Just a few charts to show what I was looking at and trading today. The chart below shows my entries indicated by the red arrows; my stop levels indicated by the white lines and my exits; the first green arrow is where I got stopped on 500 shares and the second one is my limit exit.

Here is what the chart looked like after I exited at 84.35.

If I had not used such a tight stop I could have caught this move with full size and been done for the week. Oh well, the market was a little thin to start with and is still acting squirrelly, so I don’t want to risk too much capital.

In line with this trade, I noticed MA setting up a nice Inverse Holy Grail (IHG) on the 5min chart with two Doji consolidation bars. I thought seriously about shorting it with 500 shares, but erred on the side of caution. Would have been a sweet trade. So it is jut before lunch and I have made $325 on one trade, missed some big moves and I am done for the day. I should have kept my stops looser and not tightened my profit target. V was weak as the market was moving up to fill the gap but I didn’t read the signs correctly.

I started getting short on Monday and accelerated my selling on Tuesday. I also added a little today but will take a wait and see approach before I put on full positions. We are now down about 4.5% in the last 3 days and we will likely see some consolidation/reversal in the next 2 to 3 days. I will look to add to positions during this time given the right market circumstances. I am currently short BA, MMM, CAT, XLF, CAM, and ARG. I also have a few other names on my watch list that are also looking good. I will post an update if I start these positions. Here are the charts.

This morning I waited for setups to happen before taking any trades. I was watching some of the techs and saw AAPL breaking its opening range and RIMM was making a strong move up. I got in both of these at 9:00 with 100 shares initially and then doubled my position. RIMM didn’t work out and I was stopped on the trade for about a $200 loss, but I continued to hold onto AAPL.

After getting out of RIMM, I noticed that FSLR was touching its 20-SMA so I stepped in 200 shares looking for a strong move up. I was stopped out of this trade also as it traded back below the 20. I was hit for about $300 on this one. I was still in AAPL and looking to hold it for a goo move up. I kept moving my trailing stop up and was eventually pulled out of the trade just after 10:00.

After this trade I had to leave the office for a few hours to take my wife to the doctor. I got back just before 2:00 and noticed SHLD trading down to its 20 where I was tempted to take the trade. However, the market had a small pull-back and the sellers hit SHLD for about 1.5 points. After the quick sell off ther was quite a bit of sideways action which offered a good entry and a close stop. I took this last trade, set my stop and held on for the move up. I should have put on more size since the setup was favorable, but I only had 200 shares. The sideways action continued for a few minutes and then the buyers returned to the market and pushed the price back up to the 20. I had to leave early to pick up my brother’s kids from school and to run some errands, so I exited the trade near the 20 for a quick $120. Had I not had to leave I would have stayed with the trade with my trailing stops in place and could have potentially doubled my profits.

Stupid me had to go and open my mouth yesterday and mention my now dead 4-day winning streak. I suppose I jinxed myself. I had a short day again because of piano lessons so I was taking it easy. I only took two trades before lunch in FSLR and RIMM, both for small losses. When I left after lunch we were down over $100 on futures but when I returned a few hours later tradeitp had made the losses up and managed a small profit. Driven by his turnaround and the fact that I didn’t want my winning streak to end I looked for something to trade in the last 30mins. SPWR looked decent and I could put in a close stop so I shorted 100 and then added another 100. Of course, my stop price was hit and I was filled at the market which caused me to lose an additional $140. So much for keeping up my winning streak……

No charts this PM.

Today was another one of those days that could have been so much better. I traded well, but a few small losses and other mistakes ate away at my one big winner. My first trade, and my first mistake, came in VMW. I was short 200 shares on a flag and 20-SMA touch. I waited for the breakdown, and when I went to put in my stop I put in a sell stop instead of a buy stop which filled me at the market for another 200 shares averaging my entry much lower. Stupid. I quickly covered these unwanted shares a set my stop correctly. My stop was hit and I came out with a $14 profit that should have been at least $100.

My second trade was my best of the day in FSLR. This stock has been a cash cow for me. Since I first traded it on Nov 9th through today I have made almost $2k. That is our single largest winner in daytrading. Anyway, back to the trade. I was long FSLR after the huge rally and subsequent sell off in the first 2 hours of trading. I was quickyl down over $300 on the trade but I held on having confidence in the trade and it came back up and traded sideways for 15min. At this point I thought about my rule of exiting a big loser if it come back to flat, but I still held on. Then in one 5min bar FSLR ran up almost $4. I kept moving my stops up, trying to stick with my plan from last week. I was looking for the trade to reach the 20-SMA where I would exit at the market. The move exhausted before it got to my desired exit point so I cut half at the market near the highs and tightened my stop on the remaining shares. At the peak I was up over $700 but after my stop was hit I was left with only $440 in profits.

I also lost a little in RIMM, some more in VMW and gave back a little of my FSLR profits later in the day.

I am still indecisive as to whether I should be setting stops or taking market exits whether it be for profit or loss. Setting stops as protection on the down side keeps your losses small so I don’t get caught in another MA. If I had> set a stop loss on the FSLR trade, then I would have lost money and missed the profits altogether. Setting trailing stops on a winner is really just insurance that you don’t let a winner turn into a loser. It also helps you hold on to a winner, especially in the case of a momentum stock like AAPL. However, these trailing stops sometimes mean that you miss a market exit at the top only to be hit on the way down $2 lower as was the case with FSLR today.

I am slowly starting to realize that neither exclusively using stops nor exclusively taking market exits is the best way to trade. Some combination of the two will most likely yield the best results, but finding that equilibrium through research and experience is proving difficult. Maybe I just need more “time in the trenches” so to speak.