Trading The Edge By Taking The Second Entry
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If at first you don’t succeed, try, try
again. It would be nice to always succeed on the first attempt of a high
probability trade, but quite often it’s the second trade that reaps the rewards.
Maybe it’s those nasty market makers who are shaking the weak hands out, but for
whatever reason, if a trade is still showing tradable edge later on in the
session, it’s time to be consistent with your execution, and put the past trade
behind you.
From my nightly research I thought I had a high
probability reversal candidate in Silicon Laboratories
(
SLAB |
Quote |
Chart |
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PowerRating), based
on the daily chart action.
With the opening of trade on Tuesday, I further
noticed that the extended intraday was possibly confirming the bearish technical
picture with a ‘shooting star’ 5 point high, so at that point I put up the post
to our members.
09:50:56
Intraday
Setup Alert
Silicon Laboratories (SLAB)
is setting up on the extended intraday, as well as the daily in a broadening
pattern. For those that follow Haggerty, the RST
follows the same principles, and is viewed as a potential reversal play, in this
case as a short. SLAB is up .21 at 33.60.
From the chart below, you can see that this entry
didn’t work out. All we can do is accept the small loss and move on to the next
trade. Maybe something else will materialize later in the day, but at this point
I really don’t know how far the potential 5 point might stretch.Â
During the next hour the stock carves out a
consolidation on top of the original targeted reversal point. With the
congestion finding potential support here a new trade idea with edge appears.
10:46:27
Intraday
Update
Silicon Laboratories (SLAB)
on the early entry short didn’t pan out as a small loss would have resulted. The
stock is now consolidating in a Slim
Jim above the prior highs. This could make for a potential entry, as either
a continuation long or possibly a second attempt at the short reversal. The
short would confirm the daily RST picture, while long triggers above the smaller
consolidation pattern would signal that resumption of the extreme daily move
looks to continue. Currently the stock is up .64 at 34.02.
Sure enough, the second entry, is the key to
maintaining the edge….and then some. It’s probably one of the most difficult
areas of trader development, and a definite part of what separates the wheat
from the chaff. Learn the skill of a second entry, when the edge still exists,
and you’ll find you are keeping company with an elite group of trading
professionals.Â
Chris Tyler
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