Time Off!
By Cliff Clark
We all need time off, whether it be a day or two or maybe a longer vacation. Time off helps us get rested and relaxed able to come back with renewed vigor. When I worked for a large company I was always much more productive for a few weeks when I took a week of vacation and had time to relax. The company gave me 4 weeks vacation every year so it wasn't hard to take that time away, after all I was free to go anyplace I wanted and to get paid for it at the same time.
Unfortunately as traders we don't have the luxury of being paid for our time off. This causes many of us to keep plugging away even though we could definitely use some time off. How do we know when we actually need time off?
My answer to this is “you already know when you need time off”! How so? Well if you get up in the morning and you have to force yourself to sit at your desk and turn on the computer, you probably need time off. If you are surfing the internet 15 minutes into the trading day looking at exotic places websites, you probably need a time off. If you just had your worst day ever losing 9R and failing to take a stop loss you probably need time off.
My point in the article is that we all need time off. You should be able to determine for yourself when that is for you. Remember when we are not on top of our game we are probably going to continue to grind lower until we do get some time away. While we may not get paid to take time off like our corporate friends, continuing to trade when we aren't on top of our game can be costly. When we take time off we will come back with a fresh mind and body ready to exploit the markets at a much higher level than when we are run down.
2 trades for me today with +1.5R total
1st Trade QCOM +2R
148.39/149.97 exit 143.25
12% gap down under pivot support and 50ma after a strong daily double top rejection,. I took it on a congestion breakdown with a fairly wide stop, leaving my 2R target 50c over its ATR, slow but consistent move down with great RW, hit my target on the penny before it bounced.
2nd Trade AQB -0.5R
9.40/9.70 exit 9.56
I rarely trade stocks under $10 and even more rarely short them. I liked this daily chart as it broke its uptrend channel and stayed under a strong 9.50 support line enough room to its daily 50ma. I entered after a pullback with a fairly wide stop but only 1/3 of its ATR used at the time. It failed to break down with the strong market open and stayed in a narrow range.
I actually broke my plan with this trade as I lowered my stop to a pivot where price made a big bounce earlier at 11am with a large seller sitting there. My thought was that if it breaks that level again then it will likely...
1 trade for (-1R)
I took a BD on QCOM. I was worried about the target being close to the daily range, so I took a tighter stop on the 2 min chart. I am looking through PTS right now, most of the examples have 2 options for where to put your stop. It looks to me like one of the stops would be at the bottom of the main consolidation area, and the other at the bottom of where there has been a shakeout or turnaround bar (if there has been one). Due to the daily range I took the tighter one on this. In hindsight it seems obvious to take the wider stop, but in the moment it looked ok.
I was then looking at the 15 min 3BP on QCOM, but the reason I used a tighter stop in the first place was because of the range. The 15 min 3BP would have needed to have gone even further than the wider stop on the 2 min BD, so I didn't take it.
