Trading is a skill.  Gaining trading skill takes time.  Today in JNJ and HAL execution trading skill was essential.  Let’s quickly discuss two trades to illustrate this important trading point.

JNJ was in play.  Amazing Andrew was hawking the 62.10 level as intraday support.  Something about the premarket.  JNJ opened and traded down towards his support level.  14c held the bid.  15c held the offer.  We had ourselves a bidding offering battle.

The offer lifted.   And JNJ moved away from this price for this stock to into the 23c area (all things are relative in life). Amazing Andrew got long and held for the next upmove.  Anything else he needed to do?  Yes but let’s get back to this in a moment.

Double A was trading HAL.  A nice bullish flag developed near 48.  The bottom of the range was 70ish and the top 80ish.  Young Double A saw HAL touch 82c and 83c and got all excited.  Long Double A and ready for HAL to rock.  It didn’t rock.   He set his stops for below 70c and waited.  Nothing else to do correct?  Hint.  No.

Amazing Andrew needed to bid for more near this 15c.  Here you double your core and buy extra to make the spread by bidding 16c and 17c. Kick out the extra buying to make the spread into the first upmove to cover your risk.  And hold that bigger core.   Use this well-defined level as an anchor to get bigger.  This is an execution trading skill.

Double A could have sold his extra lots in the 80s ASAP and replaced those shares by bidding at the bottom of the range in the 70s.  So the technique is sell in the 80s right away, bid in the low 70s and then change your stop to below 60c.  You gain all that extra of all that stop out from 69c to 59c.  This can make all the difference from staying in the trade as compared to the day ruining stop out.  This is an execution trading skill.

Keep working on your trading game!

Mike Bellafiore

Author, One Good Trade