Day Trading - A successful method for losers

Status
Not open for further replies.
I Bought and Sold RMIX today for a profit, $112.

Trade:

Bought 1000 shares of RMIX @ $10.74
Sold 1000 shares of RMIX @ $10.83 (average)

commission: $20 total



Net profit so far today: (RMIX) $112 - (ENTG) $78 = $34

I was tempted to buy a couple of options on KLIC yesterday. That would have been a good purchase, seeing that the option would have gained over a 125% today.

Looks like the markets are again showing upward trending channels.
 

Attachments

Here's the stock list for tomorrow.

Today was disappointing. I picked up a couple of stocks. Both, were to me, flat bases. ENTG didn't thrill me with it's shape and overhead. RMIX on the other hand, looked like a stronger base. I decide to buy both if they broke out, ignoring that inner feeling I had about ENTG. I had already programmed my browser to buy 2000 shares of RMIX, so I then changed my settings to buy 1000 shares of ENTG because it became apparent that it would break out first - It did. As ENTG went against me, I decided to sell RMIX before it was ready, to counter the loss. Mistake upon Mistake.

With this method of trading, it is always better to wait for the stronger pattern. Today was proof of that. Had I'd been more disciplined, I would have ignored ENTG and waited for RMIX. Seeing that I originally had 2000 shares programmed for purchase and the fact that RMIX had climbed as high as 10% during the day, one can only imagine the potential for gain.

In the past I have listed stocks, both weak and strong, on the daily list. I will now try to look at only the strong stocks until my averages improve. I keep missing the big moves. In the past, I would catch most of the big move on a stock breaking out. I believe the reason for this was my stock selection. I was more selective than I am now. I'm hoping a move back to this method of trading will turn things around.

Good luck to all.
 

Attachments

SmashandGrab said:

With this method of trading, it is always better to wait for the stronger pattern...
...
In the past I have listed stocks, both weak and strong, on the daily list. I will now try to look at only the strong stocks until my averages improve...
More...
Smash,

To meet your goal of 2%/ week you really only need a few trades so why not always only focus on the ones that you perceive as strong. Part of your judgement on what "looks" stronger has to be relied upon unless you go completely mechanical. I would say you should only ever look at the "strong" stocks. Why ever bother with the weak ones?

So what if one of the weaklings launches without you? If you are decent at picking the strong stocks then that would be the exception rather than the rule. You can't be right 100% of the time. You may want to track the weak ones later at night or on the weekend to evaluate your piocking methods to see if your thoughts about "strong" and "weak" are panning out, but other than that I'd forget the weak ones.

One thing that reinforces this idea is that if you are up for the week, maybe 2% on your account. If you overtrade for some action you run the risk of not meeting your goal when you were already there in the first place on something that you guaged to be a weak bet. Why would you do that?

- ace
 
Alas Acesheet,

Once again you have overestimated my intelligence. Do you remember our conversation years ago - I'm an idiot and I can't help myself. I'll prove it to you...

"Lousy trade of the day":

Bought 1000 shares of HMT at $19.88
Sold 1000 shares of HMT at $19.81

with commission: $80 loss

reason for sale: stupidity, weak constitution, last of discipline, other derogatories I can't mention on this thread

I traded HMT today even though the volume was below the average daily. After I bought it, I placed a stop at $19.74 (1.4% stop loss based on intra-day support). I watched the stock go up to 19.93, then fall to 19.82. I watched it hover there for about an 1/2-1 hour. I felt that due to the volume dry-up at that time, it would be better to just sell it at that price, than to risk an exaggerated fall because of light volume. I think we've all seen this type of action before. The problem is, is that the fall never came (after I sold) and I watched the stock climb up to $20 right after I sold. I would have made my 1% had I been patient and disciplined and left the stop alone. So you see, my genius was surpassed by my stupidity.

Seriously though Ace, You hit the nail on the head. I am missing good by including the bad. I guess I'm still a "green" trader because I haven't had the willpower to leave the weak stocks behind. The fact is, is that this is what I MUST do in order to gain consistency.

This weekend I'm going to try to come up with a number of stocks that I will limit myself to per day (an arbitrary number - maybe 5). If I'm pairing down my list of 25 stocks per day down to 5, what I will be left with is the best/strongest (I think).

