Mar 26, 2008

Stupid trade

Sometimes I make trades that I know I really shouldn't be making but somehow the 'what if' factor comes into play and I pull the trigger. Today's JBL short was a good example of that. I played if off the 5-min chart and shorted off the 10:10 bar low. Now, the first bar was bullish and the 2nd bar spiked above the first bar's high or ORH. I don't like this. I should have said out loud 'even though it gapped down... this stock is showing bullish tendencies - stay away'. However, the market was down a good deal at the time and the daily chart looked pretty darn good. I'm not broken up about this but it's a trade that I shouldn't be taking and I certainly should've gotten out much sooner rather than keeping my original stop.





Luckily, I shorted C and was able to end the day with a reasonable loss. Last two days have been tough trading IMO.

10 comments:

Trader A said...

heh.. i make stupid trades almost everyday!i tend to make more stupid trades in days that i'm presented with less candidates,(and so i tend to force trades)
anyway, a nice trade to mention was TLM 10min/6th, which was, except being a little extended, a nice setup.

OONR7 said...

trader a: TLM was in my watchlist and I was actually looking at the 5th bar high (10-min) as an entry but passed. 6th bar was nice but a little far from the 5ema for my taste. Also, I imagine you would've needed a market order to get filled as price took off quickly.

Hammer Trader said...

OO: Where do u keep your stop? I have find if I exit after 4 to 5 bars ( the stock is not moving in my direction), it helps some sort of what.

OONR7 said...

hammer: I've been placing my stops lately above or below what I see as potential areas of support or resistance. So, using JBL as an example, I placed my stop on the opposite side of my entry bar since it was well above the ORL. As for exiting 4-5 bars... I don't know, I like using the 15-min timeframe for exits. But you're right, in this case, since there were bullish tendencies, I should bailed or partialed at the first sign that things were not going as planned. Lesson learned :)

Hammer Trader said...

OO: Another thing I have been thinking is, as 90% of the stock moves with the market, why not trade the market, and the bid/ask spread is smaller and easier to focus.
Of cause the gap strategy will need to be changed but the price movement and volume contraction before breakout/turning point should be the same.

Hammer Trader said...

OO: I remember you asked how to limit risk in futures trading, if you are trading ES, you can try to trade SPY, it's almost the same thing, but you can put your stop at the between of the ticks. Also you can trade less share, but it require more buying power compare to ES.

TraderAm said...

Hello oonr

Yes I have found the last 2 days tough as well. Not many trades have been following thru. So I am trying to attach more importance to setup grades i.e. trying not to tkae sub-par setups. As I said on my blog, if I can get thru this market phase with minimal losses or breakeven then that's a well done.

The main trade I missed today was MT. And that was a long even though the market was down 100 points.

Anonymous said...

come on dude, you messed up. You shoud have shorted at 9.55 NB. what a beaut! just like what i did.
I got out at 10.15 @3% return, nothing to sneeze at.

bl said...

hammer trader, I agree to 90% follow the market. Financials, brokers is one place to be for volatility. Read the news, short the weak ones like wm leh @ Thrs open. I shorted ubs at the open as an experiment(gap up with neg news along with mer. I have a 30 chart Fin pg broken up by groups. Helpful to see the ttwists and turns. Some good premkt downs: dsw hurn rbn arun schl. Fertilizers were dn solars u premkt

bl said...

or...SHORT at the open some of the orcl software type stocks: intu bmc prgs lwsn adbe ca nuan