NVDA 1/27/17
The night before this trade I was looking at charts and saw
NVDA, right away I put this stock on watch not bothering to examine it more
closely. I liked the flat breakout look it had and thought if this pops over
yesterdays close OR goes r/g this could be a nice long, no questions asked.
Here is the chart with todays action already on it
Now what did I not see? Well what I did not see was that it
had already made a bit of a V move from the support level. The daily didn’t
look too extended in any way but when you see a move like that from support you
should examine closer.
What would have been the ideal play for this stock intraday?
What I would have wanted to see in a perfect world would have been a red open
and set up for the r/g move. Or maybe a solid push out of the gate and a clean
nice orb type play or flag with a clear area of support.
REMEMBER THIS: THE MORE IN DOUBT YOU ARE OF A SET UP THE
MORE THINGS IT HAS GOING AGAINST IT THE MORE CONFIRMATION OR BETTER SET UP YOU
SHOULD WANT TO SEE.
What happened intraday:
So now we look at the intraday chart. What do we see here.
We see a move over resistance, a nice move which got me interested.
Unfortunately a flag started forming a little far away from support , which
would normally be considered a high tight flag because of the daily having
moved a bit already was not a green light. Instead I took the trade in
anticipation of the break. What would
have been the better move . Well since I had taken the trade already I think
being the higher risk trade that it was , the smart decision would have been to
keep my stop really tight , in other words, if it didn’t break out right away.
Get the hell out! Instead I held until it broke the much lower support. Which it
eventually did being that it turned into a lower high type short.
If you look at the daily you will see that it had passed
resistance already , it wasn’t crazy extended so was it a short play? Not
really. It simply needed to pullback to then setup for a r/g type play which as
you see it eventually did!
Lessons learned from today
So today proves that you still need to write out the plans ,
maybe use a little more detail in your descriptions of what you want to see
happen. Second and this is way more important if you have a chart on the daily
side that looks long and you get in at the open, it then stops you out but
later on it sets up again. You need to take it. If your daily big picture idea
is still in play there is no reason to look the other way. As seen on the chart
below there was a great chance to get back in and go for the win, the huge win
which would have wiped out any previous loss. This is the most important lesson
in trading I think.
