So we were sitting around talking about who was trading what. We came around to ROYL. Some punched it up.
“Nice!”
“That looks really good!”
There was some talk of 6.75 kinda being a level. A quick glance at the intraday charts shows 5.65 resistance. You heard some of:
“I would love to pick that up at 5.30 into a sharp downmove on the open.”
3:50 hit, in a quiet market, with the sun strong outside. 6.65 found pressure on the offer.
Should I pay?
Is it too late to pay?
What if it’s a failed breakout?
Well that is all great. And this is not a blog on the encouragement of overtrading. Just take a look at the 60c move during the last ten minutes of today in ROYL. Take a look. That can be your risk for not being in it.
Mike Bellafiore
Author, One Good Trade
3 Comments on “The Risk of Not Being In It”
If its a failed breakout then you take your loss and move on. You could generate an easy 5/1 upside to downside here, with a high rate of success. Make the move and ask questions later (as long as you have analyzed the move and prepared an exit plan), the opportunity cost of missing out on a fast moving stock like this is too much to ignore.
agreed, super liquid and almost guaranteed you can hit the bid right at your out – risk 2c to make 50
It’s easy to look in hindsight and say “wow I should have been in that”. Move a piece of paper over the right side to 2pm and this looked like a pile of garbage (assuming you missed the open).
Surely there was better opportunities out there while this thing went sideways unless you had an alert around $5 or on a break of $5.20 to a new high. Best entry to me looks like the reversal of the pullback around 5.30 given the volume had gone through the roof as it woke up and a stop below the last low would have provided a great R:R.