Anatomy of a failed trade

Tums · Feb 15, 2008

Quote from omegapoint:

I buy 100 DRYS @84.16 trying to catch the falling knife.

jjk2 · Feb 15, 2008

Quote from omegapoint:

I buy 100 DRYS @84.16 trying to catch the falling knife. Look at the recent history, its pulled back about the same from its ascension how many times, thought it was reasonable. I sell @ 82 since ...it ain't comin back and it didn't now around 1:30 its @ 80.40 and tanking. Opinions on where I screwed up.
Before the days over it'll beat my basis ...with my luck.
thanks

hindsight makes everyones a genius.

why do we always need to find an explanation for good and bad trades? has it ever occured that it might be simply unlucky turn of events from a random happening? reading books on how-i-made-millions-buying-pullback is just self fulfilling act, very much is what infests the area of technical analysis.

Ofcourse, i am assuming the person usually knows what they are doing (wheres your stops?) and doesn't get some weirdo pleasure out of self-inflicted financial scars, where you purposefully like to take wrong trades..

omegapoint · Feb 15, 2008

You convinced me. I"m not going to try and self impose stops anymore. The psychology over yourself seems to play a big
part in this. YOu don't believe it untill you start trading and it bites you in the ass enough times to jolt you out of your ego imposed belief that you can handle it w/o the discipline the stop gives you. It took alot of losses to change ...thanks. YOU may be right about me enjoying "financial scaring myself" ...its just so
far under my radar ...possibly that I haven't made peace with it untill now. thanks for the wisdom people. enjoy the weekend.

robbie380 · Feb 15, 2008

Quote from omegapoint:

I buy 100 DRYS @84.16 trying to catch the falling knife. Look at the recent history, its pulled back about the same from its ascension how many times, thought it was reasonable. I sell @ 82 since ...it ain't comin back and it didn't now around 1:30 its @ 80.40 and tanking. Opinions on where I screwed up.
Before the days over it'll beat my basis ...with my luck.
thanks

how do you think you screwed up? you took a shot and it failed. you were trying to use support from yesterday for the trade and it didn't work because of the earnings guidance that people weren't too happy with.

NY_HOOD · Feb 15, 2008

i call stocks like DRYS and YGE ,"FUCK YOU STOCKS". you just could'ntwin with them today. PCLN was the one to go with and use a stop.

musclemoney · Feb 15, 2008

Quote from lindq:

First, DRYS is a very volatile stock, and can hit you for a few points in minutes, as you discovered. So you really have to know your stuff to play with it.

Second, you bought into a gentle pullback from the recent high, which was today's open And you did it on a day with a very weak overall market. Ouch. Lucky you didn't get slaughtered.

I regularly buy pullbacks, but I look for a very sharp drop on strong volume on 5 min charts. Then I wait for a small confirmation off the bottom and jump on. I want to know that sellers have really caved, and the bottom is in. (As much as it is possible to know.) Then I use extremely tight stops in case I was wrong.

DRYS did not exhibit any of these characteristics. It wasn't a terrible setup, but not a high probability one, given the high this morning, and the weak overall market.

But don't feel bad. This was generally a very poor day for buying into any weakness. There were a few good trades near the open on bounces, but that's about it.

100% agreed! Good advice!

EMRGLOBAL · Feb 15, 2008

I took a look at the Chart.

First, the stock is a "VOLATILE STOCK" as one ET poster pointed. But those are the stocks you want to trade, if your a daytrader.

I looked at the 5 minuet, 15 and hour charts.

Seems that you did not pay attention to the volume that came in strong. Its been trending upwards But today seems like the volume was on the sell side.

I would have tried to buy it early, the first half hour or so of trading. However keeping the volume in mind, I would have reversed after a a point or two points against Me.

Based on the oder flow, and volume I would have carried the stock short into the close and over the weekend. ( I would ck news on it, which i have not.)

Seems a lot of volume came in today. Which should have signaled after your attempt to go long, that sellers were stronger.

But that is just part of trading. Nothing really wrong with you trying to get long. However, you may have been ignoring the sell side volume.

I do not trade this stock, so I have no idea how it moves, other than the q chart I pulled up.

musclemoney · Feb 15, 2008

Quote from EMRGLOBAL:

I took a look at the Chart.

First, the stock is a "VOLATILE STOCK" as one ET poster pointed. But those are the stocks you want to trade, if your a daytrader.

I looked at the 5 minuet, 15 and hour charts.

Seems that you did not pay attention to the volume that came in strong. Its been trending upwards But today seems like the volume was on the sell side.

I would have tried to buy it early, the first half hour or so of trading. However keeping the volume in mind, I would have reversed after a a point or two points against Me.

Based on the oder flow, and volume I would have carried the stock short into the close and over the weekend. ( I would ck news on it, which i have not.)

Seems a lot of volume came in today. Which should have signaled after your attempt to go long, that sellers were stronger.

But that is just part of trading. Nothing really wrong with you trying to get long. However, you may have been ignoring the sell side volume.

I do not trade this stock, so I have no idea how it moves, other than the q chart I pulled up.

Absolutely a volatile stock! Btw, what do yo think about Quintana Maritime- QMAR ?

robbie380 · Feb 15, 2008

Quote from musclemoney:

Absolutely a volatile stock! Btw, what do yo think about Quintana Maritime- QMAR ?

qmar got bought by exm so it will trade with that stock.

retire45 · Feb 15, 2008

Quote from omegapoint:

I buy 100 DRYS @84.16 trying to catch the falling knife. Look at the recent history, its pulled back about the same from its ascension how many times, thought it was reasonable. I sell @ 82 since ...it ain't comin back and it didn't now around 1:30 its @ 80.40 and tanking. Opinions on where I screwed up.
Before the days over it'll beat my basis ...with my luck.
thanks

1. Did you study a daily of DRYS?? The only trade long in the mid 80's area would have been a VERY brief long.. There is A LOT of resistance here.. plus DRYS has traveled quite a while from $50 to get here so a lot of energy spent. Too many Longs with profits waiting to sell to late-comers..

2. DRYS tends to do what it says.. Sticks to it's bars for the day.. Intra-day dip on White Bar? fish long.. Intra-day bounce on red bar? Short it.

3. Weak Markets today..

So combine all these and the odds were against you.. Trading is hard..