This Small Loss Makes Perfect ‘Cents’
I like to have as much
confirmation as possible when looking for a potential trade set up. But, let’s
not forget the most important part of defining a trade with edge, and
that is keeping the losses small with a stop loss below levels that break the
validity of the original reason for trade entry–but ultimately saves the bank
from breaking on any one individual trade.
11:38:53
Reversal Zone Alert
The semiconductor HOLDRs (SMH)
have tested the 50% Fibonacci retracement level from the March 16th lows, as
well as ‘filling the gap’ at session lows. With the sector proxy off .38 at
39.24, the SMH is one to watch for potential reversal plays off a hold of
supports.
11:54:39
Intraday Setup Alert
National Semi (NSM)
is forming a potential
1,2,3 low on the 5-minute chart, against prior pivot highs on the daily
(3/12). NSM is off .88 at 41.10.
The individual trade might not have worked out
this time, but with a small loss and the probability of much better results next
time–I’ll surely stay ready.
Chris Tyler