From looking at some of my trades today you might be wondering how I can time the momentum so well. The APC trade here in particular seems like magic but here is how it happened.Being short APC I am looking for a good time to cover. The key being that 10 minutes earlier RIG already made a jump up. I'm long RIG and watching profits grow. APC is still meandering lower. Most other oil are rising now too. So it is just a matter of time statistically speaking before probabilities start to lift APC. My gut feeling said this is no time to be short APC and if a short is no good, I must go long. The odds say so.
Moments later it starts rising strongly.
If an initial entry shows profit and the stock is lagging in comparison to its peers, the only logical action to do is to add size.
So it is far from being magic. It is just seeing and recognizing what the markets are doing and acting on the information.
1st chart is short cover and long entry
2nd chart is exit.
1 comment:
thanks for that insight. from my perspective, one of the major points is that you are already short and looking to exit at an ideal time, and most likely, go long.
what has helped me in my trading recently is having an imaginary trade on in the stock before i actually trade it. especially, with my first trade of the day. i'll explain myself hoping that it may help some other traders out there as well.
for example, with APC, lets say i saw the chart around 11:15. i say to myself, if i had a position on, which way would it be. obviously short. then i say, where would i be exiting that short, as soon as the downtrend was broken, smaller candles, and/or doji. we see all this happening between 1120-1130 and the 1130 candle breaks the downtrend. this would be the obvious exit area but it is also the best entry. basically, instead of looking for the best entry signal, it helps me to look for the correct exit signal from my pretend position and use that as my real entry.
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