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BASICS
Two days later I was able to hold
through the volatility because I was using
end of day stop losses.
Scaling-In
Two days later I was able to hold through the volatility
because I was using end of day stop losses. My original
stop was SPY closing below the 10 day moving average
thus invalidating the break out. It sliced through but
quickly recovered to close higher. Three days later SPY
was able to close above the 50 day moving average with
power. So I added the other half of my account ($130,000)
to bring my position size to $260,000 total. I moved my
end of day stop at this point to under the 50 day.
I held as SPY gapped up and was in a price base for
a few days. I then moved my end of day stop to the 5
day exponential moving average. After a few days it
then gapped up again to $170 and finished at the low of
the day with a nasty black candle.
I stayed in and kept my stop at the
5 day exponential line. In my trading F1) SPY Trade
I have not found one black candle to
mean much, it usually even resumes
the trend after a day like that. It did
recover the next day after the black
candle, I was still in.
may go parabolic at that point I thought. No such luck,
buyers were not coming in over $173 at all on Thursday
and SPY was very extended over the 5 day exponential
moving average. With most of my reward already having
happened and more risk of a retracement back to the
5 day line than possible gain to the upside I decided to
take my profits and I would probably have a chance to get
back in with a better entry as the 5 day line caught back
up to price.
Conclusion
It was a great trading campaign and I ended with an
almost $11,000 profit in two weeks of holding a very
stable position in a low risk index. I’ll take it. «
Exit
Then came the FOMC day (Federal
Open Market Committee). I had to
follow the chart and stay long with
it sitting right at all time highs with
a catalyst on tap. Everyone that
wanted risk off was likely out and
waiting to get back in when the coast
was clear. Everyone waited for the
word “taper”, when it was steady
as she goes the SPY exploded up
to over $173 then came back to
close at $173 on the day. I held, we
The first mark shows the entry. The second mark shows where Steve Burns added to his position. Finally, the
third mark shows where he exited the whole trade with a good profit.
Source: www.tradesignalonline.com
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