Friday, May 9, 2008

Double Bottom Trade Of the Day: Another Day, Another Day of Missed Profits!

9 comments:

Test said...

Just curious why you don't let the MA's take you out of these trades? Once you have solid profit, and the rise seems to be orderly (move up, slight retrace to the MA, move up, etc), you could trail a stop at the 10ema or 20ema and let the market take you out. In this case you could have sold at the close without ever really testing your trailing stop. Just an idea, I understand a profit is a profit though.

PDX Trader

Stewie said...

hey PDXTrader: that's my AOL alias: lol. Are you from portland?

Yea. i am definitely gonna need to figure out an exit plan for these trades. They are awesome and they offer too much reward with little risk if you can spot them right and time your entry well. i just didn't expect X to rally this much with the DOW down 130. that was my logic for selling the entire position. but i have done so much lately that a 'profit' feels like a 'loss' or i got 'robbed' for leaving so much on the table./ notice the volume at the double bottom lows, that's strong indication that there was money buying X at those lows. one of these days, i'll get into my thick brain.

Test said...

Yep, Portland's home...

I hear ya on a profit feeling like a loss, I've had too much of that the last couple weeks. Have a small gain, sell, it takes off without me. Hold a bit too long, and I'm stopped out with a loss...over and over. I mostly play retraces to MA's though, so when I saw this chart that pattern was just screaming out.

Quick question on the double bottom trades of yours. Do you just wait for the volume to come into these before you pull the trigger? And how do you manage the stop loss? If one of these failed I am thinking it could get pretty ugly to the downside.

Stewie said...

well first of all i wanna see a climax selloff of some sort on the 1 min. X was down 7 pts when it caught my eye. once you indentified a climax selloff, then just watch and wait for 'small quick' reaction higher, then watch the retest. if the retest looks modest or tame. then start a position near the lows. your stop is very simple, you get stopped if the lows break. for X my enrty was 166 and my stop(mental stop) is 165.7. risked 30 cents and booked $1.5 but i could have even milked more if i held longer. the risk/reward is there.

Stewie said...

oh, i trade out of portland, oregon too.

Ringer said...

Makes sense. Thanks for sharing. Keep up the good work, I enjoy the blog. I'm off to enjoy some of this sunshine were getting!

paul said...

Stewie, How are you generating your candidate list each day for double bottom trades?

thanks,
Paul

Stewie said...

paul: these are stocks from my daily watchlist. nothing new. These the same ol stocks i watch day in and day out. pot, agu, x, hes, anr, fslr, etc etc. just the strongest momo stocks around. once they start to selloff, that's when double bottom hunters like us need to pay attention as a setup could be around the corner. The theory is the strongest stocks have a tendency to snap back when they are down. timing the double bottom gives a clear entry and a clear risk/reward. plus, i am buying low and selling high and not chasing a stock higher like a nervous wreck.

Andrew said...

I took the same trade but sold at the first spike. I am kicking myself for it also. I would of re entered but I was watching other charts. That dip before the final run was a thing of beauty with the prior capitulation, the retest and then the lite volume pull back. This has been the story of my last two weeks of trading and it is getting to me also. Going to narrow down my watch list and only going for the juicy trades next week and turn this churn around.
Y. Chuck

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