Hey everyone,
Here is the trade recap on my $XL short trade. I am still new to trading, but I liked my performance today.
It was not a big win, but a win is a win :)
Entry: $55.98- 7:50am
Bias: Short
Risk: $56.04
Price target: $55.39 ($1 range from HOD) based on stock's average daily range
Exit: $55.83
$55.76
$55.78
$55.91
Reasons for Entry:
- Formed double bottom, but couldn't hold higher low
- Looks like an inverse cup & handle
- Huge gap to fill from gap up
- Red day on gap up
Plan:
- Looking for break of $55.95 ( double bottom support level)
- Average daily range is around $1-$2
- HOD is $56.39, so price target looking for $55.39
Reasons for Exit:
- Covered after each $.10 wash
- Long consolidation at $55.75s- $55.79s, and it looked like that may have been the bottom so I covered more
- Left last 15% of shares until it breaks $55.91 or continues fading towards end of day
Lessons:
- Long term daily chart is very important
○ Factor in where the stock is in term of 52 week range
○ Ex) If it is overextended on 52 week, it may have lower chance of getting long term buyers
- Cover profits based on your emotional awareness
○ Ask yourself: would I be content if I made this amount of realized profits?
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