Highlighted Trades - 06/20/2024
We had an abnormally active day on our system: 59 trades, compared to our usual average of about 40. Of these, 31 were long, 28 short, and 43 unique tickers were traded. Let’s examine them.
Our best trade of the day was this short on ON, returning 0.78%. I think the entry conditions are great here. The only red flag present is that the Kijun-Sen line slopes slightly upwards when we get in, but looking at the chart we can see that this is due to a brief spike-down during open. That spike established a resistance level we should be aware of here, but at our moment of entry, price action is far enough above it that we can make a solid return here even without betting on a breakout play. This is fortunate, since we end up getting stopped out of our position as the breakout is rejected. Momentum is great going in, as is MACD. If you saw this trade live, you probably also saw a winner in the making.
Our big loser today is AMAT - costing us 0.74% between 2 entries. I think the conditions are strong for our first entry, but the second is more objectionable. Our first entry happens after what appears to be a successful breakout, with solid momentum, a steadily building MACD, and both TK-lines sloping downwards. It looks like we just got unlucky during that first entry, which is unfortunate but inevitably happens to some trades. On the second entry, however, it’s fairly clear that it’s at risk of an immediate stop-out. During that second entry, price action is way too close to the TK-line, with nearly half of the previous candle above it. If you took that second entry, you were essentially buying a lotto ticket. It was almost definitely going to be stopped out for a moderate loss, but had a small chance of bringing in a large return. I wouldn’t have taken that chance - the risks frankly outweighed the reward. It’s unfortunate that these trades didn’t pan out for us, but we can’t win them all.
The last trade I want to discuss is this short on EQT, as a companion to our short on ON from earlier. On paper, this is a questionable bet on a breakout, given the flat Kijun-Sen line and established level around $38.00 during open. But like we’ve seen a few times, the Kijun-Sen line is still being determined partly by pre-market candles, and partly by a relatively volatile opening 10 minutes. For this reason, we have to take it at least partially with a grain of salt. Combine this with the strong Tenkan-Sen slope, respectable MACD, and building momentum, and we’ve got a solid trade. This is a great example of a mitigated red flag. On the surface, it looks like a point of concern, but when we look into the details, the problem is weaker than it looks.
That’s all I have for you tonight. As always, thank you for reading and happy trading!
