Trade Review – Not Being Biased On $NVDA

 

Today, I’m starting a new series of blog posts. These ones are about the “behind the scenes” of my trading days. The main purpose is to present a trade as it unfolded and show exactly what made me enter the trade, together with detailed exit signals that suit my own style. Hopefully, this will help you better understanding what I do and can give you some ideas on how to improve your trading skills. In fact, looking at what other traders do is still for me a high valuable way to improve my own technique and skill set.

Let’s start. Every day, I invest about one hour and a half during pre-market just scanning the market in an attempt to hunt for ideas and build up a plan for being ready to execute it once the bell rings. In fact, a trade plan is as much important as its execution. So, given the latest turbulence from last Friday, I knew there was going to be some sort of volatility among tech stocks. That’s why I kept AAPL and NVDA on watch.

As soon as the market opened, I immediately recognized that there was still weakness spreading around the whole sector. In particular, AAPL started selling off and I decided not to chase an entry on it. NVDA, instead, sold off at first but a couple of minutes later got back up retesting highs and that’s where I became really interested on it. So, I decided to open a short position given the fact the profit / loss ratio would have been > than 2:1.

Here are the details about the trade:

 

 

Strategy: VWAP fade

Direction: Short

Entry: 145.00

Stop: 145.80 (hod)

Target: 142.80 (yesterday lows)

P/L ratio: 80c vs $2.20 (2.75 : 1)

Time in the trade: 30mins

 

As soon as I’ve opened the position, the trend continued lower and the price got closer to my target. So, I begin scaling out my original position when it broke $143. As expected, some serious support came into play at that level (it was a significant bottom yesterday). Finally, I exited the rest of my position when it came back down and it couldn’t break the lows. I ended up making $1.3 profit on average.

I thought that was a good trade but I thought this stock had much more volatility to offer in this market. Volume was really high and early price fluctuation strong enough to promise strong moves once a trend would have settled. Luckily enough, I had no strong bias on the trade and so, I was ready to catch the following opportunity once the technical were strong enough. The funny thing is, I had the same entry point as before when I got long into NVDA at $145.

Here is how the chart looked like when I’ve called the trade in chat-room:

 

 

Strategy: VWAP pop

Direction: Long

Entry: 145.00

Stop: 144 (loss of VWAP)

Target: 150 (next significant level)

P/L ratio: $1 vs $5 (5 : 1)

Time in the trade: 15mins

 Unfortunately, I got my first profit as soon as it broke $146 and I always readjust my stop to break / even. So, once the price got back to $145, I’ve closed my trade. Still a green trade that I can’t complain about but the exit point ($145 on the rest) ended up being the base for its run up to $150, that was the original target!

Overall, still a great day in the markets, locking up a solid profit within 45mins into the day. That’s what happens when relying on technicals only rather than being too much biased on a stock. The goal is always to respond to what is actually happening rather than what we’d like to see happening.

 

Trade safe,

 

Roberto Barbaro