Spot Light Trade(s)
See the three circled areas for today's spotlight trades.
Trade 1 - The first circled area at 11:05 CT on the 1-minute chart above is one of the few good pull backs in price that had a nice defined stair step higher in my direction line on the 5 minute chart for today, and traded for decent distance in today's smaller range day. This low came in with a nice relative low in the NYSE Tick.
In the 20 minutes prior to this point in time, the higher volume spikes in the 1-minute chart were mostly sell volume. The price action "looked" like it was curving lower like it could break lower. The NYSE Tick was staying mostly above the zero line, so I was not really interested in trying a short, but it was enough to distract me from thinking long. I missed this one and this is usually a trade I really like.
Trade 2 - A similar setup to trade 1. This time I was ready and jumped on the signal and got long. Price worked to 1 point in favor, I wanted to try and hold for more profits. After all, it worked great on the prior trade right. Well.. that takes us into trade 3.
Trade 3 - Similar setup again, only reversed to the short side. Wanting to hold the prior trade kept my focus from the short side. The 5-minute chart had "flat lined" the trend for about an hour and did not give me any indication of this move. By the time I realized I had missed a short signal, I was lucky to scratch out of the last trade at break even. It would have been good to reverse my position from long to short, but I have not allowed that in my rules yet.
Why would I do this? There are some subtle clues. The Volume is really light compared to what is expected. But if you look at the 5-minute volume, the "heavier" volume candles are the Red candles. It is hard to say heavier when the volume is this light, but a warning sign.
I think I wanted to see an end of month rally make my long trade a winner. This kept me from seeing the short trade and acting upon it in time.
Trade Wise, Trade Well
John
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