Trading for Dummies, Q&A #64

Skyworks Solutions, 30-minute Chart

Questions:

1) Why would you be paying attention to this stock on Friday, October 31?
2) Is the trend up or down? Would you be looking to get long or short this stock?
3) Where would you get long/short this stock on Friday, October 31?
4) Where would you put the initial protective stop?
5) When would you stop trading for the day?
6) Where would you exit the position?

Answers:

1) Because it was unusually active, and very volatile.
2) Down. You'd be looking short.
3) Short at 8.69 on a sell stop below the 10:30 inside bar.
4) Initial Protective Stop: 8.86. (max. 1.92%)
5) Right after you enter the position or lunchtime, whichever comes first.
6) End of day. Could cover half, carry half, or just close it all at once.

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SWKS opened dramatically lower which is something I usually avoid fooling with since price can snap back violently. Price didn't snap back and though I didn't get stopped out, this wasn't a very successful trade. The stock closed at $8.56 which gave a piddling 1.5% gain from entry, which didn't even cover the initial risk of the position. Nevertheless, every trade you play "correctly" is a winner, no matter if you make or lose money.

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Screen capture of my intraday Watch List:

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