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March 8th, 2006 by eyal | Filed under Day Trading. |
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The market was choppy today and lacked much volume in the morning. I still had a short bias as most indicators showed red. I tried shorting CRDN and met with the familiar ‘Stock not available for shorting at this time;’ message from IB. The next option was INFA (or DESC) and I went with INFA. After it broke downwards I saw some warning signs in the form of quite a number of fairly large block trades between 25,000 and 100,000. My (pure) guess is that someone took the opportunity to buy into the weakness and the stock moved upwards to knock my stop out for -1R loss and that was it for the day.
Over the weekend I was doing some research for longer term positions but seeing the market action early in the week I avoided initiaing longs (and actually closed two other ones I had on Monday).
Damn it Trader Eyal, we MUST stop trading the same losing stocks. INFA kicked my butt today too !
Englishman Trader.
PS.
CRDN was shortable on CyberTrader. I nearly took that one too.
Englishman Trader
Next time we need to coordinate this, if we both agree on taking a trade then we should fade it instead! :-)
Yeah I’m not surprised about CRDN. A friend on Scottrade got filled as well. Would have stopped me out though with that mini spike around lunch time.
I saw LEXR (but not TTWO) but I try avoiding going against the tape as best as I can read it (which probably isn’t that good ;-) ).
Btw, I think limiting the number of trades a day decision is a very good one. At least while still in learning phase. There’s no substitute to screen time experience, and less risk exposure during the practice mode means you get to preserve your capital till you reach the time you’re consistently profitable. The only other advice, if you’re interested, is to focus on just one type of setup or style with very clear rules which you can easily evaluate if you executed properly or not and have a reliable feedback loop you can learn from.
A follow up on the INFA trade. Take a look where the 50 DMA was … 14.08. No wonder it showed so much resistance against dropping.
Limiting myself to two trades will probably force me to look for one, maybe two specific setups. I would rather not limit myself too much there though. I can still paper trade more stocks too on the same day.
ET
Yeah I was aware of the 50DMA, I don’t normally place too much importance on that thought. I think I’ve seen it work just as many times as not..