Thought I’d update you guys. Well I did really good from the time I started last April/May. I was up nearly 50%. And then August happened. All the reverse miracles happened (when negative things happen that shouldn’t be able to happen…but then they do). My 3 months of gains were nearly wiped out in 3 weeks. The thing from this thread that still stands today is this set of words: “The only reason I took a big loss is because I didn’t take the little loss”. STILL STANDS!! I was up nearly 50% and as of today I’m up 4%. Still green for the year so I guess that’s still positive. Now a days I’m much more cautious in my trades. I trust no stock…at all. I’ve seen some crazy things happen. Of the stocks that about wiped my trading capital out, probably 80% are today about where they were when the massive drops of August happened. Some still haven’t recovered. I still learn something with every trade but still feel like just when I think I learned something, the market has no problem showing me that I don’t really know anything. To date I’ve got 56 winning trades and 34 losing trades but my biggest loss is 3x the size of my biggest win. All goes back to taking small losses instead of big ones. Lastly, sometimes shit just happens for no apparent reason. Unfortunately, shit happens in a negative sense way more than it has in a positive sense to date. I just had a losing trade the other day where everything was on a great uptrend. I did everything right. I waited until the run was solidly confirmed. I bought in, and 4 minutes later for no reason that I can find yet, it tanked. I got out, it stopped dropping, and seems like it’s reversed now. THAT still pisses me off to no end. But at least I was smart enough to get out at only a 5% loss so I’ve learned along the way. The lesson on that one: Even when everything is right, the market is still in control. Take the small loss. There’s your entertainment for the night!
What stock tanked at what date/time minutes after you entered? Maybe someone else can tell you why. You should never trust the market, the market doesn't care about you, you should trust your trading system if it's proven to be working and trust your risk management if it's proven to be working, only then you will be able to survive long term. Your win rate is nice, so you might be on to something with your trade picking, however the risk management looks like it could use some work.
The stock was HUYA. The support on this one was at 3.40 but I considered it on a run. Then it biffed it. When it sank below $3.40 I assumed there was something going on with it that I just didn’t realize and I was already down 5% so I just got out of it….only to discover that this really was the support. Just aggravated me. This was on the 18th and I bought in at 12:18 pm. You can see what happened right after.
I should also mention that up until August my swing methodology was through support and resistance markers and that did work pretty good for me. My problem was not getting out soon enough when things like August happen. However, I took a break for a couple months and have been trying more of a momentum approach by suggestion of another. The momentum approach doesn’t click for me though because all I see are stocks on a run which to me usually means “oh that’s gonna reverse and drop”. I’m still experimenting though and doing it in smaller dollar amounts. The way it’s explained to me is it’s about upward price movement plus volume equals $$ but all I see is a stock that surely must drop.
It's in a nice channel uptrend since September, however i don't know this stock so i have absolutely no clue what side it's going to go. Looks like it was a 20 cent move from the top that day, which seems to be fairly normal looking at the recent price action history of this stock. Maybe your sizing was too big so you couldn't hold during the draw down even though it wasn't anything out of the ordinary? Edit: oh wow, it's ATH is over $50, is there a specific reason why you picked this stock? Seems very risky with a history like that to me.
Yeah I got a new friend who suggested it to me and he does rather well momentum trading. That’s why I’m investigating that type of trading. I just can’t make it click yet but in a leap of faith I tried a few that were suggested and they all made money. I just ent into them small. On HUYA I thought “ok I got this and it’s set to run” and I dove in…and then it dropped. It’s been suggested to me to average in but I haven’t got that down yet. Seems when I go in lite I hit the right entry but by the time I feel confirmed on the run, it’s about peaked and I rode it with a smaller buy. Granted a win is a win. So with this last one I threw it all in since I was so confident that the run was on…and then it tanked. So still figuring some things out.
Going all in is never a good idea, even when you are confident. You should probably stick to risking a maximum percentage of your account per trade. Meaning if trade a $10K account and are comfortable with a 2% loss per trade you should risk a maximum of $200 per trade and adjust your size according to that. So if your stop is $1 away, you should buy a maximum of 200 shares to stay within the 2% potential loss. I personally am not a fan of averaging in for day trading since most of the time the trade duration is too short to properly average in, for swing trading it's a whole different story. However that's just me, it might work for you. Also remember that momentum and volatility cut both ways, it's nice when you are on the right side, but it hurts when you are on the wrong side. I prefer financial products that might move slower, but in my opinion more predictable over very volatile products.
Sorry don’t mean my whole account. I try to stick to about 500 shares on something. Lately I’d start by about 200 and then adjust depending on the trade but keep mis-judging that and some will do the full run of the swing before I get 500 in it. This is a new technique for me though because I’m unsure on these momentum trades vs trading between support and resistance.