rajibde said:I interpret the 'staying out of consolidation' slightly differently to what you do. My interpretation is that each trading day has certain times in which the stocks are in consolidation and it is these times when it is best to stay away from the market. Friday -as a whole did not show much of a movement (as you have quite correctly stated) but it had its moments.
I took one trade yesterday as I had to be out of the house most of the time but lt did produce good results as the stock was showing a good momentum even if the market was sluggish. ( I am very much in a learning stage so pl. feel free to correct me if I am wrong).
Cheers
Raj
edit -PS- there were other stocks (apart from RHAT) like LRCX which showed good movement at the time (this one was good for shorting).
Hi Rai,
Yesterday as a whole was IMHO, a consolidation day. One main reason could be that it was the end of month & end of quarter, where institutions seemed to be happy with their positions for publishing their portfolios to the public; again this is speculation on my part.
But, as I’ve stated in my previous post on consolidation, the Market had a no momentum. In any case to me it just meant that trading risk is higher with no momentum and that any trades should be done with lower trade size, which you did well.
Your entry and exits were right on for a Long, while the INDU was going no where but sideways (the INDU moved up 7 pts at your entry, and finally moved another 8 pts starting at 16:35 (EU). I am not trying to criticize your trade just critique it, the INDU, at your time of entry was moving down & MACCI 1-min was + 165 apprx & still going up for another 3 mins, while RHAT was moving up with excellent volume, & being divergent to the DOW (meaning they were going in opposite directions, from 15:00 till 16:26 was in a down trend). All I can say it was a good trade, although not proper in TA terms. My guess is that due to the consolidation movement of the Market, it didn’t have any affect on RHAT. But, this is my take on the trade, others may differ, the key was your small position size that allowed you to test the trade.
I also did a trade at 14:54 with RIMM for a + 0.29 trade, but was risky, since it had a 1 min ATR of $0.44. But it was a huge Gap play, which IMO had a lot of momentum (too much actually – LOL), and allowed me to ignore the INDU, due to the stocks huge momentum. After this trade, I noticed that all of the Index’s had no momentum & their ranges were noticeably much lower to previous data that I watch, therefore I waited for the market to show me some more volatility, which didn’t occur the rest of the day, so I stayed put.
I found several potential VWAP trades, long and short, but their risk to reward were only 0.10 to 0.20 cents and not worth it for the stocks that I had on my list. Normally, these same stocks have a much higher R:R.
Hope this helps!