Monday, January 24, 2011

Waiting For Trades To Set Up

One thing I am working on improving as a trader is letting a trade come to you.  GE is one such trade.  Normally I would have jumped on this trade from the short side on Friday in disbelief of the gap up and the move higher.  The momentum continued into today.  On a daily  chart this pattern played out before right at the April high.  Back then it closed well above the upper bollinger and the following day pushed higher until reversing and then moving down.

I pulled up a 5 day 30 minute chart and waited until GE closed below support which it did.  I sold some Feb 19/20 call spreads.  Ideally I'll buy back the call spreads when the gap is filled.


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