Not long after the market open today (2/12/2010), I got a call and had to run a few errands. So I was not able to trade until the noon. My pre-market analysis suggested “short”. Naturally all my attempts today were biased toward shorting.
I never chase hot stocks. When I have selected a few targets, I trade them repeatedly throughout the day. AFLAC Incorporated (afl) was my target because it was weak all day long and it has a decent beta of 1.77. After I chose my target, I started to follow it closely.
So a short opportunity presented itself around 12:35 because it was very close to the morning gap. A gap normally has a strong resistance/support. So I shorted it at 46.85. The entry was perfect. It never churned. I set the stop at 46.97 and went to nap. As we can see the chart below, it went down to 46.41, which showed a decent paper profit of 200 bucks. I am normally content with anything over 150 dollars per trade, which flips on my profit taking switch.
But I was napping. So when I woke up around 2, it almost bounced back to where my entry was. So I just moved my stop loss to break even and forgot all about it. Naturally, it was a flat trade. Actually, I lost 16 bucks, which was the commission for that round trip trade. I would have moved my stop loss to the horizontal line if I had not napped. Nevertheless, napping is part of my trading plan.
You can see the timeline of all my day trades here
Click on the image to have a better view
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