Trade of the Day

If you heard a grown man crying today that was me crying over my CELG trade. I mentioned that I was watching it in one of the intraday updates today. I first saw it on one of my scanners and I waited for an entry point. I bought above that tiny 10:45 candle. I got in at 52.17 (at 11:01:29 AM) and put my stop at 51.88. (So 1R in this case was 29 cents.) Within 8 minutes the stock had gained 97 cents, or 3.3R. Now it was decision time.

I had two conflicting rules to deal with at that point. One one hand I have a rule to move my stop to break-even once I get 1R of profit. On the other hand I have that rule that requires me to wait at least 60 minutes after entry before adjusting my stop. I decided to go with the former rule in this case b/c I just couldn’t let a 3R gain turn into a loss. So I put in a stop that would lock in a very small gain. Much to my chagrin my stop got hit at 11:36, so I was out with a .25R gain. CELG proceeded to drop all the way down to 51.76 which would have given me at least a 1R loss had I still been in the stock. So I could at least feel good that I avoided taking that loss.

But as you can see on the chart the real fun (and my crying) began about an hour later. I took the stock off of my screen after I got stopped out but I started getting alerts on CELG as it took out the earlier high of the day. At that point, around 53, I decided that I didn’t want to chase it. Then, about 20 minutes later Briefing.com posted the reason for the rally in CELG and it really took off. Near the peak I would have had about a 23R gain (argh!!!). So close but yet so far. Of course I wouldn’t have sold at the exact top but still…