Ok, I'm going to see if I have the persistence to keep up this journal. Please feel free to give any constructive criticism, advice, and comments. -- For those of you that dont know me, I'm a beginning swing trader. I'll be getting considerably more money for my account which has inspired me to keep a journal, as the adventure in store for me should be interesting. As soon as I get the money, I'll begin posting my trades. Here is the method I'm going to trade by: -- 1. Because I'm a swing trader, I'll be trading both nyse and nasdaq stocks, as well as ETF's like spy and others that normally would be too expensive. NO amex stocks, futures, options, or currencies will be traded. 2. Trade stocks with avg vol of at least 250,000 + 3. Stops will be held mentally and placed after a loss of 3.00. I will hold winners as long as possible until either stops are hit, or for any reason I think the position should be exercised (bad news ect..) 4. (not sure about this one) Buy 3 different stocks in 3 different sectors..If it works for investing, it should work for short term trading. 5. All positions will be held overnight - Nathan
Today at the open I bought RHAT (Red Hat on NASDAQ) Still below 90 MA, but has been increasing in volume steadily on daily charts. I noticed when the Dow was down -166.23, RHAT was actually up 1.05. I found this interesting. And with the Dow at -86.02 at the time of this witting, rhat is up .31! . I'm looking to gain or lose 2.00, whatever comes first. 12:48 I just bought TIE. Check it out on 60 minute charts. Seems to have hit bottom at 23.38, and is rising on higher than average volume. I'm looking for 3.50 on this one. -- I'll post my charts at the end of the trades - Nathan
RHAT Bought @ 22.91 sold @ 23.39 commission 14 profit $ 34.00 Reason for selling: Hardly any movement. Even though the stock was up for today, not much action and I decided I didn't want to hold any positions overnight.
TIE After I came back from lunch, I decided to take a look at TIE. For the last hour or so, its been rising. I knew from trading TIE a few months ago, and simply by looking at the chart (daily), it didn't take me long to buy up some. "Damn this stock is cheap!" I thought, and ended the week with a nice gain, however again, like RHAT, I didn't want to hold overnight...dont wanna be greedy . Bought at 24.75 bought at 26.81 sold 26.84 sold at 26.90. commission 28 r/t profit from TIE $ 176.00 EOD profit $ 210.00 At the last 10 minutes of the day, when I wanted to hit "sell", I accidently hit buy, and was in another lot of TIE that I didn't have the money for. Instead of selling all my shares at once, I sold twice..(sigh) oh well..paid an extra 7 dollars.
Almost forgot. I would not have bought TIE, if I didn't look at the 60 minute chart, because on the daily chart, TIE was still in the red. I used to think that the daily chart is best for direction and the 60, best for timing...maybe this is not so true any more...
Look man, I know this is your journal, and if you really, really don't like my post I'll ask Baron to remove it, but did you re-read anything you wrote and think about whether or not your trading strategies are up to snuff? ...Stops will be held mentally... Why? It's not a good idea. What is your reasoning behind it? Why not use GTCs? A lot of traders don't use stops, and some of the great ones make a lot of money that way, but beginners who don't use stops almost always end up on a titanic that they ride all the way to the bottom of the sea. The "it won't happen to me" mentality is not a good one to have in this profession. ...If it works for investing... This is not the same thing. Some see trading and investing as the same thing but on a shorter time-frame. 60% of the 95%, or whatever the percentage is that don't make it trading, fail to realize that trading and investing aren't in the same ballpark. They're not even the same sport. Okay, "apples and oranges" is a good analogy here, they're both fruit, yes, but other than that they are two very different things. Trading and investing share the same basic fundamentals, but the characteristics of their nature are very, very different. The 3 sector/3 stocks idea may be good, I'm not saying it is or isn't, but the logic behind your rationalization is not. ...Still below 90 MA... increasing in volume... You're really making Live trades based on these indicators? Short-term trades based on a 90 day and volume? Nothing else? Seriously? ...gain or lose 2.00, whatever comes first... Risk Management is the name of the game. You really need to find out the name of the sport you are playing if you want to win the game. This statement of yours say to me one of only two things: either a) you are a gambler and this is just an extension of Craps, or Baccarat, or Black Jack for you. Or b) you just do not completely understand what risk management is. I personally think that it is a case of b). It seems rather apparent that you actually are concerned about your risk exposure, based on the fact that you plan to avoid excessive market sector exposure with the 3/3 thing, but when it comes down to number crunching you are still taking the same odds as Baccarat. Trading is a numbers game. The only thing that truly separates us from gamblers, is our ability to limit our losses and let our winners run. I hope you take this for what it is, constructive criticism, and not as a personal attack. (trust me, this isn't a personal attack, just ask WmWaster) I'm not here to hinder, only to help. All I'm looking for is the satisfaction I get from helping others. Best of luck.
2manywhiners No, its fine. I'll do what I can to make my answers make as much sense as possible. 1. stops. The reason I said I wanted to hold stops mentally is because I think it will enforce discipline better than having it automated. I guess its like many things in life. Telling yourself to do something you dont like to do then actually doing it, is a lot harder than having someone or something else do it for you. I dont know if thats a good example but thats what came to my mind. 2. Investing. Yes, I understand that investing and trading are not the same. The reason I said this is because I'd like to hold positions longer, possibly a week or little more. One stock may be very touchy to news, and just the overall movement of the market. Some stocks like Wal-mart react VERY strongly when the dow is down. from 7/12 - 7/14 the dow was down a total of -394.86!. Looking at the daily chart for wal-mart (wmt), the reversal is obvious. 3. The 90 MA. Yes, this was a mistake on my part. However there was some reasoning behind this. Many people....i guess position traders / investors look at the 200 MA. My reasoning at the time was to use a 90, so I could get signals before the guys that use the 200. Sounds stupid I know. I guess I'll just stick with a 50 MA sense its used by many. 4. Gain or lose 2.00. I dont really see whats wrong with this. IF I did not use the 2/2 stop, then yes I'd be gambling because I would have no idea or concern of when to exit. you said it yourself "The only thing that truly separates us from gamblers, is our ability to limit our losses and let our winners run." By setting a 2.00 stop, I am limiting my losses. On RHAT, I would have let my winner run, however the stock was "boring" so I sold (at a profit). --- If you have any money management advice, I'm all ears. - Nathan
You contradicted yourself here (don't worry, its normal, I still do it sometimes). Why would you sell a winner because of "no movement"? There's nothing wrong with holding a winner overnight ~ you will face the occasional gap down but thats a cost of doing buisness IMO. I'm not saying its an invalid reason but you did violate your expected profit on this trade (I believe you were looking for 3.00). EDIT: Ok. I just saw your final post:"By setting a 2.00 stop, I am limiting my losses. On RHAT, I would have let my winner run, however the stock was "boring" so I sold (at a profit)." This is an awful reason. The biggest mistake you can make (other than not sticking to stops) is selling too soon. This is a lack of patience, you need to fight the need for "excitement". EDIT 2: RHAT will very likely break 23.60 tomorrow. In fact, thanks for reminding me of this stock, its been a while since I've taken a trade in it.
Money left on the table is better than money lost...agree?. No prob with rhat. It was up in a down market, thats what came to my attention. - Nathan