Able to recognize good trading Opportunities....

JamesEM

JamesEM

Hi all:) ,

I'm new to the world of trading...started learning last August. I've been trading regularly since January now, with a $6k account. I've read alot of books...started out with a seminar...

My problem is, I seem to recognize lots of good opportunities- evident to me by looking back over my Telechart notes- I'm even in many of those opportunities, but I seem to be stuck at break even point...after 4 months!

I don't let losses run, I have strict rules as to how much I risk, position sizing etc but my largest win has been only about $200. I don't know if it's my account size or, more likely, something psychological...

To summarize, if you looked at my notes, you'd expect me to be a profitable trader...which I'm not.

Any advice?
 
(1) Part of "it" is your account size and psychological factors. With a $6,000 account, you're badly constrained as to what you can trade without overcommitting to one position. If you buy 100 shares of a $30 stock or a one-lot of eMini S&P, it becomes tough to add-on any other positions. (2) You mentioned being able to control losses and your biggest profit is $200 on one trade. I get the idea that you're time horizon is very short-term with that profit and loss profile. That's okay. The problem becomes you'll have to work a lot harder to grind out consistent profit if you don't have a means of extending your time horizon in order to earn larger gains. You'll always be gripped by the fear of loss and the fear of a profitable trade turning into a loss where you are now. Another way of looking at it.........you'll eat like a bird and defecate like a bird and continue to be a small bird. (3) Rigorously quantify what these "opportunities" look like that you claim to see. Chances are that not as good as they appear. (4) Focus more on "trending" markets so you can get on board a trade and let it move your way without trading too actively around it. I hope some of that helps.
 
James, what are you paying for commission?

Paying $10 / trade to trade 100 shares or so is killer.

Consider IB, $1 / trade for up to 200 shares.

I felt the pain of $10 commissions when every trade I made involved $20K of leverage.

If you switch to IB, don't ACATS anything other then cash and stock, the best way to do it is just transferring cash.

Let's say you made 20 trades in the 4 months, if you overpay $9 / trade, that's $180 profit you could've had.

If you want to trade such a small account, you ABSOLUTELY need rock bottom commissions.
 
Quote from JamesEM:
I don't let losses run
More...
Ahhh - obviously a good trait but do you let your winners run? Sounds like you're letting fear grab you soon after your position starts to turn a profit.
 
"but I seem to be stuck at break even point...after 4 months!"

Market has basically been going up since you have started trading, if your even and the market has been going up something is not working as well as you think.

Imo, if your plan is to continue to trade your way to some break through ephipany, I don't see that happening.

Sounds like you have absorbed alot of information in a short time, this information needs to be internalized which came only come from more thought and a "Break" from trading.

Regards and good luck
 
Quote from nazzdack:

(3) Rigorously quantify what these "opportunities" look like that you claim to see. Chances are that not as good as they appear.

Thanks alot for your comments. Most of it rings true. The only part I'd have to disagree with is the above statement- I've spotted many excellent trading opportunities....trades that would have gone on to make 10%-50% in days and weeks. I just always find reasons not to trade them...one example is WHQ. I wrote, " Watch for break with vol." on 20th April, referring to the resistance at $50 which had been tested twice during the past few months. On 26th April it broke with decent volume compared to the past few days but I talked myself out of the trade because I felt the vol. wasn't convincing enough and that it may pullback to test the trendline. It's gone on to gain almost 20% in just over two weeks...

I can recognize good opportunities, I'm just not good at getting into them (goes back to your comments about fear I guess)

Thanks again.
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Quote from demoship:

James, what are you paying for commission?

Paying $10 / trade to trade 100 shares or so is killer.

:D In that case, I've been murdered because I pay between $12.95 and $15.95 per trade (Market and Limit orders respectively) The course suggested treating yourself as "an A-Business" by paying for quality. Are you with IB? If your are, do you find that you are compromising in any way as far as general execution and trading is concerned?? How much do you pay above 200 shares??

Thanks for your comments.

P.S I don't understand that stuff about ACATS...what does that stand for??
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Quote from RL8093:

Ahhh - obviously a good trait but do you let your winners run? Sounds like you're letting fear grab you soon after your position starts to turn a profit.
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Sounds familiar...I do try, but I always move my stop after I get into a position of having $100 profit...then I usually get stopped out prematurely...
 
Quote from nutmeg:

"but I seem to be stuck at break even point...after 4 months!"

Market has basically been going up since you have started trading, if your even and the market has been going up something is not working as well as you think.

:) Yeah I know...that's why I'm asking for the advice. I am making money though...enough to cover my commisions (Which I'm learning are extortionate!) Currently making $30 more on winning trades than I'm losing on the losers....

You're advice about taking a break seems logical, if difficult because I'm eager to succeed...I've scaled down my trading. I don't trade just because I have the buying power any more...I try to wait for the highest probability trades.
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You should be lucky u r are brake eve and u have not blow and got busted with your account
You see to be doing preety good
Hang in there and see what mistake,s u r making and try to improve them.
Wehn i started trading i was up like $500 in a week and then the next day i started playing with 1000 share os this and that and i blew it
Hang in there Strong if you have a will
 
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