Gap Entries HOD/LOD Principle (John Lee post)

A great post by John Lee about playing gaps from www.Chartsgonewild.com. 

1) ISSI (long) – Break of the high of day (Afternoon Secondary Breakout – ASB)

2) POT (short) – Break of the low of day (Morning Initial Breakdown – MIB)

3) NFLX (long) – Symmetrical Triangle Breakout (Pattern Breakout)

4) SBUX (long) – Break of the days high (Morning Initial Breakout – MIB)

5) UA (long) – Break of the days high (Morning Initial Breakout – MIB)

6) CRUS (long) – Break of the days high (Morning Initial Breakout – MIB)

New Trading Set Up!!!!

Lacking Discipline, Need To Execute Trading Plan

Lacking Discipline
Blowing stops
Not selective on Trades
To many "follow trades" with no plan

Trust Your Patterns and Fuck ITrade!

First off, FUCK ITrade.  My RELL stop sell was filled today.  Stop sell @ $12.69, day's low @ $12.70.  Well placed stop (a little lucky, yes) was filled @ $12.71.  RELL rallied to close @ $13.04.  ITrade says that sell stops are triggered by the bid. 

I need to trust my charts, and trade according to my plan.  Bought LPX as a swing play yesterday.  The plan was an entry @ $8.21 (above previous high of flag) and a stop @ $8.01 ($0.01 below previous day's close).
Executed my entry, but sold for a $0.05 loss (thought stock was thin).  Today, it B/O.  PATIENCE, STICK TO MY TRADING PLAN. OBEY MY RULES.  Rather simple.

 

Followed JL into YRCW swing/positional.  Nice flag B/O today.  Initial target is 100 day MA @ $4.50, then the 200 day @ $6.57

Swing position in VG as well.  In hindsight, entry should have been made on break of the flag's high $3.39, rather than break of day's high ($3.31). Nonetheless, I like the look of this flag and have an average price of $3.3033.  Initial target is $3.77, then $4.43.

Traded MU on break of previous day's high $10.11 with good volume.  MU reversed @ 10.20, and I was stopped out @ $9.97.  Still like this flag, but no position presently.

Tomorrow, look for continuation in YRCW(4.26), TUES(5.02), CATY(17.51), ELN(7.10), SMOD(6.75), IO(9.01), PCS(13.51), LWSN(9.65), OCZ(7.88), GRT(9.01), LXP(8.46).

NVDA

Traded NVDA today

Scalped the open for + $0.13, .and re-entered on the break of the previous HOD @ $23.69.  Closed 4/5 of position, carrying 1/5 overnight.

Closed my MOTR short position for + $0.83 gain

Swinging AMKR ($7.79), RELL ($13.054), COCO ($5.25), RNN ($1.625), and CIM ($4.21) into tomorrow.

First Short Sale!!!

Finished "Trading In The Zone" by Mark Douglas and learned a lot about the mentality of a successful and consistent trader.  It reinforces the rules and mindset needed to be successful in such a random environment.
I will be a consistent  and winning trader because:

1. I objectively identify my setups
2. I predefine the risk of every trade 
3. I completely accept the risk or I am willing to let go of the trade
4. I act on my setups without hesitation when my entries materialize
5. I predefine my profit points based on MA / Previous Support/Resistance and scale out to ensure a profit
6. I continually monitor my susceptibility for making errors 
7. I understand the necessity of these principles of consistent success and will NEVER violate them

 2 trades today.  The first was MXIM @ the open.  Waited until the 3rd 1 minute candle for entry and confirmation

 

My second trade was a late day trade.  MOTR was in a downtrend all day.  The closest supporting MA was the 100 day @ 18.85 (HOD), and it was bouncing off the lower BB.  Small position @ $17.89 and rode it down! Shorting is fun!  Sold 1/2 @ 17.54 and holding the remainder as a swing over the weekend.

Of note, my last 2 stops were hit this morning

ARNA for a 5% loss

JST for a 9.5% loss

Market Correction

I had the honor of speaking with John Lee, aka THE CHART ADDICT today for 1 1/2 hours.  Learned so much during that conversation, and will apply my new found knowledge.

• Ask more questions

• Make sure my questions are all answered

• Wait in the mornings for market to figure itself out (5 - 15 minutes right now, this could change)

• Secondary afternoon B/Os are easiest setups - look for break of pattern with price spike and high volume (no need to wait for break of HOD)

• Gap above the high of any black filled candle = bullish kicker (very rare, very profitable)

• Listen to my rules

• Ride out last 1/4 of trades as long as possible 

• Look at MAs, support and resistance levels for profit targets

• Keep an eye on daily chart, don't become tick-tarded

3 Trades today

DNN, again, top picking .  Rushed entry.  Was  waiting for a break in HOD (pre-market @ 3.71), put sent order once it hit HOD.  Quickly reversed.  Exit was a break of LOD.  Happy with my exit, need to be patient on entry

 MNKD was fun.  Flash crash, entered on subsequent momentum candle.  Entry was 8.56, sold half @ 8.90 and other half @ 8.95, but the fills were not good (too volatile).  Actual fills were 8.58 and 8.76.  Small gain, but easy trade.

Also traded ICGN.  Need more patience, and must have a concrete plan before entering the trade.  I am formulating shit during the trade, getting scared, and selling my positions.  HAVE A PLAN AND EXECUTE.
Entry on break of HOD (got it right), just did not give it enough room. 

Closed out some Swing positions today, C for a 6% loss,  LIOX 1% gain , MNI 6% gain.  Still holding ARNA, JST, ASTM

TRADING IN THE ZONE just arrived in the mail yesterday.  Can't wait to read it tonight!