I took today’s Fed Day as an opportunity to catch up on my sleep. These days are usually a churn before the statement comes out and not much really goes on so it’s not conducive to trading.

The Fed game plan I set up once I woke up was the if the announcement was positive I was going to go long FSLR and if it were negative I would go long SKF.

I wound up playing a nice bounce in FSLR and profited quite nicely.

Then came my GS play which turned out to be one big missed opportunity. It had pulled back to the 5MA (on the 5 minute chart)  and I went long at 200.04 only to watch the stock drop to 198 and bounce of its 50MA. At one point I was sitting on a $400 loss on this position and was glad to get out on a bounce to 199.50 for a small loss.

GS proceeded to rip to 205 (where it’s trading right now as I write this). In retro spect my mistake on this play was to play the bounce on the 5MA after such a quick spike up and the market still digesting the Fed news. Next time should I play something like this I should wait for a test of a greater Moving Average like the 20 or 50.

I also let the loss in GS scare me out of the turnaround bounce and I got out once I had a manageable loss not noticing that the market was starting to find a bid.

After getting out of GS and clearing my head I realized that the market was catching a bid and proceeded to go long AAPL which had a very similar chart to that of GS. Went long at 133.40 and sold at 134.00. There was really no reason for me to sell AAPL at 134 but I think psychologically I just wanted to book the gain to offset the GS loss. This kind of thinking ended up costing me as AAPL continued to rise.

Here at the trades:

Commission costs amounted to $42 so my profit was $523.68.

Now for the daily self-evaluation:

Pros:

1. Nice day money wise.
2. I took the loss on GS which is a positive in some sorts even though, had I waited, it wouldn’t have turned into a profit.
3. Took my original plan of not trading in the morning ahead of the Fed. Staying in a comfy bed certainly took away any temptation so I don’t know if I would have done that had I been in front of the computer.

Cons:

1. Let my GS loss get too big and thus causing me to sell even when the market and the stock proceeded to rip higher.
2. My AAPL trade seemed like a revenge trade to get my GS loss back and thus I didn’t maximize profits. Should have squeezed another $100 out of that one.
3. Fought the trend in FSLR (it was down quite a bit on the day when I went long).

I think the major takeaway I can take from today is the lesson of letting a stock test a greater level of support when the conditions are: a) a fairly big and quick spike up in the stock, and b) an overall market that is trying to digest a market moving news event. This makes sense because the 5MA on a 5 or 15 minute chart will be heavily weighted towards the spike in the near term whereas the 20MA or 50MA will give a more balanced picture.

Hope you all did well. See you tomorrow.