Trading In A Choppy Tape
- Posted by: TraderStewie, February 8th, 2010 at 11:28 pm
- Comments: 0
Today the market is very choppy obviously but made a decent day trade non the less and here’s how we played it.
First of of all: What does CHOPPY action look like: It’s usually low volume up and down price action, usually in tight range action, no follow thru on breakouts, no follow thru on breakdowns. Prices float up and down like ocean waves and essentially go no where.
Here’s how i played the chop using UYM. Rather than buying UYM on a breakout which is something i usually do, today we opted to enter on weakness and sold it where we usually would have Bought it. In choppy waters, you almost need to do the exact opposite of what you think you should do.
Also, never forget: In a choppy tape, you need to temper your ‘greed’ for home run trades. They are not going to happen. Be happy with small wins until bigger trends re-emerge.
Trade details: Bought UYM at 27.35 and sold once it broke to HIGH OF DAY(HOD) at 27.85. So essentially bought the dip and sold it as it started ripping.
Took almost a 2% gain in 45 minutes.
Not bad for a monday morning trade.
Tickers: UYM
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