Lost money...

Before someone asked me to, I thought I would post my last two (money losing) trades.

URBN = Entered this on a pullback after the daily high of the previous day was broken on Nov. 23 (pink dot).

Stopped out on Nov. 30 when stock failed its support level. It might be setting up to be a good short candidate. I completely ignored the huge volume of sellers and the MACD crossover high on the indicator chart.


VRTS = This one burns me up. I entered on Nov. 17 (pink dot) on large volume with the stock breaking a resistance level. All looked good (other than it being over extended).

On Nov. 30, I noticed that the stock lost all of it's gains for the day making a "Gravestone" doji. This caused me to tighten up my stop to just under $22 and got stopped out before the close of the day. The kick in the butt comes at the open of the very next day when the stock ran from where I stopped out up almost $2 and seeing nearly another $2 gain on top of that. Grr. A stop at $21.49 would have been fine. Hind sight is (usually) 20/20.

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*Des privately wishes (again) that others would submit charts*

Des

Doesn't a gravestone doji call the top after an up move, a sort of exagggerated shooting star? After the down move in vrts it maybe had more the characteristic of an inverted hammer which is bullish? Small consolation I know - I've got a drawer full of similar tooth gnashers!!

good trading

jon

des44 said:

VRTS = This one burns me up. I entered on Nov. 17 (pink dot) on large volume with the stock breaking a resistance level. All looked good (other than it being over extended).

On Nov. 30, I noticed that the stock lost all of it's gains for the day making a "Gravestone" doji. This caused me to tighten up my stop to just under $22 and got stopped out before the close of the day. The kick in the butt comes at the open of the very next day when the stock ran from where I stopped out up almost $2 and seeing nearly another $2 gain on top of that. Grr. A stop at $21.49 would have been fine. Hind sight is (usually) 20/20.

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Take care not to learn the wrong lesson.

There was nothing wrong with your stop assuming that you've tested your setup and found that prices that drop back into the base have a high probability of continuing the decline. Some would place the stop below the base, but, again, if you've tested this and found that such a placement amounts to giving away money unnecessaily, then your original stop was fine. Why invite fear to the party?

If there is an error, it's that you left the table after you were SO. Whatever it was that you felt at the time prevented you from staying open to what was happening in front of you, chiefly that price did not continue to fall (the dog that didn't bark). If you were to place a buy above that bar, what are the probabilities that price would take it out if sellers were in charge and in the midst of an all-out assault to the downside?

Granted, taking this trade entails ridding yourself of whatever emotions are fogging your vision so that you can be objective about the action, but this is a skill worth acquiring.

(Incidentally, if the indicators contributed to your errors, you may want to remove them)

des44,

I have a question for you concerning the trade with VRTS and it is this:

How would you have felt about this trade if, rather than go up, the price had tanked downwards and your stop was taken as happened anyway ?


Paul

I don't like the shape of the charts on both trades dessy .

barjon said:

Doesn't a gravestone doji call the top after an up move, a sort of exagggerated shooting star? After the down move in vrts it maybe had more the characteristic of an inverted hammer which is bullish?

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Hey Jon,

Thanks for posting. A gravestone doji is a doji line that develops when the doji is at, or very near, the low of the day. If you look (VERY) closely (its hard to see) next to the pink dot where I exited you'll see that the candlestick is a gravestone apposed to an inverted hammer. The only difference between a gravestone doji and a shooting start doji is the length of the upper shadow. If you deem the upper shadow to be quite long you might call the doji a shooting start and a gravestone for the shorter ones.

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dbphoenix said:

Take care not to learn the wrong lesson.

There was nothing wrong with your stop assuming that you've tested your setup and found that prices that drop back into the base have a high probability of continuing the decline. Some would place the stop below the base, but, again, if you've tested this and found that such a placement amounts to giving away money unnecessarily, then your original stop was fine. Why invite fear to the party?

