Highlighted Trades - 05/09/2024
We had a fairly active day on our system - 17 trades (10 long, 7 short) across 9 unique tickers. Let’s check them out.
Our best trade of the day was this long on CVX. We had 2 total entries, with a return of 0.65% between them. Right away, this trade is pretty textbook. The movement upwards is incredibly smooth, with only 1 stop-out. The stop-out leads to a re-entry, but given how hard the stock price breaks through the Tenkan-Sen support line, I wouldn’t call this a false stop-out. If you were trading this, and decided to take profit there, it would be seen as a fairly reasonable move. The re-entry is somewhat questionable, owing to the MACD going negative, but given the strong bullish momentum, there’s a fairly solid argument to take it.
Overall, this is really the kind of trade we’re looking for here.
Our worst trade of the day was this short on MDLZ, losing us 0.34% across 6 entries. Right away here, I’m going to say that no one lost 0.34% here, because no one actually took all 6 entries. By entry #2, MACD had gone positive and was almost completely neutral. That in and of itself it a pretty big red flag about re-entering the position. The MACD is better defined on entries #3 - #5, but given the rapid entry/exit rate for that stretch of time, these are also obvious red flags.
If you only took the first 2 entries, you capped your losses to 0.22%. If you only took the first, you lost a maximum of 0.15% here.
The last trade I want to discuss tonight is this long on MRNA. We made 0.13% here with no re-entries. We see a good amount of trades where the stop loss limits our overall profit - where we would have done better by buying and holding until the TK-cross reverts. As such, I think it’s important to show the other side of that coin as well. On some level, this signal was a fake-out since the bullish momentum inverted pretty quickly afterwards, but at the same time, since our stop loss was steadily increasing with the Tenkan-Sen line, we still made profit here. Risk management is a complex topic - it always has been and it always will be. Like every entry signal, every stop-out is a recommendation, rather than a hard rule.
That’s all I have for you tonight. Thank you for reading, and happy trading!
