Today I overtraded on emotion. While I still need to fine tune my entries and get better at identifying ideal set-ups, my main issue remains exits, and a new problem today, too many ordering errors. Along with never doubling down.
If I kept all the same entries I entered today and followed my exit rules as outlined, the following trades would of resulted in PLDI +14, FAS +20, YHOO + 25, and MBI +13. Just staying in those four trades, this in itself would of whipped out my losses from today. And when you take out not doubling down on GE (+17), eliminating ordering errors (+9), and not overtrading on the stocks I exited too soon (+4) – now we are in squarely in green territory.
As I said in the comments in the previous post, I still need to focus in on a couple good set-up types to master and have a smaller set of watch lists – but if I follow my very simple exit rules, that will go a long way in improving my trading. So here are a couple other things after I looked at my charts today after market close:
1) I need to monitor my stocks on the 5 minute chart – not the 1 minute, which makes me way more emotional – I’ve written about this before.
2) More important than making only 3 trades daily (initially for at least this Friday) – is to only make one trade at a time for now.
3) I’m still not sure what to set as my initial stop order after entering a trade. As I said in my post Tight Stops on Chops can Flop, a number like .10 is arbitrary. The last week I’ve been setting the stop order by what would be a higher low, or lower high price swing – in the three days I’ve been trading with real money, there’s been 3-4 trades in which my stops were taken out to the penny and then the stock went in the direction I intended. I know this is paranoid, but it was like the market maker saw my order and swung the stock to take out the stop order. Anyway, I think I’m going to just set the stop order just above the 10 SMA price on the 5 minute chart for now.
