I know averaging down and not using stops is a dangerous strategy - I've had my biggest down days because of it. I usually never average down and disregard stops. But in this case the stock didn't take out previous support levels and it went down on really weak momentum - and I was desperate to turn things around. Had I held the trade I could've made $900 bottem to top.
21-Jul Gross 84 Volume 10200 Win% 52 Ave Win 11 Ave Loss -8 Net 25 Huge wins continue to elude me. I tend to focus on one stock at a time and if itâs a winner I try to get aggressive - it tends not to work because as soon as I have a big position I can afford to have it go against me even a little. From now I'll try to play three stocks and build a max 300 share position. I only have 50k BP so I'll give that a try instead of just hawking one stock at a time and developing a direction bias towards it.
22-Jul Gross 60 Volume 4800 Win% 29 Ave Win 35 Ave Loss -11 Net 33 X -37 EBAY 190 AAPL -93 I was up almost 200 because of the EBAY trade, then got stoped out of every trade in AAPL and X. Overtraded and used bigger stops than usual. Got stoped out of trading today, next time I'll quit before I lose more than half of my profits.
Couldn't resist...played EBAY again for another 30 dollars, 91 gross for the day. Also, found out I was msyteriously short the Qs at 38.95 in my swing trade account, I guess an order entered a while back that I didn't cancel - so I just doulbed up in the morning near the highs and then covered on the spike up after the failed attempt to take out thursday lows (50 dollar loss). Probably a gap up on Monday, this rally isn't finished.
Disaster Gross -281 Volume 13600 Win% 26 Ave Win 10 Ave Loss -9 Net -366 Worst day in July and second worse ever. I came in knowing that I was about 300 down net for the month. I was up about 150 pretty earlier, didn't take profits. They evaporated into a loss. I got pissed. Revenge trading ensued. Traded too much and too large breaking all the rules (riding losers, fading breakouts, adding to losers). This tends to happen every time I trade over 7k shares. If you don't take profits, they evaporate. If you do take profits, you leave most of the money on the table. If you take losses, you get shaken out of good trades - churn and burn. If you don't take losses, you lose bigtime. I'll be happy just to recover today's loss and close out the month.
I do have rules and guildlines but with anything if you don't stick too it 100% - then its just useless. That one time you don't follow the plan you're dead. Having a plan, strategy, whatever can give you a false sense of security.
Nobody ever went broke taking profits. Have profit targets, this is a not a "let it ride" market, at least not for the majority. You cannot afford to take the big risk that big traders/day traders take, your only way to survive is to aim smaller and just work on controlling your losses and having some decent positive trades. Everyone gets chopped out of trades, big traders and small traders. Today I had 4 planned shorts and I got knocked out of 3 of them, not once but 2-3 times on each stock. They drove me insane, I was bitching & screaming and threw my keyboard two times. I had little doubt that I was right but I did not keep holding and averaging in as the specialist kept putting on the squeeze with 100 share prints. I revenge traded them a bit but in the end I just wanted out because I did not need to ruin my day or take big losses. All 4 went down, 2 of the 3 I got knocked out of went for 50 cents each and one of them went for a point. Yeah it sux but you know what, my one short where the specialist did not keep going after every day trader share made my day. I did size in that stock, it kept going my way with minimal squeezes, the other ones I kept having to reduce size after starting a position because they would not let you sit it out. You don't double up on a loser, you at the least lower size so that even if you want to sit out the "shakeout" you take much less risk. You need to change your stock universe and simply check out various other stocks. You're currently trading some of the toughest & most competitive stocks out there. Just try new highs/new lows with 100 share lots to play with strategies. You keep trading stocks where at times you simply clash with the way it's trading. It happens to all traders but most don't make the right move to stop trading that stock, the sector or even the whole market when it does not click.
The first 60 days of my trading I was pretty much trading the Qs, taking quick profits and quick losses. I ended up losing out on commisions, and the ocassional big losses. Had no training at all so it was pretty much all trail and error. I figured I'll just focus on one market first just to learn the principals of successful trading and then move on. Stupid move, I now realize that the Qs are the toughest market to daytrade - but the stalking one market habit, I have to get rid off. And I was totally against averaging down, from all that I read it was the stupidest mistake any trader can make - I never did it the first 30 days or so. But the other 3 experienced guys I used to trade with did it all the time. So I figured I'd give it a shot. I still don't average down much, but the few times I do ends up killing me and now the habit is tough to kick. As far as stock selection, I started off with liquid nasdaq stocks so that's my preference - i just recently added some listed stocks but I'm still getting used to dealing with the specialist. The liquid stocks are more competitive but the illiquid stocks seem more expensive to trade because of the bigger spreads and lower liquidity.