Ok,..reread,..I see 218 is your highest price. I thought it was 208. In any event,...are you adding to a losing position then as the price goes higher? Why are you excited about 10% move from 218 which woul bring the price down to $197....which happens to be $7 higher than the last trade price. If you say you average in from 198 and 218 with average short price of 208 then you expect the move to come down to 187....$2 lower than now? I just dont get how you trade a stock that you expect to short from about 4-10% higher so that it will fall to right around where we are now. How do you technicals show you there will be a rise of 10% and then subsequent fall of 10%. If you are using trend lines and resistance as a reason,...Ok I can get that but that is still a weak argument for this trade from a PURELY TA perspective if you ask me. Why not trade it long and then short at 218?...if you truly think the price will rise. Not trying to bash you,...just trying to understand your reasoning for this trade.
Well basically my system works like this. The chance of a 10% move is around 80%. There is also a chance that it moves 20% + or even leds to huge gains of 60%+. So the first zone I will short and the second zone, if it gets there I will short a lot more to control the average price. The 10% will be a nice profit but I do this for the homeruns
I think that is a bit of a cop out if you ask me.... So, did you short today at 193?. I seriously think this is highly likely to be a losing trade for you. IBM just made an new all time high and you are shorting. So far my paper trade from the open on 12-2-11 at 189.92 is winning. Why start a thread stating youa re shorting IBM if you are not going to discuss WHY you are shorting. Also there is no mention of a BUY to COVER price. Do you routinely just average into losing positions? Some clarity would be nice. Not bashing you here just trying to learn as much as possible from you about your reasoning. Good Luck
So far so good. Have you been stopped out yet on your paper trade? I will start to take a small portion off here because I am not a huge fan of the price action. Stop to break even. +10 a share already. Remaning is targeted for 175
Congrats on that. Yes my paper trade was stopped out on 12-13-11 at $192.31 around 3 pm. I almost forgot about this. Well good for you on this. I just think it would be more productive to say why you are taking a trade and what yo usee in the TA rather than just starting a thread and say I'm shorting IBM. It would be more educational to everyone as well. Also, I dont understand why you would add to a losing position if you shorted at $193 and it climbed to $208-218. Also I assume that you would have to have either NO stop in place or a very wide stop on this trade since your upper limit was $218 and you shorted at $193. Thats a $25.01 stop (Buy to Cover) assuming you placed it at $218.01. Which also means you are taking a trade with a target of $175 and short price of $193 so reward is $18 and risk is $25. Not a typical way to trade...but if it works great. Again, discussion would be better with some explaination. N54_Fan
Depending on the price action i would have chosen one 1 of the possible 2 courses of action 1. Add to the short after it breached the first zone 2. Exit the trade and reenter at the second zone depending on the price action, the target would have been determined which would have influenced the decision