It’s April – Spring is Supposed to be Here
Man, it is freaking cold outside still and snow is on the way but wait…. It’s April almost the middle of the month. I’m supposed to see flowers and birds and freaking grass. What the heck gives? So how do we convert this to day trading ?
Okay, here it goes. (ABCD) looks great on the chart; it’s above VWAP, it has momentum and it’s getting over that level I want it to break above. Okay, I’m in the stock.. It had news even… The perfect set-up.
Everything is lined up. The SPY is moving up, the time of day is great, so this should go. It’s a no brainer. It should be Spring, it’s a no brainer – that is what the calendar says. The warmth should be here. Shorts and T-Shirts.
The stock is moving up now (great) …. Little bit of a stall now, not getting that push (continuation), stock not doing what I expect it to do. SO WHAT DO WE DO…. now…
We STAY DEFENSIVE! This is what I tell my traders. We go into every trade no matter how great the setup looks, with the main thought of ‘if it doesn’t do what we want, we get back out either flat or with a small loss’. We act like a spoiled brat – if we don’t get what we want, we just leave.
Whenever I take a trade I think worst case stop first. I wait for my entry price to trigger, I adjust my share size to my stop. I look at my level 2 to see the action, the spreads. I’m watching the price action on the charts, the candles to a see if there are a lot of selling shadows etc..
So like the weather, anything can happen. For trading you have to be thinking defense first. So, we keep our winter coats out in April, to stay dressed warm. We may not like it but it’s just something we have to do. Keep your losses small. “Small losses you never remember. Large losses you never forget”
Sure I could ditch the winter coat in April because that is what the calendar says I’m supposed to do. The actual weather says not to, so I put the coat on and deal with it. The T-shirt and shorts, I hope, will becoming soon.
Mark Douglas said “Anything can Happen”