Friday, July 3, 2009

SEPR - my best trade ever (to date)

Part luck, part skill (strategy - the Keltner/Boillinger Bands break discretionary strategy that is) that got me this quick +15%

The lucky part - it's a pharmaceutical that had a failed drug
test just after I shorted it
the skill part - it was overbought by my Keltner/BB strategy - I look for a wavy short term chart that retraces at least 38.2fib level of the last short term move that breaks both indicators significantly, meaning: most of the candle has to be outside of the bands'
it also broke out of a multi-month high on pretty pathetic volume:

So it was taken to the woods and got chopped up real good on Friday - happy 4th Sepracor!
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Now that i'm feeling sky high it's time to put a cap on my excitement and reduce exposure - that's right, REDUCE, not increase, like the common trading rule is about risk (AKA the better you do the more you can risk on the next trade). Why? because my worst enemy is cockiness. I hate it, it ruined my account too many times so it's time to get more cautious. Not only is my cockiness working against me but there's a whole new intermediate term bearish trend in equities now that is slowly turning into a whole new trading environment. A new trading environment means that much of the structure of the set ups that I've been trading now will change, and untill I know what kind of new environment I'll be swimming in, what kind of new sharks are looming in the deep, there's no reason to keep risking the same amount of capital and look at the charts the same way even though this trend lasted for 4 months now and it seems it won't change that easily. YES IT WILL.

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