I started go live 2 weeks ago. I'm learning the strategies from Harvey Walsh. I have a part time job. Most of days I can only trade the afternoon session during the last 2 week. I started with $5000 and have been trading 100 shares only. The first day started so well with the Fed announcement. Today I made unforgivable mistake. I crossed the bottom line of maximum loss $50/day($100/week) and ended up with a $116 Loss($70 commission). I went for another 3 losing trades in a row after the -$50 had been reached. Week 1: +119 -50 +35 Week 2: -55 +23 -116 Total since first trade (2 weeks): -44 Total number of trades: 27 I will stop trading for 2 weeks until I move to my new apartment with new system set up properly. Here I start my Trader's Record wish I can be more objective, patient and disciplined.
I lifted the trailing stop loss too early and didn't give enough room for a profitable trade to develope. In the last two weeks, I entered a few trades developed nicely after I got shaked out with the lifted stop loss which only covered the commision. Focus too much on "cut the loss early" and "never let a winning trade turn to be a losing one". Both my winning and losing points get smaller and smaller. I should be more picky with the set up and once i enter a trade, should be more confidence and instead of running out of door with a minor shake I should hang on as long as the EMA or the original stop loss not hit. Don't watch too much on 1 minute chart. Instead always have a bigger picture of the market movement. Didn't trade today. Will do more paper trade before I regain my confidence.
After talking with JC, here I adjust my money management plan. I loose my risk a little bit. Every day I can not lose more than $100(commission included), will stop trading for the day if 3 losing trades happen in a row. Every week I can not lose more than $200. will stop trading when this number is reached. If had 3 losing weeks, will stop trading the last week in the month. So I will not risk more than $600 in one month and with my $5000 capital I can stay in the market making a number of trades in quite a few months. I will stick with my plan and never overtrade again. Trading is to correct my mistakes and overcome my weakness. If I repeat the same mistake, I pay the cost for nothing.
Another problem I need to work out is that I have the tendency to think of the result of the day and don't want to take home a negative number. For example, If I had a small loss from the previous trade, like less than 10 dollars, the following trade I will go for some sub-standard set ups just to make the $10 back first then I will go for some more serious setups. I think it's very harmful in a long run. Similarly, worrying too much to cover the commission ($4.95 per trade means at least 10cents move trading 100 shares) is a bad habit, it jeopardizes the real trading objective- trade to trade well. I will focus more on the average winning/losing points instead of the minor difference of the positive/negative after-commission results.
+$39 1 trade +49cents *100 shares - $10 commission With yesterday's practice with paper trade, I gave more time for the price to run before moving the stop loss. It works well to catch the trend.
-$26 3 trades -0.19 -0.02 +0.25 --------- +0.04 $0.04*100-$30=-$26 Traded 1 hour today in the afternoon. During the trading made 3 phone calls to lawyer and builder. Should not trade today, need to concentrate. This is another lesson. before I can make profit consitently, I should not sqeeze to trade. Concentration is so important. The first trade exited a little late, but still OK, not big mistake. QUANLITY NOT QUANTITY!!! NO MORE TRADING BEFORE MOVING TO NEW HOME!!!
Week 1: +104 Week 2: -148 Week 3: +14 Total since first trade (3 weeks): -30 Total number of trades: 31
After 1 week's away today I'm back to trade. Trading with 150 shares today. 6 trades 2 winning trades. Tried take partial profit with half shares. 4 losing trades. Today I had 2 major mistakes. 1. During the last trade I repeated one of my old mistakes to lift the stop loss and let a winning trades turned to stopped out with a loss. This is a mistake didn't follow my plan and rule. This is a problem of FEAR. 2. The problem with plan/setup. The biggest loss came from the first trade, I was down $70. I took a too big risk of 40 cents expecting a strong breakout. I will not play this high risk game again. This is a problem of GREED. Except for these 2 mistakes, I followed my plan. plus commission -$103 Tomorrow need to keep trading with cautious plan. Be objective and discipline. Before I can be profitable, I will not trade more than 5 trades everyday. I fell I am much less objective trading frequently.