Thanks alot for all the comments guys, whether good bad or harsh I accept them all I dont like being sugar coated that everything will be ok, i Like knowing the truth and reality - thats the only way I will be able to succeed. Thanks!
Maybe not a recipe for disaster but certainly a recipe for cutting winners short. It's been taking me a while to get over that bad habit.
Doji, How can I learn to know when a winner is a winner and letting a "winner run" like they say ? and another question, lets say I get into a position, the stock starts moving in my favor, do I start slowly raising my stop loss ? And also...where should I be placing stops ? At support / pivot point levels ?
If I was standing in front of a crowd of brand new traders and was allowed to tell them only one thing to guide their profitable careers it would be this: "Place a hard stop with every trade and move it only in your favor. If you choose to use a mental stop and a trade runs against you and reaches your mental stop and you have the thought 'I'll give it just a bit more room', EXIT IMMEDIATELY." Yes, I had some of my biggest gains (and my biggest loss) trading options. A few were day trades, most were swing trades, usually overnight. I will very likely day trade options again this year. I've been testing strategies in my sim account for capturing intraday moves on large positions with SPY, AAPL and X options, which are incredibly liquid and have tiny spreads, allowing for good risk management on large size. I'm also considering swing trading small size, reversion-to-mean plays on some of the big swingers BIDU, MA and ISRG.
When I figure these out, I'll let you know :eek: If the trade doesn't stop you out and moves in your favor, it's a winner, at least for a while. I've left unbelievable profit on the table by moving my stop to break even too soon. Because I tend to trade at price extremes where the bulls and bears are fighting for control of the move-in-progress, there's a lot of noise. I'm mastering the fine art of accepting my cost of admission to the trade, and letting the trade play out. I use stochastics to determine an initial profit target zone. Once price moves the fast stochastic line about halfway to the other side of the spectrum, I now move my stop to break even. I've been working hard to ignore the bull/bear fight that occurs at various technical areas and allow the trade to continue its trajectory to the other side of the stochastic spectrum. For an example of how I use stochastics to guide entries and exits when playing a stock that's trading in a range, check out my IDCC chart on the 2/3/09 post: http://www.elitetrader.com/vb/showthread.php?s=&threadid=132626&perpage=6&pagenumber=45 You can see I was only playing the short side of the range, leaving a lot of money on the table by not reversing to long. I had a much worse short bias then than I do now. I place stops at the price that would invalidate my reason for entering the trade. If I just shorted the first lower high of the day after a run up, I place my stop either above the lower high or maybe above the high of the day if they're close to each other. If I enter a long position on a breakout above the last high, I'll place my stop just below the low of the breakout bar and I'll move it to b/e quickly, because a failed breakout is a strong reversal signal and the failure often results in a rapid move against you.
This is the sharpest tip so far, but as this is the weakness for the OP it's lost on him. Nodoji's tips are next best but limited as he is on the learning curve (and on the right side of the learning curve). If I had come in on this at the start I would have asked the OP to define his entry in order to ascertain the extent of the problem to be corrected. However we are way beyond that and a bunch of errors have become evident. Error 1. Asking for help while showing a clipped chart. This shows you don't realize the importance of looking left. Error 2. Reading Lev2 Vol. You are not able to read vol signals on the chart so trying to tape read is way beyond you. You are kidding yourself - quit tape reading until you develop vol skills and then learn to tape read if you must, but it's not necessary. Error 3. Not reading PA signals for entry or exit. This compounds error 1 because if you did look left you would not be able to read the market talk. (You have been given a few basic signals by helpful posters) Error 4. From what you post, write and question I have to assume you are not using multiple time frames. That is worse than not looking left. You need to know what the bigger players are thinking and what the smaller players are doing. One is getting prepared while the smaller time frame is pulling the trigger. I probably won't have time to invest more than this one post, so here goes. 1. After a Gap the first candle will give you a huge amount of information for the rest of the day. Just a little info: The high is major resistance but the close can give you a catchment box. The tail of this candle is telling you they are going to try to reverse the market long. 2. You MA's support the positioning of a trend line down forming the base of the wedge, but without the MA's this base has 3 points of contact. 3. Look at the PA in this wedge and its conclusion. You have 7 candles down without a higher close and then the break of the wedge with the 1st higher close. 4. The move down in the wedge has no volume interest. The green break is on higher volume. Now note the open is also higher so we have a higher open and close on increased volume with a break out reacting on a PP. 5. The next signal is a Morning Star confirmed by PA moving higher. 6. Next PA consolidates into the gap candle support. This is where the Gappers closed the 1st 5 mins. It forms a perfect base. 7. Your MA's die offering a neutral environment. Selling volume fades. A market can run now. 8. What happened to the PA on the 1 & 2 min charts here? Remember what we are looking for: Falling wedge is expecting a up move. Positive break out brings in aggressive traders. Then Morning Star brings in more traders. PA consolidates with a flat base and fading selling. So what do you see on the 1 & 2 min? 9. Now you have had several buy signals, no sell signals and your stop is under the low at the PP. 10. If you missed the break out and the Rising Star the consolidation was next best. The 1 & 2 min gave a big Engulfing that triggered the 1,2,3 signal traders. 11. Now the bigger time fames signaled longs so more traders piled in and there's no surprises when there is a lack of supply in a gap area so it's a fast move. 12. The move up is a no brainer. There is no sell signals until the R1. Then it's a gift with the lower open and close You don't need to scale in or out. You don't need to tape read. You need to focus on PA for now and write out every signal you are going to use into your trading plan.
This one was a recent game changer for me. I always looked at the daily chart for overall big picture, but rarely at time frames 5-10x my trading time frame and never at the next smaller one. Once I started doing this, it removed most of the "why the heck is price doing THAT?" moments.
Holy shit, awesome tips guys , Spurt.. awesome thanks soo much for your help , and everyone else !!!!!!!!!!!!!!!!!
Wow I read Xspurts analysis like 6 times , and IM understanding more and more of it each time I read it. I need to memorize more candle patterns, it seems, and pay more attention to detail, Inever knew about the important of the gap down and the first 5 minute candle high + close what it can do and its impact on the rest of the day. How do I learn to analyze this PA the way Xspurt just did ? Is there a book I can read ? Or just more screen time ? Its just awesome....every day a piece of the puzzle is received....
Screen time is everything, just keep watching price action until you start to recognize solid setups the way you recognize it's very likely to rain when the stratus clouds and the barometric pressure hang low. I highly recommend Al Brooks' "Reading Price Charts Bar by Bar" as well. Xpurt, agreed, awesome post!