Monday, March 24, 2014

Stop Limits

Stop limits always seem like a good idea. So often I've seen a quick blip lower followed by a recovery then some additional time spent solidifying the price before moving higher. But, that doesn't always happen. A second stop ought to be placed as an OCO that will clear out the position if it's more than a blip. I've successfully exited a position after a blip that hit my stop only to have the price continue higher. My stop was not low enough. Seen it work/not work both ways.

And then there's my relentless desire to catch the bottom. Newbie mistake but my tolerance won't stand for only a few cents of risk. So I keep looking for the next pivot. Each day's trade adds to my experience and I'm hoping that seeing the patterns unfold over and over will work be toward a consistent style.

Thursday, March 20, 2014

Interesting

Interesting to see graphically where all the buys and sells were. Don't know what I was thinking on some of the trades. Do know what I was thinking on others. Selling at the break of a channel or selling at the peak of a channel. That first dip early in the day was confusing as was the quick break of the channel later in the day. Didn't know how to read it. The market always seems to wait for a bit to see if it really is going lower or higher before starting the next move. That leaves time to wait with them and take a risk.

Black arrow is an entry, green arrow is a profitable exit, red arrow is a loosing exit.

Thursday, March 6, 2014

Range Bounce Exit Strategy

As I obeyed my stop I of course felt cheated. Just a penny or two below it and the price turned around and ran right back up. As it was dropping it felt like here we go, this is the end. But the volatility of the day was not the kind to plummet all at once. What was more likely was that this was a sign that there was a change in direction. There was still time to get out with a bit more self respect. What I could have done was set a stop limit that would trigger at the same point but set a limit that was much higher. That carries more risk and with it I should also set a regular stop in case I don't get the range bounce.

Obey the break of the trend line 
But set a limit to get out after the break

Wednesday, March 5, 2014

Look Left

I'm not doing this everyday But I'm amazed at what I miss. Looking left. One of the most fundamental things. Looking at the charts from yesterday's replay I see the inflection point right at a level of congestion. Not sure that I would have had more confidence cause there was quite a bit of uncertainty about just where the support was but it still would have been helpful. I was just looking at the break of descending support and the 3 wave pattern to pick an inflection point.


Thursday, February 27, 2014

Exits

Boy the bigger question now is where to exit.

  1. Break of a trend line
  2. Break of a support 
  3. Break of a trend line after it holds for a bit then at the support of that hold
  4. Failure of support at a moving average
  5. Just after the second new high with lower RSI
  6. Just after the third new high with a third lower RSI
Then in many of these using what time frame. Later in the day it gets longer. First thing it's the 1 minute but when do you I switch to a 2, then 5, then 15. 

Wednesday, February 26, 2014

Focus

It really does take all my energy to watch the charts and make the next decision. I think most of that is coming from not having a plan for exits. I've heard it said that knowing when to get in is easy (yeah right) but knowing when to get out is hard. That's now turning out to be true. I've spent a lot of time learning how to enter. Being consistent with setting stops and taking the several wrong entries before getting the right one. Then the problem is when to get out. I can see that I've got a lot of "feeling" that I'm using. It's the voices that say it will take off again as soon as you exit. It is also the knowledge that it's a bear market and it should at some point take off again.

Getting out at the break of a trend line is proving to be good. Getting out at an RSI divergence seems to work over and over. each of these are very short term. I also want to consider what will be the end of day probability. Maybe that's asking too much. Holding some each day for the long term has proved comforting but it has also proved to be frustrating. In a choppy market, as it's resting for the next move higher I would be better off to sell at the end of each day and pick it up again at the next low.Don't know what to do about that. Keep some sell some turns into how much. I also need to get over the if onlys. Taking a good trade and booking is perhaps enough. I always want to get more, or perhaps I could say improve. Letting that improvement take some time is hard. I'm learning though.

Often when there's a quick rip higher, if it's the first there is often a pause or pullback. Getting out after 3 or 4 512k ticks higher looks like a profitable choice. I should try that. My fear is there will be too many trades with too little profit. Going for the 1 or two good trades in a day may be the better way.

Thursday, February 20, 2014

Too many trades

Still over trading. The number of trades for the day reflect to much fear of missing the move. They do however reflect letting my stops run.So kudos there. There was not one trade that didn't immediately have a stop set. As I review I see that I'm trying to use trader intuition for where the next move will be instead of just sticking to clear mechanical setups. There was one or two setups of RSI divergence for the whole day but so often I don't trust that there will be a divergence and want to make sure I don't miss a move. Another issue is time frame. I'm a detail guy and knowing when to step back and use a larger time frame is not clear. I know to look but really gravitate toward the small time frames or better yet tick charts. Still the overall problem is just experience. I don't have the time to do this every day and by evening I'm tired and don't want to. If I don't love this I doubt I'll be successful so I've got to build that love. It's not looking like it will be love at first sight. I'm an engineer not a gambler.

Across the whole day on this 512k tick chart you can see the setup for a reversal. Waiting that long and having the broad perspective of keeping the entire day in view was what I lacked. I had been stopped out to many times by then and let the last run go.