Market Ideas

The SPY today broke through the 111.00 resistance level and continued higher during the afternoon trading to close near the 112.10 level. This leads me to think the markets will push higher to possibly test the 50 SMA on the daily charts near the 114.60 level. Today’s break of the 111.00 was done on very low volume which could forecast this rally may  be unsustainable leading to downward pressure, which would fall in line with the higher time frames bearish sentiment. The low volume in the markets and in individual stocks makes intra-day price action choppy and also diminishes conviction in trade scenarios.

I have found it difficult in my own trading to hold on to longs and shorts as a result of the lower conviction in markets direction. But reminding yourself the hard work that goes into finding and developing trade scenarios with good risk/reward potential would hopefully give you confidence to stay with the trade idea. I find it a bit easier to stick with your trade parameters if you write them down on paper (risk point/stop-loss, profit potential, reasons for entering the trade) giving you a physical outline of you idea.  This will help to minimize taking profit to soon and exiting trades pre-maturely. Of course one way to help keep your emotions at bay is with lower share size to allow your stock more room to fluctuate without increasing dollar amount risk per trade; and also exiting a piece of the position into momentum and allowing the remaining share to play out, could help you take full advantage of your trade ideas.

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