Trade Plan: SEL (Before Market Close)
Here is what happened:
(click to expand)
Commentary: For those of you that watched this trade in the Trading Room the other day… you saw how to turn a bad trade into a profitable one. Even though this doesn’t happen all the time this was a perfect learning example. We called this as a short… we were wrong… the price popped up about 12% after close.. the release was a slight beat but overall the numbers were really not that good. We were pretty confident the pop would become a drop as investors digested the news. That’s the power of hindset, and having the data. We shorted this on Trade #2 at the top of the move as it flattened out and then the next morning right after market open made up for being stopped out at 6% and made an additional 6.5% on top of it. Technically our call was wrong.. but for all you pro traders out their the secret to real profit success isn’t how you slaughter the winners – but how you mitigate the losers. The strategy we teach is the oldest in the books – cut your losers quick – run your winners long. And I should add… whenever you can jump back on the horse that throws you – and ride it till it breaks.
Jump Zone Profit: –12.5% (Stopped at 6%)
Trade #2: 13% profit (6.5% net gain)