best-laid plans...


I had a plan for Friday! GET STUFF DONE! Thanks to our crappy weather and a winter that never seemed to end, my endless procrastination on anything not day trading related and last weekend’s getaway with the wife (see photo), I am like a month behind on Spring cleaning and projects around my place. Friday I was going stop trading at lunch and jump right in. I figured between Friday afternoon and all weekend I could really make a dent in my to-do list.

Then OMER happened…

Before the open, I called out OMER as my favorite “sleeper” play of the day to keep a close eye on. OMER and I have a bit of a relationship. The stock, WHEN IN PLAY, often is a great “super-duper clean” Inflection Point trader and I’ve made some really good $ trading it. Click HERE to read and watch and old post about it. That post was from August of last year. Talk about an A+ setup that continues to work. Sleeper play, earnings the night before… Seriously, if you like this setup, read this blog and then go watch the video again and compare what happened in August versus Friday.

The market opens, and OMER looks like crap. It’s not clean and there’s ZERO edge for me in Level2, so I just move on. It met ZERO of my parameters for an A+ Setup. I kept looking at it from time to time, but it continued to look like crap. I left it on a chart but I wasn’t really watching it. Level2 was just way too sloppy, again ZERO edge. So much for my favorite sleeper pick of the day!

Then I see this post in chat:

I pull it up on level2, and it was still way too sloppy. I remember thinking to myself I can’t believe how freakin’ sloppy this thing is, what a disappointment.

About 18 minutes later I see this post in chat:

I pull it up on level2 AGAIN...

Real quick, this is why I LOVE Mike’s chat room and why I think Day Trading IS A TEAM sport. You can’t possibly watch everything alone. You need more sets of eyes, especially when those eyes are looking for similar setups. Anyway, the point of this blog isn’t to talk about how great Mike’s chat room is, but IT IS THE BEST DAY TRADING FAMILY ON THE PLANET.

Back to OMER:

For the first time all day, it’s not only clean but super-duper clean. I see a crystal-clear edge. I see an A+ Setup. In fact, I see MY #1 A+ Setup that’s working well in the current market environment. Here’s what that looked like and note this is about an hour later:

What happened? We nailed it. It quickly ran to $20. Note: When it got to $20 there was a clean seller too. If you want to see that trade play out, click HERE AFTER YOU FINISH READING and you can see the Game Tape. It's just the raw trade with no sound or narration.

Here's what that looked like and notice that $.50 move in less than 15 minutes:

Quick lesson here: when the data and information in front of you changes, you too must change. I HATED OMER early in the day. Pure slop. But things changed. So I changed. The same goes for the reverse. You can be in LOVE with a setup but if the information changes at the last minute and suddenly it’s not A+ and/or sloppy, then don’t take the trade. You must be nimble. And being nimble is different than hesitating. I had ZERO hesitation when OMER cleaned itself up.

Now back to my best-laid plans on taking Friday afternoon off and getting things done.

OMER was setting up AGAIN. This time over $20. Super-duper clean AGAIN! Clean chart and clean tape. I’m in love. I can’t leave my desk. I can’t miss OMER. In fact, I plan on buying MORE shares this time than $19.50 break. If we break $20 and take out all those sellers, I think a bunch the shorts will run for cover before the weekend and we could squeeze. The risk/reward on this setup was just way too good. The stock was trading great. Screw my plans and projects, I’m standing in front of my screens and watching OMER. I can’t miss it!

Well, guess what? I stood there ALL afternoon and it never triggered. It touched $20 a bunch of times, but it never even came close to taking out all the sellers. Damn it! I stood there all afternoon for nothing. The chart below shows how it ended the day and notice how many times it hit 20. Every time you see one of those arrows, my finger was on the buy button. I jokingly typed in chat Well, that’s an hour I’ll never get back. What a waste of time!?

I don’t think that way though. Standing there watching OMER was NOT a waste of time, rather it’s just part of the job. A huge part of being a consistently profitable Day Trader is doing nothing. It’s so freakin’ boring at times. You stand (notice I never say SIT and I technically stand and walk), wait and watch. Often what you want to happen never happens. It’s part of the job.

The larger point I wanted to make is about conviction and confidence in your process. I liked OMER over $20 so much that I threw my plans for the day out the window. I was NOT going to miss this trade. Now, understand IF OMER took out those sellers at $20, I had NO CLUE on what would have happened. It may have run a lousy dime. It may have gone up $1 as all the short ran for cover before the weekend. It may have triggered, gone up a few pennies and pulled the rug out and I could have lost $.30 per share on the trade. You NEVER know. You will never ever know…

However, based on my process, I saw an edge. An edge that is working well in the current market environment. An edge that has the potential to pay off. An edge that when I see it, I will push the buy button every single time. And I'll push it without hesitation but rather with confidence and conviction.

A consistently profitable Day Trader MUST have confidence and conviction in his/her process and A+ Setups and act accordingly EVERY SINGLE TIME they see one of their A+ Setups set up.

Oh, if you’re wondering how my to-do list is going this weekend, it’s not. I’m blaming the weather again. Besides, writing this blog and working on our next Jeopardy is way more fun.

Thanks for reading!

Questions? Comments? Reach out and/or leave a comment below.