Practice Trade
After closing out SOFI, I started glancing through the charts that I had pulled out this morning. I didn’t really plan on taking another position, but I wanted to see how they had moved since I pulled them out — just to see if I had the right idea about the direction.
When I got to AKAM, though, it had a very nice retest forming. I was on the 5 min. chart, so I didn’t see the overall direction right away, I just saw the pattern. Where it was, it was a good candidate to practice getting in at my retest levels, rather than on the break. I checked the 2h chart first to make sure, and price was way down — had gapped down, so it looked good to me. I could argue that, maybe, I didn’t look at enough higher time-frames, but I could make a stronger case for when I take too far out of an outlook, and I lose the trade intraday and watch it gap in my direction the next.
Initially, I thought I’d have a bad R:R, but when I ran the numbers it was surprisingly high. I thought about which account to take the trade in — practice or live — and ultimately decided on practice since I only have 1 DT left in ThinkorSwim and, technically, I’m still practicing this strategy.
Initially, I wanted to test using a limit order again. And once again, it didn’t go well. I just can’t foresee me using them at all. Maybe I will on, say, a trade I take on the daily chart and my stop is $7+ away, but I don’t think I’ll be able to day trading
Maybe the other scenario would be if the current price is several dollars away from my desired entry? On a swing trade? I’d like to figure it out. Everything I’ve read about using limit orders sounds like they’re something I’d like to use, but every time I try it doesn’t work out. I’ll figure it out one day.
Back to this trade: Shortly before triggering, price made a couple of candles with longer upper wicks, so I continued to feel good about it. Price eventually triggered me into the trade, and, I mean, it wasn’t immediate, but pretty quickly price pushed in my favor. At 1R, I moved my stop to break even, then the first SAR — price was down enough that I wasn’t too worried about it.
Entry – $76.60
Target – $75.78
Stop – $76.75
R:R – 5.47
Entry – $76.60
Exit – $75.82
Price eventually got close to my target, so I started following the SAR on the 1 min. chart. Eventually, I left my stop at a small support/resistance area that had formed on the 1m chart where it was triggered to exit, but for a nice 78¢/share profit.
Lastly, this trade exited around 10:45 this morning, and I’m journaling this now at 2:45. I mention it because since 11 this has been pushing back up. I’m not saying I predicted a bottom by any means — that’s why I use the SAR for my exits — but it is why I like starting my top-down analysis on the 2h chart, rather than daily.