From my own experience working with clients day trading is NOT a percentage play for most mortals. Try trading much smaller size and position or “swing” trade - 3 days, 2 weeks, a couple months... that type of setup. Let the position work in the market. Start out ridiculously small - holding a position overnight should not cause you anxiety. Grind it out and gradually build up account equity. You’ll be much better off in the long run learning how to swing trade. And stopping the present bleed from day trading is job one. Just stop.
So you bought when, exactly? At 1055, after the big bull candle? That is chasing the stock. Taking an entry so late in the up move is risky at best. When you see that formation, wait and let the price move sideways a bit, with decreasing volume. Watch for it to level out, maybe give you a reversal indication, and pounce on it as it BEGINS to go up the NEXT time. The NEXT time. Then follow it up with your stop after you have some profit locked in. This play would have been better with one minute candles. You could have taken profit at the first lower low, or taken profit on half of it and let the other half run with a trailing stop, or let it all run while moving the stop up. Let's look at the market open. Stock is showing nice volume, upward trend. Then at 0950 it begins a strong up move. Would have been nice to get a buy order in before that move, right? But you can't know for certain what it is going to do. You know it will probably go up, but for how long? It could reverse at any time. But you watch it and you see that flat sideways move. Uh oh, it's gonna make a break for it. More guys are buying into a promising setup. Some guys are selling and taking profit. So it moves sideways, with neither bears nor bulls in control. Until about 1040. Volume doubles. You get a nice little bull candle. You could wait for further confirmation but I buy right there, and set my stop just below the low of the consolidation. (sideways move) This ensures if the stock turns against me, my loss is relatively low. Now, at 1045, it is headed for the moon. After making one really good bull candle, I move my stop up to just above the break even point. Now, I can't lose. And I am watching closely for the trend to weaken or reverse. Switch to one minute candles. First downward move, I sell off. Now at 11 it is in consolidation again. Kind of a down trend, actually. But watch it. See the long tailed green candle at 1125 where it reverses? Pounce. Switch to one minute again. A stock will often have several cycles like this, up move, sideways move, up, sideways, up, sideways... but each up move usually gets weaker after the second or third one, or even shrink into the noise floor. You already had two. The second one was the big one. The next move could be just as strong, or not so strong. In retrospect we see not so strong but we don't know for sure ahead of time. So one minute candles, sell all or part at the first bear candle. Move stop up as soon as possible to somewhare above the break even point. Now if you had sold only half at the first sign of this reversal, you would get to see the broken run up to $13+ with the other half. Just sayin. If you had simply sold off 100%, you would still have some profit. If you had gotten in within the first half hour of the open, trusting trend and volume to carry it upward, you would have made a handsome profit, buying at like 5-ish and stopping out at 7 or 11, depending on how loose you kept your stop loss. Much less tricky than the momentum play. Me, I like a tight stop, with due consideration to likely support levels, until the stock is well above break even. At that point I move it to break even, and loosely follow it up, as long as the move looks strong. Good smooth trend, slightly tighter stop. Trend weakening, I watch close and be ready to bail when it reverses. I often bail by simply moving the stop up where it is very likely to trigger unless it REALLY wants to run some more, in which case I again follow looser with the stop. Sometimes I sell part of it when volume is down to 1/4 of the high vol of the day. Volume confirms and validates price movement. If an up move is for real, it will have strong volume. If volume falls, then obviously buying pressure is slacking. Bears can take over. This stock should have appeared in your scanner within the first 15 minutes if you had set it to screen for high relative volume gainers or gappers and price between $1 and $10. That is a good combination for finding stocks in play. $5 to $10 is more reliable but if there aren't enough good looking setups available there, then switch to relative volume of say 6 or better, and $3 to $10 or even $1 to $10. This is a good recipe for crazy volatility. If you were tipped off to this stock in a chat room, guess where the tipster bought in for his own account. Use a screener, and find your own stocks in play, and enter early enough to make good profit with low risk. A good way to simply play the trend is to drop the multiple SMAs and use Bollinger 9 with 2 Std Dev. Any time price bounces off the upper bollinger, be prepared for a downward reversal and lower breakout. And vice versa. As long as price keeps rolling upward between the gutters, you are safe. You could maybe take some profit each time it touches the lower limit, and sell all if it strongly penetrates the lower limit like with both lower corners of the candle body. Whatevah. Some charting software will display upper and lower bands with VWAP, too, and this is also an excellent indicator for trending. Me, I am just used to Bollinger Bands, and VWAP only as a single