As the market opened I made a couple of trades in the SPY. Both shorts. Neither worked. Then I caught a quick up move in TGT from 31 to 31.40. The stocks I was watching weren’t really doing much. So I looked to the monitor on my left, the one that has my SMB Radar lists and quickly scanned for better opportunity. Both A and AAPL caught my attention.
A was at the top of “Opening Range” and AAPL was at the top of “Strong Today”. It was around 9:50 and neither stock offered me an entry that I was comfortable with so I just watched. Watching and waiting is mainly what traders do. A was down about 3 points so I wanted to give it a chance to retrace before getting short.
When A popped about 40 cents I initiated a small short position. It then quickly ran another 30 cents and I was stopped out. But two minutes later an economic number was released and a large seller appeared at 49.98. I re-shorted. This is important. I didn’t give up on the stock despite the fact that I took a large rip. I wasn’t making a specific technical play where I might only have one chance to be right. I was in a stock that had unusual order flow and most likely there would be several chances to make money. It went down and I made back my losses and then some. (A chart below here shows my executions)
Let’s discuss AAPL. I rarely trade it any longer. Just because a stock has a high ATR doesn’t mean there is a lot of good opportunity. AAPL is the HFT king and rarely is a good stock to trade intraday. But its trading activity was unusual today. Big players wanted in. It was atop the “Strong Today” on the Radar. By the way today’s move in AAPL foreshadows a move to 400 very soon. And if you are having trouble getting your head around that idea stay tuned for a future post on how to view higher priced stocks and their moves.
AAPL topped out after running about 7 points. I bought into a 2.5 point pullback. It was an experience trade. What I mean is there was no clearly established support area for protection. My goal was to pick it up 25 cents lower around the prior day’s closing price but some buyers slowed its descent and I didn’t want to risk missing the quick two point reversal. So I through in my bid at 357.47 and got hit. I don’t think I was ever more than a few cents out of the money. But when AAPL couldn’t hold above 357.70 I sold. Two minute later it was 1.5 points higher. Oops! Of course I was off the desk for the rest of the day except during StockTwits show where it was being accumulated exactly where I bought it on the Open. If you are a pro trader and you were watching AAPL today you should be ashamed if you didn’t buy some in the afternoon at 357.50. You were rewarded with a 2+ point move into the close on a trade that offered 20 cents of risk.
Mike Bellafiore
4 Comments on “If It’s In Play You Will Get Another Chance”
Steve, really appreciate these articles, I know it takes a lot of time to write, but I always learn a lot. Very helpful for developing traders like myself trying to get to the next level.
It’s interesting how your experience told you to buy AAPL at 357.47. Not sure if you use it, but the vwap level was right around there. And even if you don’t use it, your subconscious mind probably knows those levels and more through experience!
Keep up the great work, thanks.
thanks. it takes A LOT of time to write the posts create the charts, etc. i don’t use VWAP but i have found when i check in with traders on the desk that i do enter trades quite often around VWAP.
Thanks for posts like this. Really enjoy learning your thinking process, entries and exits. Please sure more often.
Las tweek or so you also found a nice support for $FDX after results. My question is do you find as many support plays as resistancce plays? Do traders you train have a bias for one play or the other? Reason I ask is I rarely see a resistance I do´t want to short and yet find it so difficult to do the support plays….its a bias…something in the way my brain is wired…and something I need to work at.