Thursday, June 30, 2016

FDP : HVN Sent

Slept through the whole morning of HVN's IPO.
Got to buy in the afternoon session and ended June with a bang.

Trade Template : Textbook ZFT Ceiling Plays

In hindsight, it was the right decision.

Classic case of Buy high sell higher.

Some of the Bushido students said they froze as they watched the price go from 12 to 23. 
They already knew what to do but they just couldn't execute.

There are two possible reasons for this :

1.  No prior experience to the setup / 
Lack of confidence

2. Fear of the unknown

If you wish to kill a medusa, go forward and swing your sword.
You don't stare them right in the face.

End of Trading Journal

Tuesday, June 7, 2016

Unfilled Gaps in a Nutshell

I remember a few years ago when I couldn't trade excellent stocks and super plays because of a certain saying about gaps.

"All gaps will be filled."

When I asked some good traders about certain setups that had gaps, some would always give a spooked and special warning. "Wag mo nang e trade yan! Hala sige, babalikan GAP nyan!" Which ultimately clouded my judgement.

What is a gap you ask? 

A gap occurs when there's an intense buying or selling pressure on a stock, that the price opens a few to several flucs away from it's previous closing price.

Now going back to the statement that all gaps will be filled. Many would say this with the notion that the event will happen immediately or in the near future. But this is not ALWAYS true.

Gaps being closed may happen but the question here is... when?
A week? A month? A year? Probably a lifetime?

Assuming you didn't trade since late January of this year because of the gap that was created during that time - imagine all the opportunity losses.

Assuming you bought COSCO back in 2013 because of the belief that gaps get filled - Imagine your losses and how long you're ipit. 

Gaps are simple events in our markets - if it doesn't get filled, it just means beastly forces are about to appear on the direction of the gap. 

Exhibit A
(Gap Down)

Exhibit B
(Gap Up)

There are many other examples out there.

So the next time you spot an unfilled gap, try not to complicate things. Trade what you see.