BBY into the close

I am glad I traded this afternoon as I was reminded of another lesson. When you get in or out of a position you need the market to tell you it is time to get in or out. What do I mean? Lets take BBY for example I made a trade highlighted in the chart above it was having trouble get above 38.50 so I went low offer and got short 200 shares at 38.49 with a .02 stop. On the chart the 37.95-38 looked like it could be support. So their could be potentially .50 of profit in this trade and maybe even an opportunity to flip the position. I covered at 38.42! Why? I am asking myself the same question. There was nothing that had changed in the stock, the S&P was pulling back pretty stongly after making new highs, this thing just failed for the third time at Resistance at 38.50 and the stock was already weak off the back of its earnings today. These were all checks in my favor. And all reasons why I should had been holding the position. You may say that it was profitalbe and it was, but the easy money was only a few ticks away. With all these "checks" in my favor I really should had held this position until the market gave me a reason to sell and support at 38 would had been such a reason among others.

Now back to why this happened. It is because I did not formulate a complete detailed plan. I new that the stock was weak and that there was resistance at 38.50 and that I wanted to get short, and I had an exit/risk identified of .02. The piece I was missing is where I would get out if this thing traded in my favor. Above I mentioned the 38 level, but to to be honest that was not part of my trade analysis when I entered the trade. So this just reiterates the importance of having a detailed trading plan for every trade. And more importantly you need to have a exit for both when it trades against you and in your favor. It could be the difference of making .07/share or .50/share.

Also wanted to mention the strength I saw into the close off of the 38 level in BBY. I will look at this stock first thing in the morning to see if this is going to remain an important level. For now this will be one of my trade ideas into tomorrows open. Also going to keep SVA on my radar, Daily still looks great.