Wednesday, April 21, 2010

Best Trades Work Right Away!!



In my years of trading, ONE CONSISTENT THEME i have seen over and over and over again is that THE BEST TRADES WORK RIGHT AWAY!

Literally, the trade goes on and the trade starts to work within minutes if not seconds. The longer a trade takes to work, the more likely it is to turn into a dud.

The best trades are that the ones that DO NOT question you. In your mind, this trade is a winner as demand for the issue rushes in and traders fighting each other to get in: It starts printing profits immediately!

Best trades work right away, pure and simple.

I attached the ZION and CECO charts for your learning pleasure.

6 comments:

Blue said...

Hey Stewie, one thing I've noticed is that you don't add when you see a trade start to work right away. You're usually all in all out. How come?

Stewie said...

Hi blue,

That is a damn good question. There are Pros and cons to adding and reducing sizes as trades work/don;t work. But for me, i find that being consistent is important. For example, if you start with a certain size and start to increase in random amounts, then you might allow emotions to creep into the trades and cause all kinds of emotions like eating big losses, and taking small wins, or removing stop losses and not raising stops to capture a bigger run and make these mental mistakes that come from using bigger positions.

Is It Possible said...

Q: What % short interest is considered to be a highly shorted stock?

Anonymous said...

Stewie,

What kept you from calling CECO a dud as it retraced to 33.78 into the close on 4/20? What made you stay in vs. getting out? It could have continued to drop instead of reversing to higher highs the following day. Was it just that you stay in until your stop gets hit no matter what???

RRott

Stewie said...

Is It Possible: for me i use shortsqueeze.com and i like to see at least a 5-10% short interest. hope this helps.

Stewie said...

RRott: the education sector as a whole has been very lately: Look at COCO, DV, EDU. The sector and CECO pattern still held firm on the daily charts even after it dipped a little near the close. The overall pattern was still very strong and the sector was equally enticing. Hope this helps.

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