I tried a long IBKR trade but had to abandon it before it drowned.
I liken a new trade to a child just learning to swim who jumps into the waves. The first strokes are very important. If the kid struggles and his head starts to disappear under water, then there is an issue. If he cannot get the right moves that will help him stay afloat, then we have to rescue him.
At what point do I decide to rescue a new trade?
I like to buy strong stocks that are pulling back below their 5MA (but not lower than 2% below the 5MA.)
The pull-back must not attract sellers, which means its EV pattern must be flat or better.
IBKR met that definition and I bought when a price bounce occurred after an early pull-back.
However, a few minutes later, the price broke down below my purchase price of 23.93 and bounced at 23.75. This bounce is important, because it sets an intermediate low. If this low breaks, I would consider either cutting my position in half or selling it right away.
In hindsight, this was a good decision as IBKR broke below its 50MA on heavy volume, with a very negative LEV pattern at the end of the day.
This is how the stock did later. It first bounced on the 50MA but this failed to attract buyers. The stock then broke through the 50MA and could now become a short candidate.
The Portfolio screen is shown below. There is a slightly higher probability of hitting the stops on some stocks, but nothing that requires modifying the existing positions.
I am a bit worried about SCCO, the copper miner. The FOMC bearish minutes (they often are) have pressured most miners and also commodities, such as copper.
SCCO is attracting money mainly because it is expected to receive an official approval for a new mine. If a non-insider like me knows this, it means that this "news" has already been baked into the price. Being worried is not a trading strategy, though, so I will keep the position for now, unless the EV pattern starts to show a different picture or the stop is hit. We are still in the stable buy zone (Low supply level) with an increasing EV pattern.
Below is the complete Long/Short list for today.
I highlighted in yellow the stocks I would be interested in for today. These are the high "hit" probability stocks. In addition, the long trades table contains very important information: most of the candidates are way overbought and so extended above their safe buy zone that it is a sign of a market whose strongest stocks cannot be safely bought here.
You can see for example that strong stocks such as CSIQ and FEYE -- even if we reach the buy point today, which is almost impossible -- should be limited in position size to only 1/4 of a normal position, and even then the probability of losing 5% in the next five days is above 40%. Who wants to invest with these odds?
Even XONE and SPWR show that we can only invest 30% of a normal position and we have a 30% probability of losing 5% in the next five days.
The only long stock I would be interested today is ICE.