I had a terrific gap trade yesterday in DIS that I wanted to post but ran out of time yesterday evening. After Wednesday’s huge sell off in the market, we had a much expected narrow range day in the QQQ. I found my play in DIS scanning for my gap plays 15 minutes before the market opens. DIS was gaping over $6.00 which I believed would cause enough shock to want to play DIS lower. I rated the gap in DIS as a Tier III gap which I usually play in the afternoon, but the only requirement is that I make sure that Tier III entries are true setups, no 5 minute high/short plays, preferably a PBS or PSS entry. I found myself entering on the first 1 minute PBS with a small lot size because I could see a much lower target of over $1 and I felt that the sell off in the Q’s was not over. After my entry short @ .40 price moved lower nicely for 10 minutes before pulling back into 9:50 am reversal time triggering a 2nd PSS where I went full share size on my short in DIS. Price moved painlessly lower hitting the prior pivot low where I covered 1/3rd of my shares. As price continued lower I began managing the play bar by bar on the 1 minute as price seemed to accelerate lower. Finally a small green bar appeared where I covered another 1/3rd @ .09. My plan was to keep 1/3rd on and add shares back to my short play in DIS and reduce my stop. Adding shares and reducing the stop can extend plays increasing profitability without increasing your initial risk. I soon found my add and reduce location as DIS triggered another 1 minute sell and again price flurried lower where I was able to offer shares out at .93, .90, and .89 cents. I still had a few shares short and had a 2nd opportunity to add and reduce but this time my stop was hit on my final shares and my play ended. Here is my chart on my very profitable play in DIS.
DIS 12122013
I took today off from trading since I had my weekly goal made yesterday. I’ve had only 1 losing day in 3 weeks of trading. I’d have to give credit to my being more patient and waiting for proper setups. Starting my plays out small and looking for 2nd signs of strength have helped me to “pin point” the “moments in time” that justify a full share size or what I like to call a “go all out play”. I like the way I’m trading now, my gut feeling is that It’s correct using the the method that I’ve chosen, It’s Pristine! Have a great weekend everyone…