I made this trade and why

Discussion in 'Trading' started by silk, Aug 11, 2002.

  1. silk


    I'm starting this thread so that we can all learn what trades work and those that don't. Rules of this thread. POST the trade you made (entry and exit), what you saw to make you enter and exit the position, and any other insight regarding the trade.

    This thread should be a great educator for us to find out what setups are profitable so that we may repeat them ourselves.

    I will start it off.
    Friday morning there was bad news on hospitals, gvt. to increase scrutiny of mergers/costs ect. I saw major hospital stocks THC, HCA opening down big. Thus Health care sector overall i expected to be weak. I then noticed that large HMO's WLP,OHP,ATH were opening down and falling fast as well. Even though the news really didn't concern HMO's, they trade as a sister sector to hospitals and often move in same direction.

    I then noticed that health plan stocks CI and CVH opened sllightly positive and hadn't fallen much. I quickly posted my bullets on these to allow me to sell short naturally. I was able to sell CI at around $82 and CVH around $31.8. As expected these two stocks had nowhere to go but down as their sectors were getting hammered. Not to mention the futures were opening down 10 points.

    I entered the trades about 9:35 and covered around 9:50. I took a quick 70 cent profit on CI and made around 40 cents on CVH. I didn't want to stay in them for long as the news wasn't really about these stocks anyway.

    The obove trades are a perfect example of sector trading and probably the easiest way to make big money in the mkt. When you see news hammering a stock or stocks in a sector, you short other stocks in the sector that havn't moved yet that tend to move with the ones that ARE moving.
  2. Hi silk,

    Do you use charts for your trades or to monitor your trades?

    If so, can you post a chart (screen shot) that contains everything you used (indicators, time interval, sector indexes, etc.)