Confirmation

Coming into the day my trading plan was short bias for the markets due to the sell off during the last hour of trading and to sell weak stocks such as Halliburton (HAL),AK Steel (AKS), Dow Chemical (DOW) and Macy’s (M); as you can see HAL and AKS open higher than yesterdays low and continued with buying pressure most of the day. But DOW and M were not move higher as the markets were pushing to new intra day highs. Still having a short bias I planned to shorts these stocks on the 15 min ORB or first 15 min swing high the markets formed. Unfortunately these trades did not work out and I took a loss in both. But the real mistake was not recognizing the proper way to trade these stocks that in the this market environment that could have kept money in my pockets.

During volatile market environments, the best thing to do is wait for confirmation on you ideas before placing the trade. For example with my M trade I entered short with a break of yesterdays lows around 10:45am when I believed the SPY was creating a swing high, with a short bias coming into the day I wanted to get a head start on the trade, as you can see in the price action the swing low was not confirm and quickly moved against me back into the trading range where I also had to cover my short in M. This also goes for the longs as well. Took a long trade in Las Vegas Sands (LVS) at 10:15 for a break of yesterdays highs that pulled right back in the 15 min ORB and continued sideways for the late morning and lunch time session.

 

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