Oversold Bounce Setup: GLD

My recent GLD entry was based on the oversold bounce setup. I only took a 1/3 position today, and will add to it if GLD nears the 50 day moving average, which would offer me a better risk ratio.

GS Nearing Bounce Level

GS is oversold and nearing a strong area of support. If the stock drops a few more points today, an oversold bounce entry would provide a low risk trade.

Today's Entry: JEC

I went long JEC today as an oversold bounce setup. Stop is fairly tight.

Quoted in an SFO Article on Part-Time Trading

I was quoted in an excellent article on Part-Time Trading in SFO Magazine. There is some great advice by part-time traders, Brett Steenbarger, John Forman and Dan Passarelli.

http://www.sfomag.com/ArticlePrint.aspx?ID=1426

Today's Trade: POT

I entered POT today on pullback. My stop is at $109 and target $117, giving me a 2:1 risk ratio.

Today's Entry: STP

I entered STP today on weakness. The stock has shown strong strength in relation to the market, and shows a strong volulme pattern on the recent move up. My target is the September high.

Trade: SDS

I entered SDS today. It is extremely oversold and RSI shows a positive divergence. The last 3 similar states have lead to decent, tradeable bounces.

Great Advice on Taking Partial Exits

MSTR is a good example of the "Partial Profit" or "Let it Ride" exit strategy. I entered the breakout-pullback setup at $84, with a target under the old high a limit order set at $89.85 (I always set the target a little below the round number). From there I move my stop up to the $84 entry level to lock in the profit.

The stock continued higher today, and closed with a new breakout bar (though on relatively low volume). This provided me with an opportunity to move my stop up again and lock in more profit. I moved my new stop up to $87 to lock in a $3 gain on the remaining shares. $87 is a good level since a failure of the breakout bar would be a negative signal.

Remember not to randomly pick new stops when "stair-stepping" your stops. You don't want to be stopped out by a random movement/natural volatility. Always look for support/resistance areas when picking the new higher stops.

The partial profit exit strategy will sometimes decrease the potential gain when the second half of the trade gets stopped out. It's easy to think to yourself, "I could have made more by just taking the full profit at my original target". However, it keeps you in the huge moves. These huge moves are well worth the cost of not taking the full profit at the intital target.