Sunday, March 13, 2011

The very first one...

The title already suggested it, this is my very first post on this blog. A blog about trading, about my intake on the markets, my trades, but also about strategies, techniques, influences of other traders etc. In the first place, this will be a journal to me, a tool to review my trades and see which mistakes I make.
First of all, a few words about who I am and what I'm doing here. I started trading several years ago (1998 - the tech-bubble-years...), blew up an account and gave up trading for many years.

A few years back, my interested for trading was revived and I started to educate myself through books, forums, blogs etc. In 2010 I got a big aversion of my 9 to 5 job. All kinds of problems made me lose my motivation. I told my boss he could kiss my... No, I didn't do that, but it crossed my mind ;-)
I had a couple of months to decide what I wanted to do next and could only come up with one thing I really wanted to do. Yes, you guessed right, trading of course.

Easier said than done. There are thousands of ways to earn an income through trading; stocks, options, futures, currencies, bonds... Short-term trading , longer term strategies, investing...
I had to find my thing, my edge. For me, it's swingtrading with a little daytrading on the side (esp. in these choppy times, swingtrading isn't really a 'save' approach...)
I'm a technical trader, fundamentals don't mean sh*t to me. Reading charts to look for setups already takes enough time as it is. Moreover, the technical aspect always ment more to me than the fundamental. Respect for all the Warren Buffets of this world, but it's just not my thing!

Enough of my rambling, next you'll find my trades of Friday, March 12.

Swingtrades (stock, entry price, SL=stop loss)
SOA (short) 22.28 SL22.90
GMO (short) 4.91 SL5.35
PCX (short) 21.90 SL23.15
NUVA (short) 26.29 SL27.75
TZOO (long) 44.60 SL42.00
PAG (long) 20.615 SL19.80

The candles on GMO and PCX don't look very promessing, maybe I'll scratch these Monday-morning. In hindsight, it seems that I'm chasing price on both these trades. They are base and break shorts, but in both cases, price is extended from the short-term moving averages I use (9EMA and 20SMA on the daily chart). I probably had to wait and look for a better entry.
SOA and NUVA are also breakout shorts. They both closed weak and look very promessing.
TZOO and PAG are base and break trades long and both closed strong and with volume.
I'll post profittaking. Stoplosses will be adjusted whenever I feel necessary. I don't want to move my stops too quick, something I still have to learn. One of my rookie mistakes: take profits before my goal is reached, afraid to lose profits. Instead it would be better to let the winners run of course.
However, I do cut my losses when needed. I always use stop losses and only adjust them in the right direction (up for longs, down for shorts). Well, there's always the exception to the rule, as one of my daytrades proves... Ouch!

One of my first trades of the day was in OPEN. It was mentioned in the HCPG-newsletter a few days in a row and on the daily chart it hit 89 for two consecutive days. The previous day closed strong on volume and I expected some follow-thru. And that was exactly what happened. The stock went south in the first minute but than shot up thru 89. I got in at 89.48 and sold partially at 90 and 90.45. Than price came back down.
My big mistake here was to lower my stop to give the stock room to consolidate. I should have kept SL at breakeven or under the shooting star, a clear sign of lower prices to come! I got stopped out when price went thru the former low of the day. Or how a winner turns in to a loser... A rookie mistake.

My second entry however was much better, after price consolidated for 15 minutes and formed a hammer. I got in at 90.22 and sold partial at 90.60. This time I wouldn't make the same mistake and moved my stop near breakeven. Actually, I moved my stop up too fast and got stopped out, almost to the cent. If my stop was 3-5 cents lower I would still be in the trade and got the 91-breakthrough!! However, I didn't feel like entering a third time and I let this great opportunity pass me by. After having almost the perfect entry, I was kicking myself for letting this slip by me!

On the image (mostly 5-minute charts for daytrades) you'll find my long entries (green arrows) and my exits (red).

Another trade I took was CPWM on the break of yesterdays high (11.28). The stock broke out Wednesday on huge volume and had nice folow-thru on Thursday. That probably would have been a better moment to get in, but I thought I might give it a try here. However, today the stock consolidated and I sold near 11.

NOG and CLF where 2 stocks Stewie from Art of trading got in to. I took his entries and both where nice winners (esp. NOG, up +/- 3%). In CLF I again made the mistake to move my stop up too high (also 3 cents, argghh!) and got stopped out, still with a nice gain though.

While going thru my scanlist, JNPR caught my eye. It was consolidating nicely near 42.10 and I got in at the break. Price formed a shooting star on the 15m-chart and I got out whit a 26 cent gain. Not bad, but no home run. I could have sold partially here and kept the stop at breakeven, but in this rather choppy market, I didn't want to take any more risks. Too bad, cause JNPR ended the day strong under 43!

All in all I ended the day with P&L in the green after missing possible bigger winners in OPEN and CLF (and maybe JNPR, but I consider this to be a good trade, compared to the other 2). 2 losers and 4 winners, not bad, but it should have been 1 loser and 5 winners!
The big issues Friday were exits and emotions. I still have to work hard on this. My entries are not bad, it's the exit/stop that makes (or breaks) the trade!

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