Week 2 Trade Breakdown

This was quite a losing week for me...while I anticipated a weak market, I onto into trouble with a number of key areas which I will need to learn from so I don't have anymore weeks of lost trades.

The bright side is that my capital stayed intact pretty well considering 3 shitty trades in a row, and managed only a loss of $154.66, however this should not happen again, since these were easy mistakes to correct in the future.

My first trade was a fantastic set up, and would have been some great quick gains, however poor on the execution.  The stock was YRCW, here are the charts I had made earlier:

My biggest mistake was't my bad order of stop limit, it was buying back in to try and chase the stock after the market had presented a gift of an oppertunity.  Followed shortly thereafter by the fact that  I gave a shit about a fancy entry that may have gotten .02 better price for the stock on what turned out to be an awesome rip of a short cover.  Of course I had not Idea this was going to happen, but the idea for a set up is planning out all options, hoping for the best and getting ready for the worst.

Loss of $45.52

The next trade I took was PCYC.  This was a tale of a penny stock which just simply failed to develop into the opportunity I thought I saw.  The idea behind the trade was that PCYC showed some strong volume a few days ago into some strong gains, which had tailed off in a pretty orderly fashion.  The stock also had a high short interest, so I figured it was a multi day bull flag formation, and would be buying into a big short covering opportunity, similar to YRCW.

The big lesson here is to not trade something with such pitiful volume.  After taking on this trade I figured the ticks in the chart happened very infrequently, and that it could go even 45 minutes before a trade.  No more of this B.S.

Here's a chart of my entry and exit:

Loss of $41.00

Finally was my BGU buy on support attempt.  Here is a chart of the price action (keep in mind my post about buying on the breakout the day before this move where I went completely against my analysis here)

 

Tight stop upon the market making my entry a foolish one.  I realize that as far as risk to reward goes, an entry on support is pretty hard to beat.  That being said, however I did one major thing wrong, I didn't wait for the price action to set up a reversal in price before entering.  The previous supports took an hour to 2 to finally exhaust themselves and reverse...I should have recognized this and used the information to my advantage.  Also I should realize that due to SEC regulations, I cannot trade more than 4 round trades within a 5 day period or else I would be considered a day trader and need 25k for capital, so I don't want to restrict my acct by over trading it - this also means I need to trade breakouts from longer term trends, so the breaks have some conviction to them, and because I don't have the ability to try to buy support, have it break thru my stop and flip the position.

Loss of $68.11

This is one week to remember, and to make sure it doesn't happen again.

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.