Trading Is Risky But Simple: How I had a massive green day in very uncertain market $AAPL $SBUX

Today was one of those days when I was in complete sinc with the market.

I had my bias for short, but I kept telling myself: "The move with the gap down is overextended, opening over -2.5 % in red all across the boards this short is not something I would want to chase...", and of course I twitted it here before the market open ; click here to see my twit. As you see from my twit. I was not going to enter any trades first 2 or 5 min which I normally always do, and I decided to wait longer till I pull the trigger. I wanted to read more what market was doing. Why ? Because I do not know anything till I actually see it. From my watch list and the plan I had, I was ideally expecting from the markets a nice move up. probably a gap up open after a nice +2% rally on Thursday so I can easily short my W/L symbols. See my plan here . However totally the opposite happened.
I know reading books will not make you a successful trader , but reading the thoughts REAL TIME from trader who makes money is the closest reality that you may get.

AAPL was the stock I decided to totally focus on, simply because of its liquidity, and because when all of my items from my W/L did not do what I was looking for (explained in my previous post W/L for Jan 15 click here again ) I would rather trade the stock with well know and predictable behavior.

What did I see in AAPL ?
She was gaping down together with all the broader markets opening down over 2.5% in red.
So the bias is short but this is scenario when I will not trade the strategy of building my short position as it goes against me. Building position works well for me when stock is well overextended and/or when it has a well defined overhead strong resistance ( speaking of Big Board stocks with mega float !!.. not KBIO or those penny low floaters that may give great % returns on small acct but also can annihilate ANY SIZE acct ). Today I was not going to use the building position simply because after gaping 2% down, a bounce or a squeeze may easily happen !!! If I am building into the squeeze, after such daily oversold levels I may blow up a lot of money , because the squeeze may be severe. It has been buy the dips all year long and I can not possibly know if the big balers may start buying this dip again .

AAPL the visualized plan as twitted here real time ! Not in a hindsight !

The entry at 97.00ish was well planed with a risk 97.30/50ish

Now, since I already knew I will not build my position, I was able to size in pretty big , by having a well defined risk . I was gonna lose $1,000 to $1,500.00 on my 3,000 shares position that I got filled mostly at the ASK as I was adding liquidity.

The greatest thing about AAPL is that it trades so well even when choppy. Seeing the SPYs making higher lows kept me doubting if AAPL will actually crash to lower levels. Here it is: SPY at the same time when I shorted AAPL.

SPY do you see the higher lows after 2.5 % gap down?

Would you short this?

Would you be very cautious shorting AAPL ? You better be ! SO there it was my tight stop that would not be a build up, on large size.

So I kept watching AAPL very closely, the time n sales, the Level 2 and was scalping the 10 to 15c moves for a quite a bit around the core short position, expecting to squeeze, so the majority of my gains came from the channel scalping before it even gave the move down ! Yes ! Before it even dropped lower , all thanx to the SPY making higher lows and telling me: "Hey take every profit on AAPL short , caus I may take it higher from here, I may squeeze you big time tough guy "... And that is exactly what I did : I did what market was telling me to do , not what I was wanting, or thinking, or expecting. Also twitted here real time. It was me trading at my highest zone level I could possibly be. And this does not come from reading a book. It comes from years of trading, losing, journaling my trades , from lot of pain and suffering.

AAPLfinaly taking the drop

Then I decided to add more size on the expected follow through drop bellow 96.00 level and also twitted here real time how I will do it. It is very simple chart pattern , watching the 5 min frame having a very narrow candles that if broken down may nicely continue at lower levels, or if broken up would close my short for fat gains. Being already deep in the house money including the gains I made scalping AAPL while SPY was making the higher lows , plus having a solid core position from 97.00

level making a whole $1.00 in gains made me ....hmm ...feel good...like Philippe Petit felt on the wire between the twin towers in 1975. Recently seen movie "The Walk" trayler click here a must see motivational true story

AAPL twitted the plan here how to increase size using house money.

It is a simple 5 min candle pattern of taking the low with very limited risk above the same candle.

How often does this work? I'd say 50/50 . The reason it is still profitable, is because the narrow candles are so narrow , that the loss is limited just to the range of that narrow 5 min candle. This time it did not work I got stopped out and exited my full AAPL position, with nice gains after all.

After I got stopped out I re-enter again short for the last time from the intraday resistance as shown here :

AAPL the last short and covering partials...

Last cover was at the engulfing 5 min green candle showing strength after AAPL was now being in very oversold territory locking the final pretty fat gain ( for me was a big gain, but maybe it is peanuts for Tim Sykes who knows ?!?)

The hand written red line was my opinion that AAPL may keep falling. At times is very hard to ignore my opinion, and it is hard to do the right thing when in a trade. Doing the right thing is to follow the price action, and to listen what market is telling you, And the market said it very clearly to exit AAPL after the reason to stay short, seized to exist: the large engulfing candle to the upside , after which AAPL went up.

And here is picture perfect SBUX short trade with trailing stop using lower lows.