line. If you want to get fancy, you can play this as the classic ABCD strategy, or a Bull Flag Momentum strategy. This takes a great deal of skill. Simply buying early and holding on while it trends is much easier and honestly, you will very likely make more money. Refer to a good general day trading book. The first one I ever read was this one. "How to Day Trade for a Living: A Beginner’s Guide to Trading Tools and Tactics, Money Management, Discipline and Trading Psychology 3rd Edition", by Andrew Aziz Sorry the amazon link didn't post. Maybe it is not allowed. There are many others just as good, some better maybe. This is just the first of many that I bought and read, and in retrospect I could have got by just fine with only the first two or three. Don't buy courses or memberships. Just a few books. Watch out for chat rooms. They can help. They can also be places where you can be lead to the slaughter. Be very ware of tips. Why is this guy giving you this tip? Maybe he has already bought in, and wants to develop an eager flock of buyers to raise the price, and keep it up as he sells? Oh no, surely not! No, he must be just a really nice guy who wants to help you make money. Which one do you think it is? A little of both, maybe? LOL. You aren't gonna get it right every time. And you don't have to, if your entry is far enough below where you are likely to take profit so that the potential reward is 3x the risk, or at least 2x the risk, risk being defined as the distance between your properly set stop, and your entry price. That is how much you know you lose if you stop out. It could be a bit more, due to slide. But we go with that, and give it 3x that distance to move up, and even if over half of the trades are losers, there will still be a net profit. At least that is how it is supposed to work. The wild card is how much will it move up. If there is no recent resistance level, it could be anywhere. Often it is an even dollar amount or half dollar amount. Sometimes it is just a wild ass guess, influenced by your experience, and the volume and price action you are seeing. Or just draw silly lines connecting the high and low reversals and stretch them outwards to infinity and presume that the stock will once again hit that imaginary line before reversing. But the key takeaway here is get in when you believe an up move is forming, not after it has already been running for 15 minutes, and to get out of the position when the move is weakening, not after it has gone back down to where you first bought in. Otherwise, look at a longer trend picture. Lock in some profit as soon as it is safe to do so. Give the price a little room to fall back for a tick, as it nearly always does at some point during a big move, but keep advancing it little bit, little bit. I like to follow just under the previous significant low or the one prior to that. Funny thing is, it works for a wide range of timeframes. Tighten up the time frame just to nail your entry and exit. Work with what candle size you are comfortable with, the rest of the time. <standard disclaimer>This post is sold for entertainment purposes only.
S-Trader brings up another good point. Look how far it is from your SMA collection when you bought in. Just another way of looking at it.
I'll repeat...look at your history of trade results when such happens. Surely you keep your broker statements or using a trade execution platform that keeps a history of your trades. The answer is in your stats...not in a single trade result that you post online. How many trades have you taken so far in these 6 months ? What's the % of your trades so far in these 6 months such has happen when they go back up after your stop has been hit ? Simply, you learn from your statistics of your trading history...its the best form of self help. Also, I recommend you use a 3rd party professional trade journal software that works with your platform...it'll do all that other stat work for you whenever you need the info at a later date. I wouldn't take another trade until I had the stats about my trading so far for the past 6 months. wrbtrader
Agree re: stats! But one thing I quickly discovered as well. If you're either taking invalid setups (not according to plan), and/or don't have a valid edge in the first place... then any stats you may derive from those trades are generally worthless. GIGO -- "garbage in, garbage out." At best, they clearly demonstrate that you're taking a bunch of crap trades, lol. <-- That was my own "rude awakening"... one of many. So maybe the first question to ask is whether one has a well-defined, statistically supported edge. Has it been backtested to some degree? Backtesting stats to examine the validity of the plan itself would be interesting. For example, I still kinda question the OP's 3% stop -- a firm number... but one that seems arbitrary and unrelated to PA, technical S/R, etc. But there are many ways to skin the cat.
would it be possible for you to educate me and let me know a trading strategy that works for you? I would like to understand what other people do to learn? Ive been trying to educate myself from books
Sorry, but I don't feel I'm qualified to truly teach or mentor anyone. When I post here, I'm just trying to offer some input, ideas for discussion. Plus, you really have to find an approach that's a good fit for you. I'll PM you regarding the general approach that I use, though, and the traders who I feel are qualified to teach it. Maybe I can also suggest some other approaches that you could investigate. (I'm not affiliated with and don't receive benefits from any service.) Will get back to you AMC.