Making Money When its Available

As traders we are always looking for our edge.  Whether its 5 hours or 5 minutes we need to constantly be prepared.  This preparation starts in the morning with formulating a plan for the day.  What stocks on your list were weak/strong into the close?  What were the important levels from the previous day?  Where do you want to be involved?  All of these questions need to be answered before the opening bell, that way on the open all you are doing is following your plan.  An example of having a plan and following it presented itself in GoldCorp Inc (NYSE: GG) today. 

Going into today I knew GG was a short below $38.  Looking at the charts it was a huge level that the stock could not trade below going all the way back to Feb 16th.  GG traded below it for a little bit yesterday but could not hold.  I knew that if GG held below this number that $37 was the next level of support.  So my plan was to wait for GG to trade below $38, wait for the stock to prove it could stay below this number and then find a nice area where I could manage my risk. 

All of this played out in the first 20 minutes of the day.  GG opened lower pushed above $38 then started trending lower.  I waited for GG to push lower below the opening range knowing that there was a good amount of profit potential and entered on the first pause I saw at 37.60 with a stop above 37.60, so I had a risk/reward ratio of 6 to 1.  I booked half of this trade into momentum when the 10 o’clock number came out and held the rest when GG consolidated around the $37 area. 

They key to this trade was having the plan and making what I should have when it was available.  Everything happened so quickly that if I wasnt ready I would have missed the trade and probably gotten in at a bad spot.  We watched the entire day today traders giving away money instead of trading when things were obvious.  I will take easy .60- .70 moves in 10 minutes any day of the week.  Good luck in your trading. 

Tagged: day trader, day trading, day trading blogs, day trading stocks, equity trading, forex, forex trading, intra day trading, investing, online investing, online stock trading, online trading, proprietary trading, proprietary trading firm, proprietary trading firms, stock trading, stock trading blogs, swing trading, trading stock, TRADING STOCKS