How do you trade when you have low level of confidence in the setup? This example shows just that. Let's start with 46.20 level - you can see how it shapes up as breakout setup up to 10:21. The market however is not very conducive to breakouts. To control the risk tighter, my method in this case was:
- enter half lot on pullback to 46.11, stop under 46
- add another half at .21, stop for full lot at .05
- exit half at .28 and 1/4 at .37;
- trail stop to .15 (low of the last pullback, and where the last 1/4 got stopped and stock went down ever since).
Playing it this way, you keep risk small until setup confirms itself. This is also perfect fit to the idea: play small when uncertain, add when certainty increases. Breakout of 46.20 is a confirmation of strength, thus a reason to increase shares; initial entry is done in a very uncertain moment, thus initial size is small.
Session Time: Mon Aug 15 00:00:00 2011
[09:17] {Threei} http://www.facebook.com/RealityTrader/posts/245397362161613
[09:19] {larisa} gm :)
[09:19] {Threei} larisa :)
[09:20] {larisa} vad :)
[09:24] {RonS} gm...wow...did icahn hit a home run or what...30 mil sh mmi
[09:24] {Threei} Ron :)
[09:24] {Threei} good for him
[09:26] {RonS} i think i read mmi has 17k patents and 7k in pipeline...this is what carl wanted...to unlock the vlaue in those...
[09:30] {Threei} TIMM
[09:30] {Threei} Short Setup: RIMM .80 break
[09:30] {Threei} invalidated
[09:31] {Threei} Short Setup: SLW .30 break
[09:31] {nemo} gonna' gap close today
[09:31] {Threei} SLW stop above .40 or .45
[09:32] {Threei} RIMM got away
[09:33] {Threei} RIMM same setup again
[09:33] {Threei} .80 break short
[09:33] {Threei} 1:1
[09:34] {Threei} SLW stop .41
[09:34] {Threei} out RIMM in full here, 1:3
[09:35] {Threei} SLW half out
[09:35] {Threei} stop to .32
[09:35] {Threei} 1/4 out 1:2
[09:36] {Threei} stop to .26
[09:36] {Threei} 1:3, out
[09:37] {Threei} wow, everyone's asleep this fine morning
[09:41] {Threei} Short Setup: SLW .20 break
[09:41] {Threei} stop above .30
[09:41] {nemo} slw spready this morning
[09:42] {Threei} a bit above the usual, yeah
[09:42] {nemo} .10 to spy gap close
[09:42] {Threei} dino answered the alarm clock call
[09:43] {dino} gm, back in 30 or so
[09:43] {Threei} morning
[09:44] {Threei} out SLW
[09:47] {RonS} eur went nuts
[09:47] {RonS} gotta be a squeeze
[09:47] {Threei} expecting eurobonds to get a nod tomorrow, I'd think
[09:48] {Threei} only to crash hard if no nod
[09:48] {dino} agree
[09:48] {Threei} Euro lives in the land of total delusion, IMO
[09:48] {RonS} means today is a winkin and blinkin?
[09:49] {Threei} it's so far from reality that no real laws of real world longer apply
[09:49] {Threei} fantasy land
[09:49] {Threei} at some point reality hits hard,m
[09:49] {Threei} and that's when a lot of lives and fortunes will be ruined
[09:50] {Threei} just like it happened with RE
[09:50] {Threei} FCX
[09:50] {Threei} looking to short this bounce
[09:52] {Threei} no clear entry yet
[09:52] {Threei} thought of .90 but that was iffy
[09:52] {Threei} worked nonetheless...
[10:04] {Threei} Short Setup: RIMM .30 break
[10:05] {Threei} no go
[10:08] {Threei} Short Setup: FCX .75 break
[10:08] {Threei} .86 stop, not a scalp, targeting .40 or so
[10:09] {Threei} touched 1:1, I was abit too slow on partial
[10:10] {Threei} out
[10:10] {nemo} not a day for break plays
[10:10] {Threei} screwed up this one, didn't have order in
[10:20] {Threei} FCX forms breakout...
[10:21] {nemo} spy isn't
[10:21] {dino} .
[10:22] {Threei} in FCX aggressively
[10:22] {Threei} half lot
[10:22] {Threei} either stop under 46 or adding second half on .20 break
[10:25] {Threei} let's go FCX
[10:25] {Threei} break that .20
[10:25] {Threei} good boy
[10:25] {Threei} stop for the whole lot is .05
[10:29] {Threei} half out
[10:29] {Threei} .28
[10:29] {Threei} stop to .14
[10:30] {Threei} 1/4 more out
[10:30] {Threei} .37
[10:43] {Threei} out last piece
[10:53] {RonS} sbh l .22
[11:06] {RonS} out sbh .34 +.12
[11:07] {dino} gj
[11:10] {RonS} ty mini-ese on a thinny...
