cover FSYS for small loss, 20 minutes to go in the day

sold FAZ for lunch money

RIMM stalled so I'm out even

bot FAZ, stop set .02 below LOD

short RIMM, FSYS

RIMM

FSYS

cover RIMM taking profits

sold AIG taking profits

bot AIG on the dip

RIMM short with .15 stop

sold AIG, FSYS taking profits because thats what we're here for

AIG

FSYS

FSYS popped up on the new highs list. Never seen the stock before. I'm willing to put a .18 stop on it though to see if it will continue to go higher.

sold that FAZ pop, taking quick profits

TGTBATS continued...

AIG stop shown again. Slightly larger than normal at .19-.20. I would quickly move the stop to 38.50 if the first candle goes my way. I would also be looking to double up trade size if it goes my way.

TGTBATS continued

Here is a FAZ trade currently. Stop was set .01 under previous candle low for .09 risk on the trade.

Conventional trading wisdom says catching this formation is dangerous. But since the information displayed is only information it must be your mind , attitude that make it dangerous. I saw the momentum change so I made this trade. If market sentiment has changed I will have gotten a huge time advantage. If not, I'll still have time to take .25 or so from the trade. The next few candles will tell.

The market doesn't care how much risk you take on as far as stops are concerned. It will do as it will do. Using momentum to set the stops instead of an arbitrary level in the distance past can help you experience pressure free trading. Pressure free trading occurs when the trade moves quickly in the opposite direction of your stop.

The Good, the Bad and the Stops.

Setting stops is one of the most difficult areas to learn to do correctly. Too tight and you get stopped out prematurely, too loose and you get hammered with large losses.

In setting stops I let the neartime momentum tell me where to set it. By that I mean I don't really pay attention to support or resistance levels that are too far in the past. 10 or 15 minutes usually. The further you go back in the time, the less relevant information becomes. Market conditions change all the time with new information the deciding factor on where a stock is headed. What happened days, weeks or months ago is irrelevant to momemtum traders. Conversely the current momentum tells me at what price level the stock traded up or down to. Guaging the momo correctly is just as important for exits as well as entries, they definately work together. I don't look at fib or or osillators as such. They are slow to react and thus give you skewed information. Recent price action tells you how traders are thinking NOW. I focus on playing small spread stocks(.01) so that I don't get screwed by the spread.

An example is AIG from this morning, I gave it a .15 stop, so .02 under the previous candle. The momo did the work for me as it quickly moved up and away. never threatening or hanging about. I sold it a couple of candles later taking good profits.

My stops are usually in the .05 - .15 range and that is due to using the momo effectively.

First chart shows entry, 2nd shows exit.