Saturday, October 21, 2006

Real Trades Week 1

Yes, there are some posts that I owe you, but I thought you might be interested in how trading went my first week. In short: Ouch! I entered and exited 6 straight losers! Yes, you heard that right, after all the practice, all the effort you know I put in, last week cost me some money.

Bad news, I know; trust me, I felt that. I have found that most of the trades could have been avoided, but they weren't an embarrassment, they just were less than ideal. I entered pretty much all of these on the day of using an hourly intraday chart. It's a good tactic to reduce risk & increase reward, but I was getting better trades from the more pure daily entry model so I'm going to be a bit more judicious when entering these sorts of positions on the intraday. It's not as if I was chasing these stocks, the entry wasn't bad, the setups weren't bad (save for a couple described below), but the trades, never-the-less did not work for me.

It's an odds based business and there's no reason to micro-manage each individual trade. These hurt, but they're part of the game. So I'm feeling slightly discouraged today, but that's no reason to abandon my trading plan, nor ignore or deny the skills I've been working so hard to acquire over the past 5 months. I am looking forward to breaking this perfect streak next week.

Here's the quick list of what happened:
Stock, Long/Short, Entry Date, Entry Price, Exit Date, Exit Price, Comments
  • NYX, L, 10/17, $74.01, 10/17, $73.12, This could have been avoided by waiting for upward movement. There was a gap up, in the desired direction, but that's not a good reason to jump in. I now have a rule to wait for a Higher Swing Low if I see a similar gap. This could have been avoided based on this simple rule.
  • PEG, S, 10/17, $60.70, 10/18, $60.98, Put in a Lower Swing High, and I jumped in on the intraday (hourly) and initially it looked good. Here's where the daily entry would have kept me out of this loss.
  • UNT, S, 10/18, $45.19, 10/19, $45.80, Jumped in on another Lower Swing High on the intraday (hourly) but it faked me out and found support where it found it before.
  • GRP, S, 10/18, $37.33, 10/19, $38.14, Entry was another intraday Lower Swing High (hourly), which initially looked good. Honestly this wasn't a bad entry, but I don't particularly like the range of the trading days relative to the direction. Looking at it now makes me think: I don't like the way this chart is looking at me.
  • LYO, L, 10/19, $26.08, 10/19, $25.94, Took the gap down entry, which initially looked brilliant, but very soon after fell enough to trigger my stop. Not a bad idea, just didn't go this time. Good news is the stop kept me from losing more as it's still trading lower today.
  • ABT, S, 10/19, $47.82, 10/19, $47.83, I was looking for entry on the reversal pattern, but didn't see it happen. My entry was aggressive based on the up-gap. Once again, not a bad idea, however being more judicious about the intraday entry, especially on a potentially new direction seems appropriate.
Did I say that would be a quick list? The great thing about trades that don't work is you get to learn something from them almost every time. Of course hindsight is 20/20, and what may seem obvious today certainly wasn't as obvious then; based on the available information & charts at time of entry there are a couple that I could have avoided. You may have noticed that I was favoring the bear side of the market, and that's against the general market direction. It's not that I didn't factor that in, it's just that these individual stocks looked like good opportunities on the short side. I'm making some small adjustments and next week will be better.

Yes, you're right, I'm going to have to learn how to be brief if I'm going to have time for this blog!

4 comments:

Trader Charlie said...

Taocode, if it's any consolation, I thought I felt dumb for being in a losing trade during a bull run, but such is trading. Finding certain setups didn't come easy for me either this past week, since we're in earnings season.

Trader Taocode said...

Yes, it is some consolation. I can't help but feel a bit silly to have as much knowledge (sure, I'm light on experience) and to be a reasoning, rational, realistic Trader and to know that my cat (Wannabe) could probably choose a stock by scratching the newspaper, enter the trade and make money. I will say that today is already looking much better and I was able to take some profits from the one trade that survived last week's bloodbath :).

Anonymous said...

Hi Mark,
Have you seen the website swing-trade-stocks.com ?

My trading has improved greatly by implementing his strategies. It truly works, I have profited over $1000.00 so far. No strategy is fool proof they say but this one is quite amazing.

I took the TMTT 3 day seminar but didn't take the courses. I loved the seminar just couldn't handle the price of the courses.

Thank you for sharing your experiences and for your honesty. I have been reading your blog from the beginning. I wish you the best!

Trader Charlie said...

Anonymous,

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