BIDU Update

BIDU is an example of patience and letting the trade come to you rather than chasing it, as well as the power of phasing in to a trade, which MUST be distinguished between the horrible idea of dollar cost averaging. The difference is all in your trade plan, I purposefully phased in to BIDU with a large stop and smaller position size so I could add to BIDU, it was part of my trading plan before I ever executed a position. Dollar cost averaging, whether long or short i an emotional reaction to a position that is going against you and that i already outside of your risk management plan.

My BIDU position averaged is at a 9+% gain as of now, but if you have been following the trade idea, I expect a lot more. This is one to keep an eye on as it is still in long term good position and we may not get another chance to add on strength.

 The long term picture is that of a large triangle after an extended uptrend, these are almost never consolidations, but rather tops (or bottoms if the preceding trend was down). The daily 3C chart shows the long term distribution going on in BIDU previous to the triangle appearing.

 The trade plan was the same as usual, BIDU is in a top that should break down, wait for the head fake move to short in to strength, 3C confirmed we would see a head fake move breakout above the triangle and that it would be sold in to, the yellow area is where BIDU made the head fake move above the triangle-this is where we wanted to start shorting BIDU on strength-let the trade come to you.

 Near term BIDU has a gap and a short term positive divergence like the market, AAPL, ES nd a number of other risk assets, it wants to make a move higher although I very much doubt we will see the head fake area and probably more likely a gap fill and maybe some.

BIDU hourly shows the distribution in to the head fake move. I have room to add about 40% in BIDU and being I started the position higher, my last phase in is usually as the trade is confirmed to be moving in my direction on some short term strength, so if you have been following or phasing in to BIDU, any strength over the next day or so should be looked at as an opportunity to consider shorting or adding to BIDU. The larger trend's price pattern target implication is around the $70 area conservatively speaking, this can be leveraged up, here' an example from an article I wrote at Trade-Guild.net that is linked on the left side under "Resources and Concepts", you can make more than 100% in a short trade.

Keep BIDU on your radar.