20070430 - TRA - 15mins - Gain*Paper

Symbol: TRA
Type: Short
Entry: The beginning of the 9th bar
Exit: Covered during the 18th bar
Result: Gained +0.64%

What a big ouch! First I picked this stock because it gapped down this morning. Prices retraced, and met up with the falling 5eMA. I also pulled the Daily chart (see 2nd chart) and drew a potential Resistance (Blue line) and potential Support (Red line) area. And then I sat and wait.

I noticed that the 3rd - 7th bar failed to penetrate the Blue line, confirming a Resistance level. Then I set my entry point to right underneath the low of the 3rd and 4th bar. It was met during the 9th bar, and I entered Short. My initial Protective Short was set right above the Blue line, giving me a very low-risk entry. I was a little unsure about my observation, and almost exited the trade during the 10th - 15th bar. Then things started to turn south, as planned.

My primary target was set at the low of the 2nd bar, with my secondary target at the Day-low (from the 1st bar.) Therefore, when the price was hovering around my primary target during the 18th bar. You can tell by the upper shadow of the 18th bar that at one point, it was a strong up-price candle on the 18th. I thought the price-drop was over, and I want to make sure that winning does not turn into a loss. That's when I decided to exit the trade.

As you can tell, the prices continued to fall to almost the 138% Fib. Extension.

The positive thing is, I still walked away with a gain.