Week 1 Trade Breakdown

I have been giving some thought as to how I would review my trades, and I think I will start off with a weekly trade recap.  Each trade I want to use as a learning experience, as a part of my "tuition" for participating in the market.  Either gain or lose, I will at least be learning either something about the markets, or something about myself which will be invaluable and absolutely critical as I progress.  I also would like to create a scoring system, which grades each trade that take, so I can spot any bad streaks sooner and correct them.

Now onto the trades:

My first trade that I took was AMD.

This trade was a mistake that turned out positive for me.  I spotted a good developing opportunity, however entered in much to early, and mistook a breakout for a false one, and simply bought into resistance.  My biggest concern with this trade is the amount of risk there was during the next day, almost 5% risk.  The flat out truth is I cannot risk such heavy premiums for long without them catching up to me, and also stay in business at such a cost.

Also the buying activity at the top of the price move was silly.  I was trying to sell a piece and secure some good gains, then the chart looked like it was developing into a bull flag at the 5 minute interval.   Should have sold out the 300 shares, and held the rest long without buying back in unless it was a much more obvious opportunity.

This trade was helpful in that there were plenty of mistakes to look at and learn from, but I also made some good gains from it.

The second trade of the week was long BGZ:

There was a very long term downtrend intact on BGZ since March, and this buy was simply playing a short term pullback.  I do expect the market to move higher once more before a much bigger pullback (no evidence on this I feel the market is over corrected bullishly however).

Number 1 concern on this trade was the lack of preparation for the trade.  I knew it was a fed announcement day, which usually carries a choppy trading day afterwards, with the SPY being so close to its highs, it was very likely that another test was coming.  It turns out that it was good that I didn't have a bullish bias, but I did hop aboard this trade a bit late in the day.  There was also another opportunity to add to my position had I been quick the next morning, again I was not expecting such quick and thorough follow through.

My sell out turned out to be a bit too early, however I was getting the right feel from the market...It looked like there was an "all too obvious" set up for an upside breakout, and when it finally did, I would have liked to see more volume to continue the tend.  As it turns out I sold just before the false breakout, but enough to save most of the gains.

I will spend most of today looking for set-ups, nothing is on my radar at this time, we had a busy weekend and I have not had a chance to get prepared for this trading week.  I will hang low unless I spot some good looking charts.

First Trade - AMD

So here is my first trade...it is currently still open.

My position is long AMD 600 shares @ 5.69.

I looked in a stock screener www.finviz.com (awesome site, btw) for stocks with above average volume, near their highs, and with some pretty good short interest out there to add some fuel.  AMD came up and looked like a promising bull flag opportunity.  Unfortunately a good thought mixed with poor timing and entry will leave something to be desired.

The stock did not break out as I bought it (unfortunately I had to place a buy stop order because I can not get my entry 100% due to work obligations) which leads me to think I should wait for a break in short term trend, or try to buy in at the lower trend line to get a better price with a smaller stop loss.  I left the position open as it was running against me because the lower trend line had not been violated and let the price make one more attempt at my target.

Right now I am stuck weather to sell out at 5.94 as price approaches resistance and re-buy it on an upside break, to let it ride some more and tighten my stop, which is currently at 5.74 because I also do want to keep my trading commissions paid for at least.

I will give it some thought overnight...right now I am leaning towards lowering my stop to reduce the risk of getting stopped out on morning chops.....