Everything was red, bloody hell. Mr Miyagi (the trader formerly known as Shifu Ang formerly known as Mentor Ang, the man they call the King of Volume Trading AKA the Starving Artist) informed me that the DOW was up 80 points but receded 40 points to close.
That means a failed attempt at running - something was holding it back. Maybe it was the hot weather, or it didn't feel in the mood to. Heck, maybe Mama DOW didn't allow her boy to run out and play.
But the truth was that our decisions were fluked and that we had to think of an exit strategy. Mr Miyagi, wise as he is, told me that it's no longer about how much we can make. We had to get out at a reasonable price before everyone turned desperate sellers and kept the resistance going high.
So here's the equation - you take the day's low, and then subtract the stock's ATR from it, and then drop that by a cent, and then queue. Then you check in to see if there's a new low, and then you review your queue if there is.
I checked once, and the price hit $4.04. With an ATR of 6 (I dropped it because the volume was shit) I set my queue from $4.11 to $4.09.
Got hit, and the rest is tomorrow.
The Breakdown:
Chart from Yahoo Finance.
Fig. 1. Capitaland Intraday Chart, 18 March 2010Capitaland
Opening Price: $4.07 (-$0.03)
Previous Volume: 27,500 (VPH: 4,230)
Closing Price: $4.06 ($-0.01)
Closing Volume: 12,200 (VPH: 1,876)
Price Acquired: $3.96
Lots Acquired: 5
Break-Even Price: $3.99
Price Sold: $4.09
Transaction Cost: $112.7 ($55.44 + $57.26)
The Win: $537.30 ($0.13)
The Score So Far: -$2,505.45
P.S. Special thanks to Mr Miyagi for spotting such a gem. I will work towards stock spotting soon (hopefully). Next to come, a piece on spotting a convincing run.
In the mean time, check out Mr Miyagi's teachings on Resistance.
Danial San, out.
well done on improvising the final sell price.
ReplyDelete=)
on to the next trade!