Well, last week ended a bit sour. Some of my positions were taken out for some losses based on support/resistance levels being broken. I have set my stop loss exits to be more "aggressive," i.e bailing out earlier when the trades go against me.
NEU is a good example. The stock had broken above a resistance neckline for a Head & Shoulders play that was projected to have a $25 upside. However, the very next day, the stock dropped over $3 at one point, dropping back below the neckline at which point I exited the trade with my preset stop-loss trigger. I always have TWO stop loss triggers set on each trade, a standard 30% loss exit, as well as a support/resistance level trigger that may or may not take me out before the 30% trigger. The 30% trigger is my Max Pain exit, so that is the most I expect to lose on a trade, and the support/resistance trigger may take me out before the 30% loss which is fine too.
I stepped back from trading on Friday since I was taking some hits and to stop from getting "emotional," but I expect to make some trades this week if any present themselves.
I have a very nice trade going with CVS, which I am up over 40% right now. I have moved my stop-loss up to capture 35% returns so I am a happy camper right now. I expect the stock to reach about $36.50-$37 within the next 10 days at which point, if the stock begins to retrace abck to its diagonal support, I'll get out and wait for the stock to retrace to support and get back in again.
Happy trading!
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