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.
4 comments:
Excellent!
Yeah, in a bear market, something like 3 of 4 stocks will decline. No need to fight the trend.
Smart to keep a watchlist though, for when things do turn. Right now, that feels like it's a long long way away.
-DT
Dude, you are doing great. Welcome to the dark side, lol.
MarketMonk
I'm glad to see your new approach to trading. I sensed over the past couple corrections that you were getting emotionally attached to a couple stocks. This sounds much more objective and a better fit to your trading personality. Good luck!
Agree with the others RC - It is so key to ditch the superman costume and just crank out steady gains. In looking back at my biggest mistakes in 07 one stands out- I held through a fed minutes release. I could have sold for a 20k gain a minute prior to the release but instead sold for a 20k loss about 2 minutes after. I tried to be a hero and I lost 40 grand in like 3 minutes.
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