Hmmm, that was an interesting day. There's lots of stuff I could throw in here, especially about the early part of the day. But, I'll try to keep it brief because I have to cut the lawn before a 6:30 pm meeting. I am still inclined to use my old method but I am trying to refine it in a way that works for the momo trading I am trying to learn. I find that a combination of the entry triggers from the old method are still valid and can be used still, as long as I am careful about adding to losers if I am not close to a reversal on my entry. I found today that for the most part, I was able to stick to my stops. My losers did rise in number however, but 9 of the 13 were under 12 cents per share; my mental stop amount for today. A couple really got away from me. This is day two of the focus on trend and it will take practice to manage: one early loss was nearly 47 cents, two others were 17 and 17.5 cents. If I had managed to keep the four losses which exceeded today's mental stop at the max of 12 cents, I would have added 48 cents onto my gain on the day. Discipline, discipline!
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Another item of note today was how quickly I was exiting my winners. With my "insurance policy" in place in the form of my stop, I was free to let the winners run. However, I was much too quick on the trigger. Too bad, because today was a super day for trending in SKF and GS; the two I paper-traded. Without precise numbers, I see eight good or very good entries (early in a trend) which I bailed on. I plan on calculating later just how early I was in relation to the whole move as well as how much I took as a percentage of the moves. On one of my final trades, for example, I was long on SKF for $41.70 at 3:05pm. This was within 5 cents of the low of the entire afternoon. I sold with a gain of 6.5 cents in less than a minute. I pretty much turned the best trend of the day into a tiny scalp. This trade never touched my stop. In other words, had I just let it run and kept my stop in place, the 6.5 cent gain could have been as much as $1.92 per share and that's if I didn't add a position onto it. That's the most egregious of them all but there are others. Day two: much to learn but I am encouraged by what I saw. Of course, I was aided by some nice action in the markets. Flatter days like yesterday are less forgiving.
-Gotta cut all losses with stops, gotta let my winners run, gotta focus on entry and exit triggers.
For the record, I will now be counting my winning and losing trades based on the entire position, not on the individual trades which may make up that position. If two trades yield a gain when I close the entire position, it is -counted as 1 for 1, a 100% win rate percentage. Same for losses.
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17 for 30 winners; a 57% success rate. Gain of 77 cents per share in 6.5 hours of trading.
