Shorting stocks is fun! I made a great trade in BIDU today that netted me about 17 points (documented on Wallstreak). The trade pretty much saved my day from the disaster in UA.
Last night I shared a list of stocks that I thought could fall hard, and BIDU was on the list. When the market was higher at the open I saw that ABK & MBI were cut in half again, and I knew we were going lower. BIDU had broken a critical support level ($300), and I was ready to get short.
The small circles in the chart represent my entry and exit points. I got short around $297, and covered around $279. Hindsight, I left money on the table, but I am happy with the outcome.
I wanted to highlight the trade, because this is how I want to trade from now on. I want to look for critical support levels, and when broken, I want to short.
No more bottom fishing, no more holding stocks! I want to be in and out trades, but only the ones where I can identify a broken trend --no more guessing!
My friend Johnson on wallstreak gave me some advice today. He said don't be a hero, just wait for the trade to come to you. Normally, I do let the trade come to me, but lately I've been forcing too many trades.
I have had a rough start to 2008, luckily I got a huge win today! I am changing my trading strategy, buying the dip just doesn't work anymore.