Happy Saturday Bella and Steve,

I’m reviewing one of my old trading tapes and wanted to get your opinion on a trade I executed in TVIX back on 7.11.11. Let me setup the trade for you:

Basic Sup and Res Play

Prev close: 16.36
Res: 17.90-17.95
Sup: 17.70, 17.50

Gapped up to 17.30 pre-market, consolidated around 17.45-17.50, started an uptrend still in the pre-market to 17.90ish, retraced and consolidated for awhile at 17.70ish, channeled back up to res at 17.90. On the open it pushed as high as 18.06 then retraced back to 17.70ish sup level.

17.69 was where I got long with 400 shares at 9:39AM, exit below 17.60, with a target at 17.94, risk to reward 2.5 to 1. Scalping $0.20 in a trade was what my old prop firm pushed, and was the trading style that I was taught.

This trade did eventually push up to 17.94 and my limit got hit on the offer.

My question is (for a developing trader like myself) would you have taken the whole 400 shares off at 17.94 or exited half the position and let the other half run? Would you have held all 400 shares? Bought another lot? I suspect you probably would have bought more once it broke through, which it did and continued it’s uptrend all the way to 18.40 by 10:10AM. There are a lot of other variables (long term chart w/ sup and res, overall market, what the tape shows). Dow was down 132 and S&P was down 35 during the open (no effect on TVIX). Still need to improve my tape reading skills but I didn’t see any huge prints, or held bids or held offers at specific prices after it broke through 17.94 and even when it broke through the whole # or the HOD on the open. The spread remained pretty wide 0.04-0.07. Hopefully this paints a decent picture of the trade. If not, I can send over my trading video.

Thanks guys!

Bella

Good job working on your trading game with the review above! A few things that are important to know to review this trade properly.

1) How much higher do you think TVIX can run intraday? To determine this I would look at the previous intraday price action and the longer term charts to see the next important resistance level. I would also want to know the intraday news to get a feel for how much more TVIX could run. If my sense was TVIX had the potential for a few more points to run then I would be slow to get flat. If it didn’t then you might ask, why are you spending so much time intraday with this set up?

2) How strong was the market on this intraday? Was the overall market near R? If so then I would be quicker to sell. Is TVIX trading stronger intraday than the market? Has it shown a weak intraday market will not drag it lower? If so I would be slower to sell.

3) What kind of a trade is this FOR ME? If this is a Trade2Hold, then I am slower to sell. If it is a Move2Move trade then I am more willing to exit. Why did you start this trade and what did you expect?

You may have noticed I answered this Traders Ask with more questions. It is more important how you think through trades then your decisions. It is more important for you to decide the best plan of attack for you with each set up. This makes you better.

I hope I have given you some things to consider for your trading.

How would you attack this set up?

Bella
One Good Trade

no relevant position in TVIX