Shared by
JamesDover_BOWS
Seriously smacking myself in the face for this one. Shorted it because I thought it would fade and go Green to Red. I should have seen the long tail on the previous candle and observed that there is a big buyer in this. That would have been a perfect spot to take a quick pullback! It wasn't super clean at the time though... Plus this stock was up 6 days straight!
The main problem is I played this one from a swing trader perspective, and not based on what I was actually seeing intraday.
Execution detail:
| Date/time | Symbol | Side | Price | Position |
|---|---|---|---|---|
| 2016-04-05 09:56:30 | ACAD | sell | $30.015 | short |
| 2016-04-05 09:57:34 | ACAD | buy | $30.230 | 0 |
Comments
LPeriman_BOWS
Green to red is a trigger, not a setup. So, I agree with ShawnSplint's description of down day followed by small gap up day with weakness. However, it can also be the case that it is a good trigger on a stock that is extended. MA's aren't the most critical point. Price is king. And, you had some daily resistance to short against http://screencast.com/t/gKP8N9UR0l4s
It just didn't work. I don't really play these kinds of plays because they feel like a gamble that THIS will be the top. Why not just wait till it breaks down (could be weeks from now) and then pullsback to a lower high... or some other valid short setup?
I don't think your trade was "bad". But, since it was a gamble type trade, it sohuld have had very small position size.
Good job of getting out quick.
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Why would you think green to red? I would say the opposite looking at the daily. It had a number of green days giving it momentum. I would be thinking long until it got near its 20 sma around 33.50. A green to red would be a stock that had a down day and the next day you would want that momentum to continue down. So if it doesnt gap down or only gaps up slighty wait for it to turn red and then short it.