Stocks Trading Journal for Short on PFF
This Stocks Trading Journal is a review of a recent Short Swing Trade on PFF on the 60 minute time frame. On the 08 Feb 2018 we posted a Video in our Signals Membership for a potential Short Swing Trade on $PFF. The Video had quick analysis, Entry, Stop Loss and Target price for potential short Swing Trade. The original video can be viewed >>HERE<<
Our TradeTheFifth strategy involves trading the 5th Wave of the Elliott Wave sequence as it is the highest probability move in a “with trend” trade. The Wave 4 in this case pulled back and found initial resistance in the Amber Pullback zone. This indicates an 80% probability that the 5th Wave will go on and make a new low in this current bearish trend. The Pullback zones are part of our Elliott Wave Indicator Suite.
The original chart shown below shows the setup before the trade triggered when the trade was set up before the markets opened on the 8th Feb 2018. Short entry price of $36.96 with Stop Loss above the Wave 4 high at $37.18. Our automated 5th Wave Target level in Blue was around the $36.45 level for this short trade, giving a 1:2 Risk to Reward. Below this chart is how the trade went and chart showing exit through trade management as part of this stocks trading journal.
PFF Stocks Trading Journal – What Happened Next
The short swing trade moved through the entry level during the 2nd hour of the trading session on the 8th February. Then proceeded to move down and close near the low of the day. When markets are bearish like this and a short trade closes near the low. There is a high probability that the bearish momentum will continue into the next session. On the 9th February PFF gapped up slightly then sold off heavily in the first hour of the session.
A simple trade management strategy for this type of trade is to use trailing stops just above highs of the closing candle. The price got very close to our automated 5th wave target with a small Djoi candle during the 4th hour of the trading session. This was a sign of exhaustion and sticking to the trade management strategy, mentioned earlier, meant the trailing stop was taken out at $36.60. Giving a great 1.6% profit on the account balance, as per the chart below.