Yesterday we challenged some new traders to review their day and create a path to 1k.  Making more is about finding the set ups that make sense to you and trading them with more size and more often.  This exercise guides the new trader to singularly focus on these trades and the mindset of doing better.

One new trader sent me his path for yesterday’s trading session.

Bella,

One of my best ideas today was a 2nd day play in JCP that I even posted on the morning ideas sheet. My plan was to buy pullbacks to areas where it was accumulated yesterday, and add to my position above yesterday’s high. The levels that I posted on the ideas sheet where I was interested in buying were 34.60, 34.80, and paying above 35.03.

It spiked down to 34.64, but I don’t blame myself for not getting involved there. After that, it consolidated above 34.80, which is where I should have bid for a feeler of maybe 200 shares since it was accumulated there yesterday. If I had been in this trade, I would have been more comfortable paying for a lot more size above 35.03. Since I was not in from a position of strength, I ended up paying above yesterday’s highs with only 200 shares. I caught some momentum and since I only had 200 shares, I sold 100 at into the momentum at 35.49. This was a bad sale because the stock did not slow and I anticipated some resistance since it was such an explosive upmove. I sold the other 100 shares near my target at 35.89, because the stock seemed to be slowing in the 90s.

I made $126 on this trade, and it was one of the easiest second day setups I have ever seen. There’s no excuse not to have more size on this trade. Had I been in 200 shares from 34.80, I would have felt more comfortable paying for another 400-500 shares above yesterday’s highs. Even if I wasn’t in from 34.80, I should have had at least 400-500 shares on this trade. If it doesn’t go right away, hit out of half below 35, and hit the other half below 34.75, the bottom of the consolidation. I should risk more on these A setups. Instead of risking $30-50 per trade, I need to recognize my A setups and risk $50-80 plus open P&L in this case. There’s really no reason why I can’t make $600 on this trade alone.

There’s also no excuse for missing the DIS held bid at 43 since it was one of my the stocks I was watching on the open. I moved away from it and traded other stocks. It was a very low risk trade where I could have sized up for a move to 44. That’s another A setup. Intraday fundamentals: beat earnings, Tape: held bid at 43, Technicals: Consolidating intraday, above multi-year highs. I need to be in these plays with size every time.

Very nice job by the trader above working on his trading game.  Perhaps you will consider adding this exercise to your trading practice.

Mike Bellafiore

Author, One Good Trade