HIG was In Play. 25 was an important level on our long term charts. And HIG found 25. You had a decision that extenuates trading in the HFT era. Do you load up right when HIG gets above 25 or higher after it has clearly holds above this important technical level?
One of our guys was All In right when HIG paraded above 25. Four lots long. Let’s hope for the best. I sent him an email asking whether this was his best play. He would have to deal with the potential above/below movement near 25. Maybe it was. But our question above is something to consider for the intraday trader.
An alternative is to start a small position above 25, but then wait for a move away from 25 and buy a pullback, and then add some more above the big seller at 25.25 (See chart below). Each of these acts made HIG more likely to trade higher intraday. Waiting for HIG to offer more evidence it could clear 25 is a way to adjust in the HFT era.
So the buys are one lot above 25. Another lot when HIG trades nicely up to 25.23 and then holds 25.10. And then more above the resistance at 25.25.
Hey you can be in All In if 25 is a huge level. And there is another way to build your position that adjusts to this new era.
Mike Bellafiore
Author, One Good Trade
3 Comments on “Entering Higher May Be a Better Long for Size (HIG)”
bought one lot on retracement to 25 at 10:31; bought second lot at 11:03. Unfortunately, couldn’t stand incoming pullback
Good point, Mike. Adding to your winner when your trade gets confirmed.
Astonishing post about how to add into a position! Very few articles/post are dealing with this topic ‘when, how and how much to add’. Simply saying ‘i bought here – and sold here: chop!’ is great but it doesn’t tell the essential.