Paper Trade, Price Action, IVV Long, Scaling in


Junior member
34 5
Hello, All,

Again, thank you all for contributing to my journey as I study the art and science of trading!

I instituted a trade (on paper, anyway) today. I'm going to paste the chart, and describe my rationale. I'll look forward to getting any comments that you may offer--that is why I'm doing this, to learn. So, here we go, with a chart of IVV taken this afternoon (the market was still open). I've left all of my support and resistance lines on it, so if any experts see me doing something really stupid, please let me know.

IVV PA Trade 1.PNG

Some things that I notice:

1) IVV is in a strong uptrend.
2) 4 days ago, it crossed over a resistance that has been tested 5 times, and held up, since October (see "Test 1 - Test 5" on chart above.
3) I looks like we have a cup-and-handle breakout, with the cup and handle forming since 12/1 (I'm unsure about this, as I'm not really good at chart patterns, so I've labeled this with a "?" on the chart.

Looking at this chart, I had 2 reaction:

The "Lion" in me said "go for it, this is a primo set-up. Besides, because I'm planning on scaling into this position, I'll only be buying 1 share at this time (see my money management post), so with the stop-loss set below the last swing low, I only have about $16.00 at risk (actually about 11-12, but if I get stopped out, I'll probably have to pay a short-term trading charge on my account--but if not, there is no commission).

The "Lamb" in me said, "this looks really good, but let's let it pull back first, and see if that resistance line holds up for support."

I'll confess, I listened to the lion! I instituted a paper position of 1 share today at 285.51, and set an initial stop at 274.10 (I know that's an incredibly small position, but as I'm still learning, I've set a budget for trading of a very small percentage of my account, $2000), and want my paper trades to be as realistic as possible to when I do the real thing.

So what say you all? Is this a pretty decent set up? Who was right, the lion or the lamb? What did my thoughts and analysis miss (notice I'm not asking, "did I miss anything?, because I now that I did, but "what did I miss?," so that I can learn from you all.

My plan is to scale into a larger positions as (and if) the position runs, on future breakouts, picking up 2 more, and if it is running nicely, maybe 3 more shares. Good plan? Bad?

I'll look forward to hearing back from y'all. That is why I post these (and will be posting other trades that I place on paper, so that I can get better at reading the tea leaves.

I look forward to your replies.


AdBlock Detected

We get it, advertisements are annoying!

But it's thanks to our sponsors that access to Trade2Win remains free for all. By viewing our ads you help us pay our bills, so please support the site and disable your AdBlocker.

I've Disabled AdBlock