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The adventures of a new Trader
- Thread starter cashmoney69
- Start date
10/17/06
Bought 100 RHAT @ 15.80
11/2/06 (5 day hold)
Sold 100 RHAT @ 15.97
Stop: 15.20
PT: 17.00
R/R 1.12
profit 3.00
review:
What a waste of time!. I'm glad I sold when I did. At the time I write this, RHAT is down another .32!. 16.30 Support was broken, So I sold before my stop was hit. At least I made something.
Bought 100 RHAT @ 15.80
11/2/06 (5 day hold)
Sold 100 RHAT @ 15.97
Stop: 15.20
PT: 17.00
R/R 1.12
profit 3.00
review:
What a waste of time!. I'm glad I sold when I did. At the time I write this, RHAT is down another .32!. 16.30 Support was broken, So I sold before my stop was hit. At least I made something.
I'm just curious and of course if you don't want to mention it I will certainly understand.
What was the strategy buying rhat? Were you bottom fishing because the stock had a large gap down? Were your stops based on any support or resistance? You have a fairly nice support level at 14 and resistance at 18. At 15.80 you had 1.80 downside risk and 2.10 upside potential. Another almost 1:1 risk reward ratio.
I don't know what type of system you are using but I would highly recommend finding stocks that have greater upside potential.
I'm really just trying to help here.
What was the strategy buying rhat? Were you bottom fishing because the stock had a large gap down? Were your stops based on any support or resistance? You have a fairly nice support level at 14 and resistance at 18. At 15.80 you had 1.80 downside risk and 2.10 upside potential. Another almost 1:1 risk reward ratio.
I don't know what type of system you are using but I would highly recommend finding stocks that have greater upside potential.
I'm really just trying to help here.
Quote from HolyGrail:
I'm just curious and of course if you don't want to mention it I will certainly understand.
What was the strategy buying rhat? Were you bottom fishing because the stock had a large gap down? Were your stops based on any support or resistance? You have a fairly nice support level at 14 and resistance at 18. At 15.80 you had 1.80 downside risk and 2.10 upside potential. Another almost 1:1 risk reward ratio.
I don't know what type of system you are using but I would highly recommend finding stocks that have greater upside potential.
I'm really just trying to help here.
---
What was the strategy buying rhat?
* I read a few days ago, before I bought the stock that RHAT was going to buy back something like 250+ million shares of stock. I thought this was a perfect opportunity as institutional buyers pushed the stock up. Not only that but I felt that the stock was ready for a bounce as it has gaped two major times on daily charts, and a small continuation gap on 10/13. I thought that the good news (buyback), mixed with the beaten down stock, was a no brainer.
I learned from my mistakes on previous trades and waited for confirmation the day after the gap down (on 10/26) before I bought.
As far at s/r goes, I was thinking in terms of r/r rations and not really the s/r levels themselves. I risked .60 to make 1.20. The market was down these past couple of days, and I think buyers just got tired of supporting the stock, and like me, they just gave up.
hope this helps
cm69
I understand what you are saying and I don't fault you for your plan. To me support is support and resistance is resistance. I don't know ANYTHING about platform r/r or even how it is calculated. What I do know is everything between nearest support and nearest resistance is noise until one of those levels in broken.
If I were to trade that stock (which I wouldn't because the best reward was only 18) I would have set my stop at 13.65 and adusted my position size for a potential 2.15 loss and let the sucker run until it hit close to the objective or I got stopped out, but that is my style and probably not yours.
If I were to trade that stock (which I wouldn't because the best reward was only 18) I would have set my stop at 13.65 and adusted my position size for a potential 2.15 loss and let the sucker run until it hit close to the objective or I got stopped out, but that is my style and probably not yours.
what is your style by the way?. Im curious.
side note: a 2 point loss is not much to you?. I try to keep my loses under 1.00 while my PT is usually alittle bit more than a point. Maybe thats my problem....i dont risk enough.
cm69
side note: a 2 point loss is not much to you?. I try to keep my loses under 1.00 while my PT is usually alittle bit more than a point. Maybe thats my problem....i dont risk enough.
cm69
Quote from cashmoney69:
what is your style by the way?. Im curious.
side note: a 2 point loss is not much to you?. I try to keep my loses under 1.00 while my PT is usually alittle bit more than a point. Maybe thats my problem....i dont risk enough.
cm69
I have been a position trader all of my life. I had never backtested my methods until this year. The backtest revealed that my system works great in trending markets, but in choppy markets it absolutely sucks so I have been working on a pivot point strategy so I can trade in any market conditon.
On your other point I simply say POINTS ARE IRRELEVANT!!
Let's say I have an account of 100,000. If my risk tolerance is .5% of my trading account then I am never allowed to lose more than 500 per trade. It doesn't matter whether there is a 2 point swing or a 10 point swing each trade cannot have over a 500 loss.
If I were to enter a stock that had a 2 point potential loss then I could only buy 250 shares of that stock. If it had a 5 point potential loss I would only allow myself to purchase 100 shares of the stock. This way every trade means THE EXACT same amount of money in terms of losses.
Now if I trade stocks with a 1:1 reward to risk ratio I will lose my butt, because my win ratio is only about 45%, yet I am profitable because my winners more than make up for my losers. I'm sure there are better ways to trade than the way I trade, but I am not looking for quick profits. My objective is to double my money every 3-4 years and I have been able to do that.
Cash, I checked some of the symbols you trade. All these are heavily traded by the best scalpers and intraday traders from all over the planet. You are running after the same nickle with the best of the best here.Quote from cashmoney69:
I try to keep my loses under 1.00 while my PT is usually alittle bit more than a point. Maybe thats my problem....i dont risk enough.
Try the Russel3000, scan through the stocks. You will find lots and lots of low risk setups with stocks that trade 80.000, 120.000, 175.000 a day.
Try to build a watch list of 20-40 of such stocks and get to know them. Watch them at the opening, watch them at the close.
The best of the best don't chase those small-fry stocks because they're too illiquid for them. They can't buy 1000 lot without driving up the price half a dollar with just one order. That's good for you.
When you goto a casino you don't sit at the high roller table. If you do, the pro's will take you out.
Many of these smaller stocks move slower and more predictably, without constantly getting the feeling of "Da Boyz" always driving the price beyond obvious support/resistance zones in order to shake out the newbies (i.e. hitting your stop loss all the time).
Just me 2 cents. Good Luck.
or try to trade stocks with lower avg volume?... 500k or less?
That's what I did when I used to daytrade discretionary style a while ago, and suddenly found that indicators and technical setups suddenly worked. SL levels worked. Profit targets worked. At least more often than not.Quote from cashmoney69:
or try to trade stocks with lower avg volume?... 500k or less?
Instead of... EBAY, NVDA, OIH etc. constantly like by a magic hand hitting my SL levels (set by TA principles) before turning around.
The Playaz in these high volume stocks come in with enough capital to roll over small fry like me by moving the price wherever they find "obvious" resistance and support levels in order to knock people out of their positions.
Maybe it's just me, but this is my 2 cents of advice. Give it a shot.