Wild Card Plays
By Cliff Clark
A wild card play is a play that allows you to break your plan. It's a trade that you are allowed to take that doesn't necessarily fit your plan. Even though this is a play that allows you to break your plan there are a few things you should consider before using wild card plays.
First off a wild card play is not a licence to go wild. Limit yourself to not more than one per week. You don't want to have so many of these plays that it makes you lose focus on your trading plan.
Never take a wild card play when you are emotionally upset. Basically don't revenge trade calling it your wild card play.
Never and I mean never turn a trade you are currently in into a wild card play. You entered the play with a specific set of parameters. If for instance, you turn the trade into a wild card and fail to take a stop you are likely breaking a chart pattern. You might be allowing the stock to drop below resistance which could and likely will turn your wild card play into a disaster.
What a wild card play should be is fun. It could be a stock that you think will blast off at the open and continue to run higher all day. Or perhaps a play that a moderator in the trading room calls that you wouldn't normally take but you haven't traded all day and just want some action. Whatever it is, have fun and enjoy the ride!
Lastly I suggest you track them. You want to make sure you aren't blowing large sums of money. Who knows you might even find you are successfully using them.
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.
