Day-Trading SPY
May 26, 2010
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RELATED TICKERS: SPY
I haven't dissected a trade of mine in quite some time for everyone. While I give out my trade setups in great detail, I could probably do a better job of giving a post game report on each of them. So, going forward, I'll try my hardest to do exactly that because, for one, it helps you understand the art of managing the trade, my successes and pitfalls, and secondly, it makes me take a greater in-depth examination of how I handled the trade, when I act like a Monday-Morning Quarterback.
In the chart below, I made a day-trade in SPY. The yellow line might find you scratching your head a bit, but let me explain: there was a trend line on the S&P e-mini futures that went back to 6am on Tuesday morning lows. The trend line was a thing of beauty on the 5min chart, marked with higher-lows and higher-highs. But at about 11:30am today, that trend line was broken and I waited for a retracement back up to the underside of that trend line to initiate my trade. I used the high of the day as my stop-loss and a fill of the gap from this morning as my target price (gaps typically are filled statistically, about 80% of the time).
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