planning to do it anyway, knowing you're going to write it down and have to face it later can be helpful.
You can use the techniques here to make notes here in your journal throughout the day, even if you don't import your trades until the end of the day.
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For winners, I will get out no sooner than my predetermined target getting hit. Then it just depends on the next res levels and or extended pops. At least that my current strategy.