Today I made a total of four trades. Firstly, in the morning I longed $COOL; more out of frustration of not being able to short $ROYL than in anticipation of a bounce. I figured that the markets were going to gap down and then rally hard today but that did'nt happen and needless to say I got stopped out for a 1 R loss or $40.00 + $10.00 in commissions. Then later today, at around 2:00pm or so when I thought the market were surely going to put in a reversal candle and close green on the day; I longed three stocks: $DUSA, $SABA and $GLUU. These were among the best long set ups on my watch list and they offered the best risk/reward of all. So I figured if the markets are going to bounce that these were the best trades to take. Needless to say the markets did not close green and further selling looks very likely as evidenced by the 15 min chart of the $IWM below...GULP!!!
|8 Day, 15 Min chart of the $IWM|
Although I do not like weakish close in $GLUU; I am not really worried. I am very confident in the logic behind the trades I have put on and even if I get stopped out of all three positions; the maximum draw down on my account will be only 5% barring an extremely huge gap down in one or more of my positions. In addition, I will need only one of my positions to hit my profit target to make an overall profit since I aim for profits three times my risk on a single trade. So you can see how the math works in my favour. Here are the charts of the stocks I got long:
What do you think?
Good luck tomorrow!