ULTA had a huge gap up move yesterday, but closed very weak. The stock opened lower this morning and I was looking for a move lower. My bias was short, and failed to pay attention to what the tape was telling me.
1. First short entry is one of my favorite trades. Look for an inside 5 minute bar after a large initial move and look for a break of the inside 5 (ideally in the original direction). Good trade, got stopped out before the big drop.
2. Looked to enter long, which was the play for today. Entered on break of inside 5 minute bar, but was distracted (at work and sold the position). This would have held up all day long as the stop price was never breached.
3. Looking short again on break of inside 5 minute bar, again stock was too strong and stopped out. This should have been a clear indication that the tape was looking higher - Higher lows being put in, and shorts quickly stopped out.
RULE BREAK.
One of my rules is that I am done trading if I have 3 losing trades in a row. I had a loss of $49 for the day.
4. Looked long as my short was stopped out. I was looking long as a my stop was at the break of an inside 15 minute bar ($95.87). Entered @ $95.91 with a stop at $95.73. Instead of following the strategy, I decided to exit the position (fear) and stopped out @ $95.85. The trade would never have stopped out and continued to 97.50
5. Rule break 3 & 4
Shorted break of shooting star with 3x size. Quickly stopped out. Loss for the day - $189
Lessons learned today.
Follow the strategy, especially where to place the stops.
Don't break my trading rules.
OK to have a bias but watch the tape
