Wednesday, August 17, 2011

Here is my journal of my $BEXP trade short, at 10:01 AM I will post a more detailed chart of why the daily chart looked sweeeeeeeeeet. It was too sloppy, but I got lucky.

Looking to short $BEXP has a head and shoulders on the daily. Going to watch this $31 level. Yesterday volume increased on the left shoulder attempt so it may not be ripe yet. The 15 minute chart will be my guide, it is still in an uptrend on the 15 minute, looking for a failure at around 31, 31.25, which will form a head and shoulders top on the fifteen minute as well. I will short 300 shares at 31 dollars, with a price target at 28.98, 29 bucks. Shored 500 shares at 31.40 jumped the gun but gave me a good risk reward. I was wayyyyyyyyyyy too early on it, I had a short signal but I did not bother to wait for confirmation on the tape. I got scared at .82 but than I saw clear distribution so I got a bit comfortable. It seems that my judgement wads correct thus far as prices dropped quick to 31.50. My mistake was that I used the daily chart to set a a target, my"reward" , but I used the 15 min to set my stop "risk" , so my risk:reward was at an imbalance. In order to balance my risk, I would have to set my reward based on the same data. If my risk and reward come from seperate data (15 min and daily), how can they be compared against each other. I was attracted to the daily set up, but that is just my screening process. stocks move all day, every movement is recorded, and there are levels throughout the day. If i set a target on the daily, that means I am paying attention to the major levels over the past six months. That is fine, but I need to choose meaningful levels on one timeframe and compare those, because a level on a fifteen minute chart is not at all important relative to daily chart levels, so the R:R is compellingly lopsided unless they are on the same playing field. With $BEXP, the daily chart was a clear short, and I used the daily to set my target. And my 15 minute to set my stop. But that is retarded because intraday levels mean nothing on a daily timeframe. I should have used the daily price action and amplified it using the intraday timeframe to align them. They are aligning now, but my analysis was sloppy.

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