Today I did not take a trade because the set-up was not perfect. There were some variables I was just unsure about. The open sat right on support and I was not used to that. Usually it drops to support before the reversal. I was also a little uncomfortable with the Average Daily Volume even though the last few days was strong. Either ways I learned more about my favourite set-up and it re-emphasized the power of the set up and how it worked even though the conditions were not perfect.
I am still sticking to the less I trade, the more gains i’ll make mentality.
I just had a bit of an Epiphany while in the shower. Cliche? Yeah maybe but suck it up. I am simply not going to play set-ups that I have not tracked anymore.
That sounds simple and easy but somewhere somehow after dropping the whole momo stuff I started off with in the beginning, I got back to trading on a whiff. Going to start a fresh excel sheet and find a way to capitalise on the gap-ups. There is opportunity but I need to find a set-up that shows consistency. However long that takes, I am not going to make a single trade until that happens.
Cheers, I hope this would then give me some more opp other than the rare bottom bounces that I feel I am getting a little hang off.
Hurray! There goes my Sunday 😉
So today I tried this dip-up strategy again I was kind of eyeing. I cannot deny that I am in a bit of a trading rut. In the last 10 trades I have had 20% accuracy, which is pretty disgusting.
However, there were a couple of things I did correctly today. I put orders at target entry points and waited for the stock to hit there. It felt way more controlled and calming and I think I will employ this for my bottom bounce strategy if it comes by. Secondly, I also managed my loss super well because I was in with manageable size. When the stock washed hard I waited for a bounce as you can see in the second trade. They were both the same strategy and hence I put it as the same trade. I figured by timing was off on the first try.
Either ways, I need to commit myself to taking only set-ups I have tracked. This one felt like something I saw worked 2-4 times and assumed it was the norm. I really got to stop doing that though.
On the other side of things, ever since I got back I realised I have lost about USD $280 but only USD $30 before commissions. This speaks volumes. MY accuracy has not been up to standard but it does show that my winners are quite strong and an average win is significantly more than a loss. Now I just to work on making em more consistent.
So I have not been around for a while. Many reasons but mostly because I needed to regroup my thoughts. Admitting that I had failed on the first try was tough. I knew it was a possibility but its something you only can feel and overcome once you reach there. I had about 900 left in my account or thereabouts. I had three choices:
- Fight till the last dollar
- Top up
- Give up
Choice 3 was quickly out of the question. It was at most a passing thought. Throughout this whole journey, I had loved every step of the way. I paid a tuition for that education for sure but I knew it was just not my time yet. Fighting till the last dollar felt like i was being desperate and using terrible economics. Opportunity costs started to increase as there were many trades I had to forgo and many that I could not take the correct size on. So what did I do? I took choice number two. I topped up. But this time I knew I had to change something. That was back to the books.
I created excel models and filled my spreadsheets with values. I knew I had to take on a very analytical approach and focus on three main things.
Am I done researching those things? NO. I still need time before I can say properly that I am fully back in the markets. Will I ever be done researching? Probably not, but I do need a threshold amount of data points for my analysis to be even mildly significant. Hence time. So I will be back!
So I have not been around for a while. I have a few reasons for that. The last time I was here I got punched in the gut twice by 3 consecutive loses. This sent my account to the gutter and today I am actually slightly under a grand on my account. It renders a lot of my strategies useless and put me in a tricky spot. Do I accept defeat and top up my account or fight till the last dollar?
Well, I took what I believe to be an in between solution. I decided to start collecting more data on this reversal set-up. It seems like something I could deal with. Having said that, I also decided to top up my account to round about 3 – 3.2 grand so I get a fighting chance again.
I kinda knew I might have to deal with this day since I started. But hey, I think I am being smart here and not just waiting for a blow up before I top up.
SPWH – One of the best trades I have made in a while. Risk management was great. I did not get my full size as it ran a little at my buy point but i did not chase. I recognized this stock was a grinder and did not get shaken out when I was red on it for a while. Got 12 cents on it and that was decent for a Momo play. It was a good trade overall. Was a little bummed out that I did not get my full size. Also a tad or two longer I possibly could have gotten 22 cents on it instead. Well thats always tricky to smack the top.
I will start off my blog right in the middle of where I am at right now in my journey. When to get out of a trade?
- The set-up I am in the trade for does not exist anymore
- When my max loss has been hit
- When there is a huge amount of sellers absorbing volume slowly
Only when I hit my profit target (Not letting your trade ride out prevents you from having those big winners and letting it ride beyond your target is what makes winners become losers) Take profits into strength when going long and vice versa for going short.
- When a key level in the chart pattern, that I was playing off, has been broken.
4 5 simple golden rules of getting your ass outta trouble. Much harder than it seems. Really.
As a student of trading, I am allowed to add to my rules along the way. Looks like it became 5 rules now. Edited: 10 July 2017.