0-100mph - Trying to go from newbie to a pro ...

Still paper trading my system.

Timing is alot tougher than I thought. Buying to early is like trying to catch a falling dagger. Waiting until the trend turns causes me to set my stops to wide or for my limit orders not get hit (since the price usually doesnt swing back down to my price, so I end up watching a missed rally time after time).

I'm still trying to find a reasonable entry time so I'm not fully exposed. I know when I should get into a trade, but I seem to be switching in between other stocks many times when I should be getting into the main 2 stocks I care about. Definitely more work to do !
 
Quote from zanek:

Still paper trading my system.

Timing is alot tougher than I thought. Buying to early is like trying to catch a falling dagger. Waiting until the trend turns causes me to set my stops to wide or for my limit orders not get hit (since the price usually doesnt swing back down to my price, so I end up watching a missed rally time after time).

I'm still trying to find a reasonable entry time so I'm not fully exposed. I know when I should get into a trade, but I seem to be switching in between other stocks many times when I should be getting into the main 2 stocks I care about. Definitely more work to do !
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This is a very tough system to time correctly. When I was a complete beginner I traded this style and though it was very net profitable, I occasionally ended up in a losing position and once held up to 2 weeks waiting for it to turn green. (I had no idea what a "stop" was back then.)

During a bull run, it works well because the market exuberance induces retracement in all but the worst cases (such as fundamentally awful news like SQNM mishandling data). But once a bull run tops or reverses it becomes a trickier and more dangerous game in which the market can be very unforgiving (RIMM and STEC are recent examples).

I recommend waiting for established retest of the pivot low for the second bounce. The panic sellers at that point have generally washed out. Even if a lower low is established it's usually not too far from the first, and you should get a decent bounce.

Some things to keep in mind:

A falling knife usually falls much further than you imagine, so scaling in on the way down can be very dangerous

If a hammer is left behind at the end of a full 2- or 3-minute bar, chances of a profitable upside scalp are very high.

Price almost always retests the pivot low after a 10-50% retracement of the dollar amount of the drop.

If a strong stock in a sector is dragged down by bad news affecting only one player, it's a very high probability swing trade to the upside.

I haven't traded this style for a long time, but I know from experience it can be really profitable in a conducive market environment. This toppy market is not real conducive to this style except for day trades.

I traded the opposite style starting in December 2008 (shorting high flyers) because of the bear market and it was my bread and butter during the first quarter this year.
 
Still paper trading my system. I am getting progressively better at it.

I realized that one big hurdle that I'm still trying to overcome is trading what is happening in front of me, and not trading what I think will happen.

Reprogramming myself is definitely a challenge. I think most ppl constantly are thinking stock x is going up/down today, but I've been trying a number of exercises to eliminate any thoughts about where I think a stock is going and only trading the signals in front of me.

@NoDoji: Thanks for the advice, I've been using the retesting points and its been working out well. I miss some opportunities, but its better than chasing.
 
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