I Screwed up the UAUA UAL Corporation Trade

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I hope this post does not turn into a rant.  I screwed up and missed the UAUA trade yesterday and it has been bothering me all day today.  I didn’t even bother to write up the possible scenario here at BestOnlineTrades and maybe that is partly why I screwed up the trade because I did not talk myself through the necessary parameters of this trade.

Two days ago I did my usual scans of almost 5000 nasdaq and NYSE stocks and nothing was coming up in my scans.  Nothing good was coming up anyway and so I was getting discouraged.  Also I have been somewhat off center lately because I have been confusing my own forecasts with that of other’s who are looking for market crashes and big downside.  I am not blaming others for my own general confusion now, I am just saying me dipping my hands into the cookie jar of other’s market forecasts has messed up my own judgement.  That is just a fact.

I just need to keep focusing on PRICE.  And if price does not give me signals of a major trend change then you know what ? I am staying bullish.  I don’t want to be scared money if it need not be.  Because scared money does not make money in this market.  You have to be confident and follow price and then manage risk when necessary.  But to be jumpy and nervous when the down goes from 50 points up to 20 points up is insane.

That is exactly what happened to me yesterday and I am kicking myself for it today.

I could not find any stocks in my scans or elsewhere the last couple of days.  So what I decided to do was manually by hand go through every single Nasdaq 100 stock price chart and see if there was anything that jumped out at me.

I usually look at each chart for only 5 to 10 seconds, sometimes a bit longer and look for attractive setups that jump out at me.  Most of the time there is nothing really worth while.  But then I stumbled upon UAUA UAL Corporation (United Airlines), the big airline.  The chart looked good because it had a tendency towards a cup and handle pattern and had a big volume advance in early August and then a sideways consolidation right under longer term resistance.  Also there was news in July that passenger traffic was picking up in this traditional busy travel season.  So it seemed I found a great candidate after all that 2 hours hard cumbersome work or looking through 100 Nasdaq 100 chart manually.

So what did I do ?  I went in at 6.53 yesterday and stayed in for about 30 minutes but then got scared out because a minor intra day reversal began and the DJIA started declining about 30 points…  It was a totally ridiculous reasoning for jumping out.. I was too focused in on the intra day action.  I should have focused on the DAILY chart and completely forgotten about the market averages.

A big mistake many make when trading individual stocks is to get too worried about the market averages.  Individual stocks many times have a mind of their own and if there is a really good setup chances are it will eventually play out that way regardless of what the ‘averages’ do. 

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On the intra day chart of UAUA you can see from the blue arrow where I went in at 6.53 and then the immediate intra day decline that occurred.  I sold out for about a 2% loss.  But why????  Why did I sell ? There was no reason to sell when looking at the daily chart and NO SUPPORT was broken on the downside.

On the intra day chart above you can clearly see that the intraday uptrend remained solid despite the intra day decline.  I should have been paying attention to that uptrendline similar to the way I was with CTIC some time ago.

So to make a short story long, … I sold out yesterday only to see UAUA gap up today for a one day move of 20%. *sigh*.  What a total slap in the face!  But I deserve it.. I screwed up the trade and I was scared money.

So instead of beating myself up over this anymore, maybe something can be learned here…

Focus on the intra day chart for good entries, but do not overlook the daily chart for peace of mind.  And this is crucial…. as long as the uptrend is NOT violated to the downside it should be considered to be still in force and there is NO REASON to SELL.

If the uptrend line had been violated and I had sold, then I would not feel as bad as I do about this trade.

But I screwed it up! Lesson learned!

Posted in Market Timing, Stock Setups
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