Knowing When The Time Is Right
Kenny Rogers said it best, and although
it refers to poker, it might just have a place in your trading repertoire too. Trading
successfully and consistently requires discipline to stay the course, but there
are times when it’s best to take the money and run. Remember, just as the market
will always be there, you can always reenter when the odds are favorable once
more.
In the TM
chat room today (thanks Omare) I was alerted to a potential topping
condition in Artisan Components (ARTI). It wasn’t a TrapDoor Opening
Reversal, but it did have the earmarks of something to watch. With the stock
making a couple of large thrust days higher to fresh 52-Week Highs, I was
thinking that a short-term top might be in place with the gap higher on this
the third day, and time for Johnny Come Lately to jump on board.
My normal M.O. is using .35 as the maximum amount
of risk that I’m willing to assume on a daytrade, barring any gaps or liquidity
crunches. After the initial heads up from our membership I saw a familiar
pattern setup that was ‘painting’ a beautiful intraday portrait.
10:24:29
Intraday
Setup Alert
From the Nightly Daytraders
Report Artisan Components has formed a triangle
intraday after gapping higher. The issue has proven very strong the past couple
of sessions as it broke out to 52-Week Highs. Intraday though, the stock is
currently breaking supports, up. 41 at 25.92, providing potential short entry
opportunities on the 5-Minute time frame.
After Artisan triggered short, the stock flirted
with my ‘line in the sand’. In this case it was the opening bar lows that
coincided with the triangle apex, and just as important, a level that fit within
my risk parameters. Then Artisan moved in the anticipated direction providing
the opportunity to take some off the table, at levels more than commensurate
with the initial position risk.
The problem was that with the remaining position,
I didn’t feel like believing The Stones’ “Time Is On My Side.” It was
quite possibly time to consider taking an additional portion off the table, and
cashing in some more chips. With a third still in the game, I was still ready to
participate in the pot, but now felt the position was in more of a win-win
situation, in case the trade didn’t stand up against the test of time. No harm,
no foul, and no regrets. It could have possibly been more, but money management
decisions always stand the test of time in my book.
As always, please feel free to email me any
comments or questions.