I shorted a key area on a breakdown. I was looking for a 4:1 trade, but I was stopped out due to a squeeze. I was looking to get out at 23.20 on this trade. This is my favorite setup. Under VWAP consolidation and then breakdown.
NRG held exactly the 22.50 area from 9:50-10:05 and then it headed higher. I was targeting that area for a short. I saw it hold 22.50, but it failed to break out of the 22.70 area. When the stock came back down to 22.50, I decided to short. I was squeezed out the position, and it I did not mind that. I could have avoided it, but I did not mind it. I respected my stop. What really upset me was when NRG came back down to 22.50, I should have shorted it again. There is nothing wrong with getting into a again.
When you see a squeeze, you should get out of the way. Again, nothing wrong with getting in a trade. As long as you have a 4-5:1 r/r trades will work out in your favor.
Execution detail:
Date/time | Symbol | Side | Price | Position |
---|---|---|---|---|
2017-07-13 13:17:00 | NRG | sell | $22.500 | short |
2017-07-13 13:42:00 | NRG | buy | $22.630 | 0 |
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