The Things You Hear That Make You Say, Huh!
By Cliff Clark
Among the seemingly endless source of weird ideas that I hear from traders and there are many, some have always made me wonder whether these traders really understand if they are living in the same world that I am, or at least trading in the same world that I am. While we hear the following statement all the time, a deeper analysis reveals the troubling flaw in its logic.
The statement goes something like "when I make enough money trading I'll be able to afford an education". This is like putting the cart before the horse. Or should I say donkey in this case. Traders that state this obviously don't know what's involved with becoming a professional trader. The odds of being successful without an education are quite low for most people. For most of us that isn't realistic. Instead of investing money in an education these folks are willing to “donate” their money to the market. And those few who are lucky enough to make money in their initial attempts into the trading arena will then state that trading is easy so they don't need an education. Unfortunately for these people luck can only take them so far and when they hit that first losing streak they won't know how to solve their problem. Hopefully they won't be totally broke by then and will finally get that education!
Anything you do in life requires preparation in order for you to succeed. Trading is no different folks, don't cheap yourself, get an education!
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.
