Ok so I thought I will do a quick review of my trading plan/strategy and thought process. Firstly Id like to thank tech/a and canoz for always answering my noobie questions and helping me get my bearings. So this review is of TRS (the reject shop) On friday afternoon i saw that the TRS had dropped 32% due to sales forecast for the yr being dropped as a result of bad christmas sales, weaker aussie dollar etc. My main strategy is following mike bellafiores setup/strategy style from one gd trade and the play book which canoz recommended. Anyway on friday the stock plummeted and with higher than average volume. Since it was about 2 million i think thats acceptable and liquid enough for an intra day strategy. All the support and resistance lines were drawn on friday. The price on fridays big drop closed at 11.50. I used that as my support lvl and that was sort of a support lvl over the last few years. I figured that 10.50 would be the next support lvl just because it looked like a resistance lvl the last few years well to me anyway. Friday trading was a bad day for american indexes like the dow, nyse and nasdaq. They were all having a horrible week and i thought thats defenitly going to translate to the aussie markets on tuesday. Monday trading for america was not good either. So Tuesday opens and prices open at 11.30. They drop to about 11.05 comes find support hit 11.75 then come back to 11.50. At this point I would hypothetically have got into that position if i saw the offers hold with signifcant volume. Anyway the bids and offers held at 11.25,11.05,10.95. I would have taken some size off my trade to cover my intial risk and still held the rest for a better move. Anyway at 2:30-3 the prices broke below 10.95 eventually hit 10.56 and then closed at 10.80 or so. All in all it was a good risk reward ratio. I planned to risk $50 (playing with hypothetical $10000 account). This would give me about 1000 shares. So end result $50/800 or some thing like that. Obviously this was all hypothetical and i was paper trading and i wrote my plans in my journal. I didnt base my results on my profit/loss but if i followed my plan etc. Anyway thats just a brief analysis on my trade. I thought i might share it and if any one has any advice feed back please share. At the moment ive onlybeen paper trading in my head for 6-8months and i hope to be trading at a prop firm some times soon (i know sounds to optimistic but im working my but off every day to make it happen, and pushing my self to put more effort because if im not some one else is). Also i was watching the minute charts and trying to read the tape (watch and see what the volume is doing) to get a better idea of where the prices are heading, if should get out etc. Tomorrow if prices break below 10.50 Im thinking the next possible support is at 9.40. However im not sure if it has enough momentum to drop that low.
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Forgive my spelling mistakes loll.