So I wasn’t suppose to trade today, but I did anyway – not what I had in the plans. However, a great trade in (ICE) presented itself, and I couldn’t resist – the type of setup I should have patiently awaited for more throughout this past week, but didn’t. Nonetheless, I got in at 92.44 (I wanted to get in at 92.40 but  had four cents of slippage) and managed to sell my position at around 3:30pm at 92.96 for a nice 1R gain. Definitely a nice way to end a rather tough week of day-trading. However, the swing-trades, handled primarily by Matt, did pretty darn good. We have gains of almost 20% in Apple (AAPL), and over 11% in TSM and TNH. Not bad at all.

I thought it would be worth mentioning some of my observations and lessons learned that I was able to glean from this week in trading.

  • Be careful about contrarian trade setups that involve going short in an overall very bullish market, as the market can with relative ease, recover from any minor dips in price action; the same goes for very bearish markets too. If you do choose to do so, then take gains quickly as they come – don’t try and ride them into the close.
  • I need to continue to be a little more patient on my setups and let them come to me.
  • Reinforced my belief that I can’t make my stop-losses too tight; yes, extremely tight stop-losses allow for huge increased profit potential, but the success rate in such trades are far less. I consider the sweet spot for trade setups are those that you can find between a  0.5% and 1.0% difference between the entry and the stop-loss.
  • Another tendency that I noticed this week in my trading patterns, was that I would look for a good candle for a setup, or candle pattern involving 2 or 3 candles, but not weighing as much as I should have the overall price action. I got back to that on Friday with my trade in ICE as I bought off a nice hammer candle after 1:30pm and that candle formed in the midst of a cup-and-handle pattern. It is important to remain cognizant of the overall market tendencies and using them to your favor -on my losing trades this week, I was focusing too much on one or two particular candles, when I should have been paying much closer attention to the general direction and tendencies of the market at hand.

Any case, I figured that this may help you in your trading next week and the weeks ahead. The market is constantly teaching us lessons, and those that don’t say so, or believe so, are frauds and should be avoided at all costs.

Have a great weekend everyone and the Stock-Screens and Market Barometer will be updated sometime this weekend.