One Good Trade
There is always a book! That is generally my motto. That heading is a book by Mike Bellafiore. It is an inside view of a "prop. trading shop". If you are into the deep end of proprietory trading, I highly recommend the book. But mind you, this is not a "get rich quick" book, or "how to make money" book. It is quite dense at times, also quite witty at times. In addition to that Mike is not a writer, so it is not an easy book to read. But with all those caveats if you do read the book and understand it, I am telling you, it is bliss! So I borrowed the title of the book for my heading! Hey, this is not a review of the book. Feel free to go to goodreads by following the link below to read reviews!
The reason I started with the title is simple. As a trader you are always looking for 'that perfect trade', where everything you expected that will happen actually did happen. That is 'one good trade'. As a trader that is all we look for a single good trade and then the next and the next!
The Trade
As you know markets been weak lately. After the high of Oct 20th, it is mostly trading down to sideways. Today with the morning release of the news that US hit a new fresh Covid cases high, and the adminitration's response of 'do nothing' took a high on the pre-market. But as the market open, mostly due to strong tech sector, S&P 500 rallied! This created the perfect opportunity today!
From the opening till the first 30 min, market rallied nicely to touch and go above the VWAP. The blue dotted line here. Pre-market trend was already down. The bad news was already out. Market went overbought on a downtrend! This is a perfect set up. I entered right above VWAP as it can't pull and high and failed. Entry at 3426 with a stop at 3436, slightly above S2! Market is trading below S2, that should be a sign of major weakness! I didn't put in a target at first. There is all the sign that it can go down a lot. So a standard 20 point target is meaningless, that also explains the wide stop. As I don't want to get stopped out. As the market sold off, I put in a target below pervious days S2, at 3380. The trade was closed at 10:30 with 46 point profit! Market went down further and then rallied back up again. But at this point I don't care. I am done for the day!
One good trade!
Disclaimer: This is NOT professional advice, this is all just my own opinion and experience. I am NOT a Certified Financial Adviser. Consult professionals for any financial, accounting or legal related questions you have.
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