[11:11] {Threei} mini-ese, lol
[11:11] {Threei} http://on.fb.me/nXejrL
[11:14] {dino} sm l el .00
[11:21] {dino} stop -.33
[11:38] {dino} el sm l .57
[11:39] {dino} out el .11, +.55
[11:39] {dino} .54
[12:08] {dino} sm l idcc .54 ave
[12:25] {Threei} market is very unconfident
[12:37] {Threei} Short Setup: FCX .90 break
[12:37] {Threei} half lot
[12:38] {Threei} stop is self-evident
[12:38] {RonS} bidu down on fraud link rumors...
[12:42] {Threei} so far so good FCX, refuses to go up with market
[12:43] {Threei} with half lot, stop is negligible, willing to give it a chance
[12:47] {Threei} no go
[12:47] {Threei} whole day today is mostly wating for tomorrow
[12:48] {Threei} Europe is where the next market move is being decided
[12:50] {RonS} means a continental move?
[12:50] {Threei} Merkel and Sarkozy meet tomorrow,
[12:51] {RonS} fi one is bearish does that make you a putin?
[12:51] {Threei} and Eurobonds issuing is a major matter of discussion
[12:51] {RonS} if
[12:51] {Threei} hmmm
[12:51] {Threei} that's too deep
[12:52] {Threei} market at tis point is in deep denial
[12:52] {RonS} ask nemo...not really...lol,,,maybe, too corny...
[12:52] {Threei} no one wants to admit that no matter what they do, EU is doome
[12:52] {Threei} doomed
[12:53] {Threei} the only thing that matters for the next move is whether they kick the can down the road now
[12:53] {Threei} or give up
[12:53] {RonS} hard to understand the fascination with it all
[12:53] {Threei} postpone the collapse, market shoots up
[12:53] {RonS} are they really that afraid of warring with each other still?
[12:54] {Threei} very much
[12:55] {dino} they will kick it down road w/bonds, aka brady type. give up will be out of ther control
[12:55] {Threei} that's how I feel too
[12:56] {Threei} collapse tomorrow is better than collapse today, and maybe something happens and helps prevent it, let's grab at each straw we can find
[12:56] {dino} think about it, those in charge, politicians, are out of job on give up
[12:56] {Threei} right
[12:56] {Threei} they bet their entire life and career on this thing
[12:56] {Threei} not in their worst nightmare could they imagine such unraveling
[12:57] {nemo} good thing for them no guillotine
[12:57] {nemo} their egos would collapse
[13:11] {Threei} Short Setup: RIMM .50 break
[13:11] {nemo} that's a frickin' chopfest
[13:12] {Threei} it is... but as we near the end of day, fear should overtake...
[13:12] {Threei} barring new soundbites of course
[13:12] {nemo} overtook me already
[13:12] {Threei} oh, man up
[13:16] {Threei} invalidated by loomking for another entry
[13:16] {Threei} ummm
[13:16] {Threei} invalidated but looking for another entry
[13:17] {Threei} ok, will try .60 break
[13:25] {Threei} nah
[13:29] {nemo} wlaking up the spy trendline
[13:30] {nemo} not sure, but odds seem to favor another run above the highs
[13:30] {nemo} have to be a bunch of stops in the 121.50 area
[13:32] {dino} out idcc .23, +.69
[13:32] {Threei} wtg
[13:32] {dino} ty, took awhile
[13:33] {Threei} I dunno nemo... SPY looks to me like bounce exhausting itse;f
[13:33] {Threei} daily I mean
[13:33] {Threei} intraday is very vague
[13:33] {dino} coh sm l .40
[13:38] {dino} stop is .24
[13:45] {Threei} 120 is about t be broken
[14:00] {Threei} what the deuce, RIMM
[14:07] {dino} coh rinsed
[14:07] {Threei} going to try and short RIMM .50 bvreak
[14:08] {Threei} double top hunt
[14:08] {Threei} stop is self-evident
[14:08] {Threei} target's 26.10 or so, three partials
[14:11] {Threei} 1:1
[14:12] {Threei} stop to .55 for the lanace
[14:14] {Threei} oh well
[14:14] {Threei} wanted more out of it
[14:15] {dino} idcc sm l .51
[14:19] {dino} out idcc .91, +.40
[14:42] {dino} wow thing went to 61
[15:04] {Threei} sheesh
[15:04] {Threei} RIMM
[15:06] {dino} sheesh idcc 62s
[15:06] {RonS} shees .spx 1201.26
[15:07] {dino} lol
[15:52] {dino} 65s ugh
[15:57] {Threei} seems fear dissipated
[15:58] {Threei} there is no such thing as bear anymore... only bulls roam the orairies
[15:58] {Threei} prairies
[15:58] {Threei} not for very long, I suspect
[15:58] {Threei} OK guys, have a good evening, see you tomorrow
[15:58] {larisa} bye :)
[16:01] {dino} gn all
