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  • PeterP
    Post count: 98
    #12535 |

    I did a trade today that worked, but nearly didn’t as a result of what Brad on Shadow Trader called a “classic pick-pocket pull back”. The 15m and 5m SPY charts from today are attached and illustrate the trade (and pick-pocket pullback). SPY pulled back off the gap up this morning so that by about noon there was a nice upside reversal pattern on the 15m and the 5m supporting and turning up – 8 crossed the 21 on the 5m at 1:00 and I bought this week’s 202C for 0.98. It immediately went up to 1.18 (and I was happy) and then the pick-pocket pullback started. The option hit a low of 0.68 and I very nearly bailed out. But at that point the reversal pattern on the 15m was even stronger and way stronger on the 5m (and when the 8 crossed the 21 for the second time at 3:45 was a second entry if you were really nimble). I got out just before the close at $1.25 – so not great, but not a bad outcome.

    The charts attached will show it better than I have explained here. And I know Sue will have severe criticism of entering a trade off these charts on a Monday; so I’ll anticipate that and offer up two comments in my defense: 1.normally I wouldn’t use the 5 and 15 on a Mon, but as it’s a short week it’s more like a Wednesday and 2.when I see a pattern that looks strong I like to take the trade even on a short term chart knowing that it will be a really short term trade that won’t have a high percentage profit – but still, if you can do 30% in an hour or two I reckon it’s worth it (and if I’d been really smart I would have added to the position as soon as the 5m turned back up after the pick pocket pullback, but at that stage I was focusing too much on whether to close it and was simply relieved when it held and started to go back up!!).

    A real life example that might be of interest…..

    Post count: 219

    Great post Peter – glad to see you in the Forum….

    I’m going to give you a pass on the time frame choice – due to the market being choppy with low holiday volume – and the fact that you already pointed it out for yourself…. LOL And believe me —- we all fight this —– one of the toughest things to do as a trader – is to NOT TRADE!!!!!

    What impresses me – is the way you managed the trade once it was in play – this is an excellent debrief of the trade and what you were thinking / feeling ——

    It is often in these choppy days that we get to “clarify” our RULES…. I have found that when I have clear rules – that I am willing to follow – a lot of the stress of trading is neutralized….. Especially when part of those rules include well thought out risk parameters for both our psych capital and portfolio capital…..

    Thank you for sharing this one —– and nicely managed once you stepped off the curb….

    Post count: 98

    And as a follow up, that 15m pattern I saw and traded continued into a very nice prolonged trade today (12/22) as SPY continued steadily up “running the 8”. Ron.F and I both took the trade this morning and it worked very well (again).

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