11/11 – No trades and losing trades

I Started my day trading career with Tim Sykes, where I learned the basics of high risk day trading. When I wanted to learn more, I joined Investors Underground. They opened my eyes to new setups and gave me a wider scope of the markets. The DVD’s that helped me the most were Tim Grittani’s Trading Tickers and Nate Michaud’s Tandem Trader.  I use FINVIZ to scan for stocks for my daily watch list. Click on the highlighted links for more details. For my main page, please click here: Day trading for beginners


 

Introduction

How can I put this honestly? In this market I find it difficult to find the right setup to trade. And, to add to this as a short biased trader, you also need ramps, pushes and parabolic moves to short into. These are quit rare at the moment. Shorting falling knives is as dangerous as buying a breakout. Support and resistance are no joke and should be respected. Always take support and resistance into account when planning a trade. Otherwise a setup will bite you in the butt. This happens to all traders and is nothing new. So try to integrate support and resistance into your risk management.

Watchlist for the previous weeks: TRXC, GLUU, CZR

My main watch during these two weeks were a combination of TRXC, CZR and GLUU. The setup was pretty much the same. Pre-market spike, short either a fake out at the PM resistance, followed by a stuff move (heavy selling) or short into PM support failure. In both cases I was aiming for a wash around the previous days low.

CZK was on of those plays that worked perfectly. I shorted the previous days high, which was also the pre-market high (which confirmed my bias), however, I covered at the previous days low (my target was met). The stupid thing was, that I thought CZR had move room to fall lower (FWIW, $9.30 was the resistance that day). Greed took over and bias too. Also the news at the time spelled nothing good for the ticker. Yet CZR held like a boss and held that $9.30 seven times! And every time I was stopped out, I re-entered little stuff moves which sucked me in. The ticker was in a channel and my bias kept saying CZR should break $9.30 and when she does I would double my gains! Which never happened! In the end all the gains of the day were washed away in a stream of $9.50 minus $9.30 moves. I entered $9.40, CZR touched $9.30 and jumped back to $9.50 and stopped me out. In the end I gave back all my gains and then some, leaving me with a damaged account.

GLUU is a similar story where I shorted pre-market highs, made my gains and gave it all back!

The clue here is that you need to set certain goals. When they are met. leave the desk. The trap here is that daily gains gives you a false feeling of room for trading. My risk return ratio is 3 to 1. Meaning, that I cover my positions with either 3 times my stop loss level. A 3 to 1 ratio means that one gain will cover three losses. When you have a gain, you will have 3 to 1 daily range. So to reach an actual meaning full loss, you will need to be stopped out 6 times. Which leads to riskier trades and eventually you (me, in this case) giving back my gains to the market.

Do not forget the house always wins. Your broker makes money when you lose as well as when you win. They don’t care which way you go.

I am battling two things. 1) bias and 2) greed. I am in a losing streak at the moment and its killing my account. I don’t mind losing too much, its part of the game. However, we should not be trading bias, with greed. The market is always changing and we need to adjust accordingly.

TRXC is and will always be my baby. I was chasing her on Friday, because I missed my entry. I left the desk when nothing was going my way (thus I didn’t trade). I should have seen that $3.10 being reclaimed. These opportunities happen all the time, yet being biased all the time, kills my trading. In hindsight, I should have been patient and trade 3.60 and cover at 3.20. But thats hindsight for ya. Always showing opportunities after the fact.

FNSR

FNSR was also on my radar last Friday. This ticker was up on news, but seemed like a stock with a lot of bag holders. More important, this ticker had the same setup as GLUU and CZR. Pre-market spike and lower highs from there. The reason I didn’t trade this ticker was because the spread was too wide. Also, the price action was crazy. Seriously! She kept jumping and dropping 20 cents, easy! At one point FNSR jumped 50 cents in a few seconds. These moves are no joke and I cannot trade a ticker with these crazy moves. Especially when you are new to the game.

A wide spread can be seen on level 2. This means that there is a lot of room between the bid and the ask price. In the case of FNSR, the spread was 15 cents at some points. Which means that the bid price was, for example, 22.15 and the ask price was 22.30. This means that your stop loss will be triggered, almost instantly, if you want to short that 22.15 and have a stop loss at 22.25 (if the ask price is triggered/touched/bought/sold). That would mean, however, that you should be using smaller size and wider risk/stops. But that is up to you!

UP COMING WEEK – SGMO – FOSL – AMRS

These tickers have made strong drops on Friday so I will be looking into any PR or ramps / parabolic moves to short into. They don’t seem to be tickers, with losses taken into account. My expectation is that they will hold many bag holders, who will sell at any spike provided. Also looking out for chaps that want to play these tickers for a gap fill. They seem to sell as soon as things aren’t going there way (they have quick, slippery hands).

Some tickers have losses taken into account. This means that Institutions have taken losses into their accounts already and this might trigger a change in direction. The thing is, is that retail traders are always trading after the facts. Which means that retail has no clue as where a ticker is going. The big boys (market makers, smart money, large accounts, banks ect.) know EXACTLY where a ticker is going. Their computers hunt for opportunities. Retail doesn’t have a chance really.

Closing arguments

I am down a bit overall and I keep trading with the same bias and making the same mistakes. This is something I need to work on. We want to make it as a trader, but you also need to understand the market risks. I know what to do and how to change it. If I actually change and learn to go long is up to me and the markets.


 

SERVICES THAT CAN HELP YOU

For trading large and mid caps is hot business, Tandem Trader offers some insight on how to trade them.

Kindly click the following link here for more info on Tandem Trader:

Tandem Trader DVD

Also, if you are interested in short selling, you should check out Trading Tickers, which contains two important strategies 1). shorting parabolic moves and 2). buying breakouts.

You can find it by clicking the following link:

Trading Tickers

I hope you enjoyed this blog entry! As always, feel free to share this post!


If you are interested in Investors Underground and would like to learn more, please click the link here: Investors Underground.

  • kindly note here that this should not be treated as advice, trade advice or any of the sort. Always trade your own plan, cut losses quickly and never follow any alerts. Always do your own research!

 

 

 

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