Highlighted Trades - 04/22/2024

We had a fairly active day on our system - 22 trades on 11 tickers (18 long positions and 3 short). Let’s check them out.

Our biggest success story today is CPT. Between 2 long positions, we made 0.54%. The only thing I don’t like about this trade is the weak MACD on our re-entry candle. While it is positive, and increasingly so when we re-enter, it’s fairly weak relative to our initial entry. Whether you took the re-entry likely depended on your evaluation of momentum at that point - which, in fairness, is bullish and shows visual signs of taking off. I like this trade, but despite its solid return, there was some ambiguity on whether it was the right move at the time.

Our worst trade of the day was this short position on MCK, where we lost 0.34%. The main problem I have here is the use of premarket data. There are 2 candles early in the day, before gapping upwards, which throw off our TK-lines. This is why we see them moving so erratically until later in the morning. This trade is a tricky one - in that the flaw is easy to miss if you aren’t looking closely at your chart. Premarket data is tricky, as its usefulness depends largely on how much premarket volume is present in the candles. When there’s little volume, or its highly erratic, it can be a red flag, and a good reason to disregard trades that are influenced by it.

For another intersting example, consider this trade on O. The premarket data is fairly erratic, but not moreso than the opening candle. In addition, we don’t get a buy signal until 13:00 - long after the premarket candles have heavily influenced the TK-lines. Even though, at a glance, this one might have had the same problems as our MCK trade, upon examination, we can see why that isn’t really the case here. This trade did turn out to be a success, returning 0.41%.

That’s all I have for you tonight - thank you for reading, and happy trading!