Today on the desk I heard,”Oh that MON is so hard.”
And it was at times. In fact it was very difficult about 90 percent of the trading day. But it was not hard. There were three simple trades that if made would have left even the average trader profitable. Let’s discuss.
At 82.75 the offer would not lift in MON. I got short. MON traded down a quick 65c. I know, who is better than me?
At 82.50 there was a battle. After the housing number was released initially SPY spiked. But MON could still not trade above 82.50. Can anyone say Relative Strength Play? MON had now showed us her cards. MON was weak. So we shorted some at 82.50. MON traded down to 82. Another nice trade.
MON could not trade below 81.80. I should know. I hit the damn bids there enough times to learn. A few times I myself tried to get 81.80 to drop I hit the bids so hard and so fast. I couldn’t. I quickly covered higher. Ripper.
And this is some of the frustration with trading MON. There are a lot of losing trades. But then 81.80 dropped, I got short, and MON traded down to 81. Another easy trade. In fact I held some until I saw significant buying at 80.40.
You can’t just make the trades where you smash the bids at 81.80 cover higher for a loss, and then proclaim,”This stock is too hard.” You have to mix your results with these three easy trades above. Often developing traders overvalue the hard trades and rips. And then they are hesitant to execute on the easy trades. They are sabotaging their results. Judge the stocks based upon all the trading opportunities it offers. This is a truer picture of how good a stock is as an intraday candidate.
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9 Comments on “Sabotage”
in a stock that is that difficult to trade, how do you know when to size up in the trade? it is frustrating having repeated losers, then the one winner you have is only 500s and barely covers your losses in the stock… when are you revenge trading?
in a stock that is that difficult to trade, how do you know when to size up in the trade? it is frustrating having repeated losers, then the one winner you have is only 500s and barely covers your losses in the stock… when are you revenge trading?
sorry, 500s= 500 shares
sorry, 500s= 500 shares
Ask: Can I make adjustments with this stock to make money going forward? If so then stay with the stock and make the adjustments. Often your first few trades you are paying for information. You paid for this info so now use it. And sometimes you can only make money going forward in a stock at very specific prices and set ups. You must be disciplined to wait for these trades. You must make only these trades. I hope that helps.
Ask: Can I make adjustments with this stock to make money going forward? If so then stay with the stock and make the adjustments. Often your first few trades you are paying for information. You paid for this info so now use it. And sometimes you can only make money going forward in a stock at very specific prices and set ups. You must be disciplined to wait for these trades. You must make only these trades. I hope that helps.
Sometimes it pays to also know what other traders may be doing..the first time into 81.80 set the opening range…so later that morning when that level failed it was a breakdown below the opening range and brought in another group to sell or short the stock and give the possibility for a nice chop. Knowing the other technical areas such as previous day high or low..opening ranges, gaps etc in the stock helps a great deal.
Sometimes it pays to also know what other traders may be doing..the first time into 81.80 set the opening range…so later that morning when that level failed it was a breakdown below the opening range and brought in another group to sell or short the stock and give the possibility for a nice chop. Knowing the other technical areas such as previous day high or low..opening ranges, gaps etc in the stock helps a great deal.
Great call Jeff. And I know you emailed me about making this trade. If you are an intraday trader and you are not short MON below 81.80 and holding for a significant move then honestly your trading needs a lot work.