Dug myself out of the hole today and ended up $68 green after being nearly $200 down. Six round trip trades: 1 long, 5 shorts with one open position at the end of the day: BLC short @ 1.84.

  • NG short -$60 – followed exit rules but entered trade without a confirmation signal so only good for a scalp play – take profits when you have them on these.
  • ANDS long-$130 – bought into near HOD at $5.55 and stopped out at $4.42, didn’t buy at pullback as shown below – instead chased not wanting to miss out.
  • DDR short +$130 – exited way too early, left some $400 on the table – see below.
  • C short -$100 – shorted with $3.00 break but lost some profit when I exited too early and had to renter as it continued down. This stock was “jiggy” in Scottrade Q-Box right before it went under $3; that was what scared me, I thought it was going to POP!
  • ARTG short +$100 – spiked up .20 cents in about five minutes, scalp short for ten cent drop; when I see a rocket candle like this, its almost a lock it will come down to earth on a red market day.

My Biotech Runner Rules

1) Do not buy into morning spike.
2) If at least two of these conditions are met (news, higher volume and/or former runner) buy at first pull back when price bar crosses back to the upside over 10 SMA on 1 minute chart – unless pullback is at resistance level.
3) Set initial stop order at .5 cents under the pullback low.
4) Follow my overall trade exiting rules (see below).
5) Do this over and over again until I obtain enough information to see if this works.

Rules for Exiting Trades

1) These rules are not for scalps where I am looking to make $100 or less with a quick play of less than five minutes; these are for trades that have clear Muddy method trade entry signals (10/60 SMA crosses, half-buck or dollar price thresholds, red to green or green to red, bouncing off resistance or support of a day ranger, etc.)
2) Set initial stop order to be .06 from purchase price and behind a threshold mentioned above.
3) Stay in trade and do not consider exiting unless initial stop order is met or until a full body of a price bar (not a wick) crosses 10 SMA on 5 minute chart.
4) Confirm exit only when a 10/60 SMA cross on the 1 minute chart accompanies a full body price bar cross on 5 minute chart.
5) Follow these rules each and every time to determine if its working.

I shorted BLC into close; chart shows a recent pattern of swoons in the morning with highs in the PMs. The day range of this recently has been around $1.89 (resistance) to $1.68 (support). I will take a $100 profit on this one unless there is a giant market hemorrhage tomorrow.