Whipsawed

The usual bad luck continues to be with me.   Daytraded SPY today The first one was a long trade on horizontal resistance break out. Tiny profit with just 100 shares.  So the next trade 500 shares short on previous day close as resistance.   Tiny profit as I close the position by the giant green bar that wiped out my profits.

I entered short again again on the red line resistance.  It went against me momentarily so I lighten my shares down to 300.  The stop got triggered which was unfortunate, but the worse thing is the next bar was a giant green!!   I immediately entered short again.  Low and behold, that was the local high and I got stopped out with a generous stop order below the parallel trend line.

What’s the lesson here?  One, set the stop order either very tight or give it much more room for bigger plays, just not somewhere in between.  Second, honor the stop order and if triggered, stay from the chart for a while or the emotion would take over as seen above.  My main fault was to enter the short immediately after stop was filled.

Fortunately, the day didn’t end on a whipsaw.  The daily and 60 min trends are positive; in addition, there is a “thin zone” to be filled as shown by the rectangle on the 60 min chart below.  My first entry was on pivot which eventually failed, I added on the horizontal support.  If I didn’t have the whipsaw, I’d be more aggressive.  But I was tentative to say the least.  So I took half off on the double resistance – pivot and wedge.  Then I took proactive profit, my frequented cardinal sin in trading.

I then added the new horizontal support, and projected a new parallel dash line as potential support.  Unfortunately my 4 year old was fussing to get the DVD player going and I missed the golden opportunity.  The worry in the back burner, however, was the overbought RSI on the 60 min chart.

A lesson learned here is that the less know stocks don’t get manipulated as badly like GOOG, AAPL, SPY, QQQQ, etc.

Porfolio value: $138,800.

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