I'm still up about 4 1/2% for this year, so I am a little ahead of the game. If I mechanically force myself to trade only the best, I should be OK with maintaining the averages. The problem is forcing myself to not trade - to wait for the best to pop up, which usually happens once a week.
 
I've compiled my stock list for next week. I'm going to separate out of this list roughly 5 stocks to trade for Monday.

I'm also going to review my most recent trades to see where I can improve. I'm going to be focusing on the lack of discipline I exhibited this past week, where I went wrong, then form a plan to change the behavior or methodology.

Comments are always welcome.
 

Attachments

I completed my list for Monday. I have 7 stocks listed. I'm listing the symbols here: ALY DIET HYDL IDNX NUAN TELK TRAD

I also examined the markets. I believe we have quite a bit of upset potential if we clear the previous highs: NASDAQ/2332; S&P/1294. I projected what I thought were reasonable channels on both indexes and came up with the next near term high: NASDAQ/2380 and S&P/1315. I believe the time frame for this is before the end of February (closer to the middle).

Note here that we could also be at the top of a down sloping channel on both indexes. This seems quite pessimistic and unlikely due to the large increase in volume over the past couple of days while the indexes were rising, but stranger things have happened, so I'm not ready to ignore this possibility just yet.

Still trying to make sense of the previous trades. The problem I have with back testing and post analysis is that the charting programs I use don't allow me to look at intra-day (1 minute bars) action beyond the previous 5-10 days. With my method of trading, testing and analysis depend on viewing the 1 minute bar charts, so the screen dumps I've taken are all I have to work with - a bit limiting.
 
I went through my recent trades. I made an obvious discovery - I'm not following my trading plan.

The most glaring mistake is selling before my stop is hit or selling before support is broken.

Another problem is buying stocks that don't meet the trading plan. I have bought stocks that didn't meet the volume requirements at the time of purchase - big mistake. I have bought stocks based on intra-day gambles/long shots.

In the future, I'm going to exercise more discipline. Reflecting back on this analysis at critical times should convince me to stick with the plan.

One more thing - I also am considering holding overnight only when the market is firmly in an uptrend, end of day volume is huge (1.5x - 2x daily avg volume)and the stock has gained a considerable amount( at least 3%). These variables seem to be consistent with the price advancing overnight and beyond.
 
Quote from smashandgrab:

I went through my recent trades. I made an obvious discovery - I'm not following my trading plan.

The most glaring mistake is selling before my stop is hit or selling before support is broken.

Another problem is buying stocks that don't meet the trading plan. I have bought stocks that didn't meet the volume requirements at the time of purchase - big mistake. I have bought stocks based on intra-day gambles/long shots.

In the future, I'm going to exercise more discipline. Reflecting back on this analysis at critical times should convince me to stick with the plan.

One more thing - I also am considering holding overnight only when the market is firmly in an uptrend, end of day volume is huge (1.5x - 2x daily avg volume)and the stock has gained a considerable amount( at least 3%). These variables seem to be consistent with the price advancing overnight and beyond.
More...

Yes there is something like cutting losses too short. It can bleed you as efficiently as not cutting losses at all.
 
Trading for a living, equities, and futures. Have been very successful with equities, still trying to learn futures.
1) I will scan via Telechart for equities, scanning mainly on volume, area's of moving averages, sometimes stochastics, etc..Channel lines, 1 day, 3day, week, etc.. I am scalping, and swing trading.

2) will confirm my fundamentals with IBD, since IBD is very questionable toward technicals. My fundamental search is strictly to remove the D and E's from my list, since I don't believe in fundamentals for any trading unless I have lost my mind (see investor or losing position) and held a stock for a longer period of 3 weeks.

3) I use Ensign for Real time charting, with various time frames depending upon the stock, and wether the plan is for scalping, or swing trading. On any time frame, other than ticks, I use candlesticks, Fibonacci, Resis/support/Pivot Points strictly as a heads up, 10/20/34 EMA's, and at 50/14 CCI.

4) Since I trade with IB (.05 cents per share), I don't worry about not scaling into position's or taking an immediate profit due to changes in sentiment, and reversals or retracements of positions. At least I know with Fib, seems to work 80% of the time.

5) The biggest problem is the manipulation of the markets, I just got caught last week and my stop loss was executed on ILSE. They dropped this guy in premarket by 12% , all insider manipulation to get a better price.

Best of Luck
Mark2m
 
Status
Not open for further replies.
Back
Top