Trading Dummies
- Thread starter Babak
- Start date
Here is a classical example of greed. Entered EBAY on the inside bar at 40.64 with a stop at 40.47. Risk of 0.17 not too bad. AT R=1 , moved my stop to even and planned to get out at R=2 around 40.98. Of course in the process I got greedy and was stopped out even with a huge P/L of $10.00. Another lesson learned....
milan, the 3rd candle was the first dummy signal candle (the next candle traded above the 3rd's high). Your buy stop would have been at $40.50 and the stop loss a bit lower than the 3rd candle's low; giving $0.30=R (but maybe you weren't watching it at that time to catch this earlier entry).
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nimrodeo, any guesses as to what stock was in play today?
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nimrodeo, any guesses as to what stock was in play today?
Yesterday I did another dummy trade. In the first hour the markets were going down quite sharply, so I decided to put on a short trade. I looked at several charts and seemed to me that DPH could be a good candidate. I was also looking at other symbols, XLNX for example, but this would have turned out to be a more difficult one, ending stopped out.
Since this trade, I've started using 30min bars instead of 15min.
I shorted DPH on the third bar (see attachment) at 0.50.The entry has been a little "dirty", technically speaking a less than perfect dummy entry, being the previous (2nd) bar not an inside nor a reversal bar. But it was tiny, thus lessening the implied risk. Besides that, my scanner was signaling a large number of trades on DPH and its reference market (NYSE) was going down more than Naz and AMEX.
I set a stop at 0.55 immediately after the fill. The initial risk was a round 10%, so I decided to sell only 2000 shares. Until 13:30 the trade was going pretty much nowhere, and I was considering about closing it, fearing an unexpected event. Then I thought that, after all, the risk has been already limited by the small position, so I resolved to hold tight and wait until EOD.
After 14:00 the price started to decline, so I could move the stop to 0.52 and successively to breakeven. Suddenly, while I was manually adjusting my entry/stop levels lines on the chart, there has been a big volume spike, more than 750000 shares at a time. The chart system redrew the whole chart to make room for new data just when I was dragging a trendline with the mouse, sending my line to infinity and scaring the hell out of me for about half a second. At this point I was looking at a 4 hours, 5min bars chart, as a way to magnify the otherwise almost invisible price movements. Then I realized, happily, that the trade was going well.
After further trailing the stop, I closed it at 0.37 10min before closing, with a 25.70% gain and a R/R ratio of 2.6/1 on the initial stop, which I consider quite good.
The dollar amounts I'm using for these trades are small, so are related P/L, but my objective is to learn to trade manually. Then it will be just a matter (almost) of increasing position size.
GS
Since this trade, I've started using 30min bars instead of 15min.
I shorted DPH on the third bar (see attachment) at 0.50.The entry has been a little "dirty", technically speaking a less than perfect dummy entry, being the previous (2nd) bar not an inside nor a reversal bar. But it was tiny, thus lessening the implied risk. Besides that, my scanner was signaling a large number of trades on DPH and its reference market (NYSE) was going down more than Naz and AMEX.
I set a stop at 0.55 immediately after the fill. The initial risk was a round 10%, so I decided to sell only 2000 shares. Until 13:30 the trade was going pretty much nowhere, and I was considering about closing it, fearing an unexpected event. Then I thought that, after all, the risk has been already limited by the small position, so I resolved to hold tight and wait until EOD.
After 14:00 the price started to decline, so I could move the stop to 0.52 and successively to breakeven. Suddenly, while I was manually adjusting my entry/stop levels lines on the chart, there has been a big volume spike, more than 750000 shares at a time. The chart system redrew the whole chart to make room for new data just when I was dragging a trendline with the mouse, sending my line to infinity and scaring the hell out of me for about half a second. At this point I was looking at a 4 hours, 5min bars chart, as a way to magnify the otherwise almost invisible price movements. Then I realized, happily, that the trade was going well.
After further trailing the stop, I closed it at 0.37 10min before closing, with a 25.70% gain and a R/R ratio of 2.6/1 on the initial stop, which I consider quite good.
The dollar amounts I'm using for these trades are small, so are related P/L, but my objective is to learn to trade manually. Then it will be just a matter (almost) of increasing position size.
GS
