I made a mistake today <gulp>

Discussion in 'Trading' started by saxon, Mar 11, 2002.

  1. saxon


    I made a newbie mistake today. Even though I have had a lot of experience trading, most of it has been in stock index futures, and about half of that on the floor.

    But now that I'm a little older, swing trading individual stocks seems more my speed; but it is, of course, a LOT different than what I am used to, in many ways...and I am humble enough (smart enough :) to admit that I have a lot to learn.

    Like today, for example. As usual, I was making my once-a-week basket of purchases on (or near) the open. 15 minutes later I was stopped out of one stock with a 7% loss (it later went to -10%). Yikes!! What a way to start the week.

    So I re-checked the news, and saw what I had seen before; a "new insider trade data" report. There were some substantial proposed sales, but I didn't think it was anything that was going to cause the stock to tank! I guess I was wrong.

    From now on...if there is ANY negative news, I'll just watch the stock for 10 minutes or so after the open; and if it starts to drop and I know I want to own it, buy it 30 or 40 minutes AFTER the open at bargain rates.

    I am sure that there are a lot of such tactical errors that one might make, so...to the real point of my post...can any of you guys recommend a book on TACTICS like this (mechanical stuff; broader strategy stuff I am pretty comfortable with)??

    I'm all for "learning from experience"; but at $500 a lesson, it gets a little pricey! A little book learning might help me to avoid these sorts of land mines.

    Thanks, and good luck to all.

  2. BSAM



    Here's a few ideas you might want to consider.....

    1. Until you become good at understanding support/resistance, channels, etc., etc., don't play the open. Wait 20 to 40 minutes. It's too often just too volatile.

    2. Watch your share size. Start small, then do larger share size. A 7% loss seems extremely steep to me.

    3. When you see the trade going wrong.....GET OUT!

    4. News....Very often hard to tell whether news is good or bad. I've seen what I thought was good news and the market went south and vice versa. Just watch the market's reaction for awhile.

    5. Experience is the best teacher when dealing with stocks. Don't give away $500 at a time. Yeah, that is a little "pricey"!!!:cool:

    There are many here at ET who can offer you lots of help. They'll chime in, here in a bit, I'm sure. Good luck.

  3. stevet


    seems to me saxon knows what he is doing - i thought the point he was makeing which is definetly valid - is that no matter how experienced you are - check and double check - the beauty and the beast of the markets is that they reward diligence and punish complacency

    personally in trading indexes - i dont trade monday mornings - as the weekend causes a lot of divergence of sentiment - and that divergence can chop you up
  4. GeeTO69



  5. What a coincidence GeeTO69, this is the second time I've responded to a criticism of yours today. No offense, but you sound like a real a**hole. :eek: If that is not the case, perhaps you might want to rethink the way you come across in your posts.

    Saxon: as a fellow swingtrader, my suggestion is to avoid the falling knife by looking for confirmation momentum in a lower timeframe. For example: if you are trying to play a pullback on a daily chart, fine tune your entry with a momentum buy stop entry on the thirty minute. If you can combine your fade entry with short term positive momentum, then you should have far fewer occurrences where the market rips right through you.

    p.s. For a book chock full o' swing tactics, check out 'The Master Swing Trader' by Alan Farley.
  6. Splat


    I am not going to condone darkhorse's comments however being
    a relative newcomer myself, the most irritating thing
    about elitetrader are the negative comments that are put on the
    boards. Saying that I will say that the majority of people
    on these boards are really great and are very helpful and friendly
    and always reply positively..

    One thing I definitely agree with darkhorse is that if you
    cant be positive then dont bother because you're only gonna
    piss people off.

    Trying to post positively ;-)

  7. GeeTO69


    just a little humor fellas, trying to keep a positive outlook while all seems to be going to hell {{sigh}} :-|
  8. Who knows why it tanked. Insider registrations rarely cause a huge selloff, but maybe it did in this one case.

    The point is, if you vet every stock for the slightest news, you'll be scratching a whole bunch off the list. Winners included.

    Only real prevention is tight stops, the news is secondary.
  9. saxon


    No sweat, GeeTO. Sorry to hear you're going through a rough patch.

    Hey...was the book recommendation for me or for you? :)

    And as for you other lads...

    ...just ordered a copy of 'The Master Swing Trader'. Thanks.

    And you're right; most everybody here is pretty cool cause we're all in the same boat. Nobody knows it all. And a good piece of advice sure beats the heck out of taking a beating in the markets.