Mediocre Monday

Some days are better spent in bed, or on the golf course, than trading. Today was one of those days for me.

In spite of the fact that the S&P futures showed strongly down in the premarket, I found NOTHING that interested me to short on a gap. So, like an idiot, I found a couple of stocks I could go long on a gap with. The best news first:

DELL had gapped down and looked to be a pretty safe bet to close that gap, given that tech stocks are leading the charge right now. I got in at 29.60 and set a 1/4ATR stop, which was 19 cents. I felt pretty comfortable with that. If I was right, I had a long ways to go to close the gap. If I was wrong, I would know pretty soon. As it turns out, the stock just fiddled around after I got in - up a little, down a little, up a little, down a little. It approached but never breached my stop loss. In the meantime...

...CROX had gapped down too, and I decided it was "due". (I think there is a "trader's fallacy" lurking in that thought.) So, like an idiot, I jumped in long at 45.57 and set my stop at 44.40. I watched CROX wander aimlessly for a while before it decided to head south and take out my stop for a lovely 1R loss to start the day. This led me to...

...the decision to try to capture at least a little profit in DELL once it turned positive. Once I was up a bit, I set a trailing stop at 10c. I ultimately got stopped out for a .8R gain. But, after looking at the rest of the chart, I got fidgety too early. Had I left my initial stop loss, or even trailed at 19 cents, I would have picked up at least an additional dime, if not an additional 16 cents.

The lesson is patience and compartmentalizing. I allowed the CROX loss to get involved in my DELL trade, which resulted in me leaving at least half my profits on the table. If I had let my profits run, I'd be a happier guy right now.

I also shorted WFC late in the day on what appeared to be a nicely formed continuation flag, but I was wrong for a 1R loss.

I also tried a couple of swing trades today with little downside and what appear to be strong upside: NOK and AMAT. I'm short NOK at 39.49 with a 40.01 stop and long AMAT at 18.73 with a stop at 18.43. I'll report on those when the positions close.