Tuesday, July 29, 2008

Who Says I Can't Get Long Financials?

Trade what you see, not what you think, right? It took me the first four hours to lose money today and about 45 minutes to make it all back and then some. I was screwing around trying to short some coal and an isolated financial. I know much better than to fight the tape but one of the reasons I make fairly consistent money doing this is because there is a fair amount of anticipation on my part.I just anticipated the wrong way as the financials were for real today. It just took me a bit to figure it out. One of the trading strategies I use every day is buying gentle dips (or shorts on the rallies) on the 20 ema on the 5 minute chart as I have presented here. The yellow arrows are my buy points. I sold both near the close as they were top ticking there. I would have kept them overnight but I still have trust issues with the financials. The yellow charts indicate what I call the soft landings, it works most of the time and it involves a certain amount of "reading" it. My boy Stewie has mastered this strategy. I don't know if this financial rally will stick, but all the charts I have looked at so far look interesting AND the volume on almost all of them show 30 to 50% increases.

Solar did well, steel and coal rocked, mostly steel, and guess what? The financials lead!!! "Well blow me down Olive Oil" as Popeye used to say. More in a bit, I don't trust anything.


Stewie said...

sweet hgs dude. where the hell was i today???!!

timo4sho said...

Interesting post ... you mentioned you play that Holy Grail strategy almost every day (intraday). How do you scan for those? Do you have several 5 min. charts up and wait for them to touch (or get close) to the 20ema to then just anticipate a rebound with really tight stops? How do you judge on where to put your stop loss once you entered? What targets do you play on those trades?

Very interesting topic indeed as I used to try this strategy, but it hasn't worked out for me ... somehow.



upsidetrader said...

i had my head up my ass until i decided not to fight the tide around 3pm lol

About Me

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I am a former hedge fund manager, broker and capital markets dude who now trades for his own account. I love what I do. I will try to post some stocks and an occasional chart that looks attractive for entry.I will also try to point out the idiocy of conventional wisdom and the lack of value added by the mainstream financial media. These postings should not be viewed as recommendations.