My entry point
Had TTD on my watch list for a longer time since it was forming a nice cup-and-handle pattern with solid fundamentals to support the price action.
I wasn’t in an aggresive trading mode because of the overall market struggles we’ve had lately.
Causing me to trade TDD cautiously as well. Eventually that made me being late in the stock and missing the gap-up it had.
I set up my trade plan after the gap up to see how it would hold up and get ready for continuation to higher levels.
My pivot point at this moment was $200.15 as the high of the gap-up day.
The first days after the gap-up it traded sideways. Followed by some profit taking from early holders as expected.
Then it started getting back up with a big day on Friday 8th of March.
For me a signal that the interest was still there. And because it happened on a Friday it is likely that a more buyers will come in on Monday after having done their weekend homework.
On Monday the 11th I bought TTD at $200.25 just above the pivot price I had set for myself.
Because it already had a big gap up and there might still be a lot of owners that are looking to take profits I set my stop loss at 5% below my entry price.
Getting stopped out
After 7 days of mainly sideways action an no real movement in the stock it finally started moving on the 21st of March with a +3.7% day on slight increase of volume.
It seemed like a cautious confirmation my trade would be going in the right direction.
Unfortunately it reversed almost 5% lower the next day on more volume.
For me red signal but I was still confident it could go in the right direction so no action taken yet.
Again this was on a Friday which could have given me a signal to close my position just before the weekend.
But decided to hold on to it and give it some room to set up properly.
On Monday $TTD gapped down on higher volume.
My initial stop price was hit and my position closed with an 1R loss.
On the next day $TDD lost another 5.13% on lots of volume.
Probably a lot of holders were getting out taking their profits from the gap-up before it would all go away.
For me it was a confimation that closing my position was the right thing to do. And I followed my trading plan perfectly.
So even though it was a small loss for my account, I’m still happy with the way I executed this trade.
Perfect trade analysis
So what can I learn from this trade other than that I did follow my plan.
First thing is that I was too late getting in the stock and missed the gap-up.
But if I had held the same pivot point for me than I would never have held on to my full position going into eanings which caused the gap.
Simply because I would not have enough room as a cushion to protect any downside on the earnings report.
Second thing that I could have done different was being more aggresive an looking for an earlier entry in the stock.
That aggresive entry point would have been on Februari 4th when it broke a resistance price from December 3rd.
The pivot price would than be $149.10 which would have given me some more room into the earnings report.
Although the last two day before reporting it traded back down around that pivot area which would have been a sign for me to close my position just before earnings as well.
So following my own trading plan I would probably not have been able to trade The Trade Desk any better than I currently did.