{+++}
I wanted to do a video on this but I am in the office and my microphone is home. I received some e-mails regarding some trigger situation and it warrants some explanation on my part.
As you know I discourage you from chasing shorts and longs at the opening. I suggest you wait for a better level and you might miss it but who cares because we always have another ideas.
There was some confusion yesterday regarding how to play X (US STEEL). The stock gapped down through the trigger and we avoided. Good. Some one asked me later in the day on the chat if they should short as it was getting close to the trigger price. My answer was sort of this, “I’m thinking more LONG here and if you must short it use dramatically smaller positions because I was afraid of a bullish reversal”
The market is never black and white and often very gray and I realize that some of you newer traders rely on me, and the levels on the P&L to make your final determination on a trade. That’s great, I want you too and honestly I feel if you fail I fail so we’re in this together.
98% of the time those triggers are reliable as I spend hours trying to find good levels. There is however an element of feel. What do I mean? Using yesterday’s X trade as an example, the stock was rising aggressively as there was a full and powerful bullish reversal rally underway. I don’t care what the trigger is, we don’t want to be short a bull run, just like we don’t want to be long and catch falling knives in a falling market.
I realize that I have advised to wait for a slight rally if we have short idea, but a massive reversal (like yesterday) should never be shorted.
Same goes for longs, if the market is imploding, stay away, if the worse thing that happens is that you miss a trade who cares? There are others.
I didn’t trigger POT yesterday either because like X, the same thing happened.
I will do a video this week to address this further. Hope it helps and sorry from my end for confusion.