Shared by
kylejensen34_BOWS
Play: Large volume bar came in as stock pushed over previous resistance level
Didn't get enough zeros and only bought 50 shares rather than 500 when retraced to 57.70. Because of the low size, I didn't watch as closely as I should have and set my stop at 3-candle top at 5.20
Sold when stalled slightly above previous resistance because wanted to close the small position even though stock didn't violate stop loss or break trend...should have held towards close.
Execution detail:
| Date/time | Symbol | Side | Price | Position |
|---|---|---|---|---|
| 2013-09-17 13:02:08 | NUGT | buy | $56.700 | long |
| 2013-09-17 13:46:52 | NUGT | sell | $56.780 | 0 |
Comments
kylejensen34_BOWS
John, it appears that I not only typoed my buy order for this stock, but also typoed my note on it. I try to always take at least 2-1 trades so thank you for reinforcing good rules as it definitely helps when I'm starting out. As for the typo my buy was actually at 56.70 (see chart, not 57.70 as noted) and my stop was the 3-candle top at 56.20. Didn't say it in the note but my target was 57.60~57.70 which I saw as the next area of resistance from the previous day so right around the 2-to-1 ratio.
Should have let it ride because it didn't violate my stop and ended up hitting target at the end of the day. I just wanted to close position and watch my other trades because of the accidental small position.
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I think you could've picked a better entry point. You're right that the resistance had been cleared but look how far your support was. Remember-- traders are risk managers. It's better to win $10 by risking $5 than it is to win $100 and risking $100.
You should try to aim for at reward-to-risk ratio of at least 2-to-1 (this is in the coursebook). Based on the stop you described, the stop would've had to go up $1.00 in order for the trade to be worth it for you.