Prior to taking this trade, I liked a couple different options instead. I put orders in on both of those, but then they dropped fairly sharply, so I cancelled those orders. I continued to sort through the Sizzle Index (now setting an upper cap of $50, and a %Gain range of .5% – 10%), which is where I came across MLCO.
The daily chart doesn’t show it very well because it’s showing the closing price on the day, but when I got to this this morning, it had made a nice breakout above a pretty strong resistance area, it was positive on the day and volume was up, so Looked at the 5min. 3min. Charts.
I used the hourly for my target, but maybe I should’ve looked for more of a pattern forming on the hourly chart as well as the lower time-frame charts. I feel like I’ve done that in the past, so I should definitely keep that in mind going forward. Also, I’d like to trade things breaking out in already established up-trends, rather than potential reversal breakouts, but that’s how the market is right now. Maybe I should, overall, be looking at things that are ranging, and trading the range. That’s neither here nor there, though, and I’ll type a little something up in my journals page to remind me.
Entry – $7.00
Looking at the 3 min. chart, price was pulling back off of the days highs, and had some slight sideways movement around an admittedly weak support level. I made the play that shortly, price would push up out of the small sideways movement it was making to the upside, and make another run, which is where I set my entry and stop.
Entry – $7.00
Target – $7.50
Stop – $6.80
R:R – 2.5
Exit – $6.80
Price did push up and trigger me into the trade, getting to maybe .5R where it based for about 10 minutes then pushed down and stopped me out for a full loss.
Not great. I’ll say the main things are A) not in an established uptrend and B) maybe taking this trade when price was so far in over-bought territory? But the RSI can be inaccurate and I don’t know if I use it, so much as I like having it. I can always put it back, but let me try to trade without it for a bit. I still have the Bollinger Bands that I can use. Other than that, though, I guess I’m not actually that upset with this trade, it looked good, even in retrospect.
We’ll see if it’s a failed strategy — trying to get in at pauses during sharp moves — I could see fake outs happening as well as entering when the trends over. But at the same time, that’s the strategy. I’m riding the waves. Sometimes the waves will crash, but I have to make sure to capitalize when they don’t. Just keep swimming. I think I made a good decision today, hard to say if taking the trade was the best decision vs not taking the trade, but I’m not going to learn by not taking the trades, so I’m calling this a net positive!