by Cliff Clark
When I was growing up we lived on a farm. There was a creek that ran through the farm. In the summer my brother and I loved to fish that creek. He was the family expert when it came to fishing. He somehow understood which bait to use and where to find the best spot along the creek. We'd walk along the bank and he'd survey the scene, looking along the shallows and the deep pools. Then he's say this is the spot or perhaps let's go home. When I'd ask why we should go home he'd always reply that the river has nothing for us today. If we stay and fish we'd just be wasting our time.
Trading is much the same. We come up with our morning watch lists and we survey the markets. But there are days where the market isn't going to produce for us. On those days we have to try not to cling too tightly to ideas of what should or shouldn't be happening. Opportunities that present themselves naturally will be worth far more than those that are artificially contrived. Like with my brother and fishing we have to know when the market isn't ready to provide us with great opportunities and just move on to something else. The fish will be biting another day.
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.
