Thursday, April 7, 2011

$IMGN Trade review

"Pull the trigger first, think later"

Breakout trade is no doubt one of my favorite style of trading and today $IMGN was definitely a perfect example of a breakout trade. I sure did leave a chunk on the table but the point of today's post is about perfect execution without hesitations.

 My volume scan alert picked up $IMGN today and this is exactly what I did within the next 10 seconds.

1) Checked daily chart
2) Saw it testing $10.01(previous resistance level on daily chart) with in 20mins of open.
3) Pulled up my trading platform and immediately bought the stock at 10.08.

Some of you would ask me why I entered the trade of $IMGN after it has gone up 60 cents since open. Well, one main reason was Volume.

Volume is absolutely crucial in order for any momentum stocks to work. If you look at the IMGN. The stock's average volume trades around 590,000 a day.


Now take a look at this chart below. I am only showing you the first 25mins of the trading day. So that you can get a feel of what I was looking at this morning when I bought the stock.

This is what happened to the stock for the rest of the day.

 I call this PERFECT EXECUTION. Some of you might laugh at me and say "WTF? how is that perfect execution? If it was perfect execution you would have bought the stock at the lows after all isn't trading about LOW RISK, HIGH REWARD??" NO! Perfect execution means whenever a trading opportunity is present in-front of you. You execute your trade without hesitation. Trading is about being able to take risk and a lot of new traders are having difficulty to enter a trade without over-thinking. They bring in fear in their trading, afraid of losing money or afraid of being wrong. So please get rid of those hesitations and start trading fearlessly.

 Now if you missed the initial entry, and here is what you want to do. A stock can not go up forever(you don't need me to tell that.) therefore, you let the stock pullback/consolidate and stalk for re-entry. Here is what you want to look for before blindly reentering the stock. See chart below.

 $IMGN was no doubt a great breakout trade today. I hope I did a good job at explaining my trading style/philosophy. Hopefully when a similar setup shows up again, you guys would know exactly what to do.


Brad said...

Awesome post. One of your best!

Anonymous said...

Awesome post. Very explanatory, very clear. Thank you.

Tradermarket247 said...

Brad - Thanks

Anon - Glad it helps.

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