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Hey Phoenix,

Thanks for posting. No fear invited to this party. The advice that you so generously submitted is also the advice I share with others. Once you make your (tested) decision to enter, exit or in regards to stop placement be confident that your decision is the best one you could make at that specific moment not allowing yourself to sponge up doubt and second guessing. Move on to the next battle.

dbphoenix said:

If there is an error, it's that you left the table after you were SO. Whatever it was that you felt at the time prevented you from staying open to what was happening in front of you, chiefly that price did not continue to fall (the dog that didn't bark). If you were to place a buy above that bar, what are the probabilities that price would take it out if sellers were in charge and in the midst of an all-out assault to the downside?

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Fantastic thought. However I would not have been open to this chart after it failed due to the subjectivity of support. What I am saying is that I entered this stock based solely on previous data and could determine a Resistance area, which I was willing to enter if it were pierced. The trading days between my entry and exit points-- things start to get hairy enough for me to look for clearer opportunities. In all honesty, the only trade I might have taken (and I say this loosely) would have been a higher high the day after it broke the 200dma. The volume would have been the deciding factor on taking that trade.

dbphoenix said:

(Incidentally, if the indicators contributed to your errors, you may want to remove them)

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Rating the importance of indicators from 1-to-10 I would give them a two in my book. Price action (charts) and volume is sufficient IMHO. Indicators can give crucial data finding divergences.

Phoenix, this will be my first winter in six years that I haven'y gone golfing in Scottsdale for a week. I was playing at Troon North and had a Bobcat cross in front of me while in at the tee box just 30 yrds away. It was incredible to experience. believe it or not, I was hoping to see a rattlesnake while out in the rocks searching for my golf balls. No luck.




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Trader333 said:

How would you have felt about this trade if, rather than go up, the price had tanked downwards and your stop was taken as happened anyway ?

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Hey Paul,
Thanks for posting. My feelings should (and usually are) ideally be the same regardless. In large part, successful trader have their emotions tapered down to that of a robot. However this may be relative to one's own tendencies. Truth be told, I get semi-excited when I have a stock rocket to the moon. And at times I will get semi-disappointed when I miss out on nice profits--especially when I get stopped out just nickles away from its blastoff.

All this said I still make decisions and am quite confident of them not allowing emotions to second guess decisions days later based on new facts. However I do judge my decisions based on the facts as they are presented to me the day I actually made my decisions. This hones skills and effectiveness in the market.

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des44,

The reason I asked is that many traders I have come across get negative reinforcement from exactly this type of scenario. For example, by not adhering to a planned stop and then finding that the trade made a profit it makes them believe that the same can be done with future trades. Of course what happens is that when the same lack of discipline is applied to a future trade they make a whacking great loss. Getting out of the poor discipline cycle, or looking back at trades after an exit has been taken, just makes things worse.

In my earlier days of trading I found the best way to address this was to never look back at what may have been once I had closed a trade.


Paul

Well said, Paul. One of the men that I trade for likes to go back and see what a stock that we have sold is doing around a week or two later. Can you imagine the daunting task I have of trying to get him to quite torturing himself?

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*What do you say? I am a bonified MEMBER now*

simple - u need to get out of all trades immediately if it doesnt move in your direction soon. these 2 large losers would then be small losers.

do u like giving money away?

be patient getting in but impatient when it dont go ur way

des44 said:

I am a bonified MEMBER now

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Is that similar to being calciferous?

Thirteen said:

simple - u need to get out of all trades immediately if it doesnt move in your direction soon. these 2 large losers would then be small losers.

do u like giving money away?

be patient getting in but impatient when it dont go ur way

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LOL....I do not give money away, but rather allow expense trades due specifically to price action gone soar. I use to practice your advice and bail out of trades that didn't go my way immediately only to find out how much money I was leaving on the table when I didn't give the stocks enough room to run. My strategy nowadays make me nice gains and fits me well. Thanks for your post.

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Roberto said:

Is that similar to being calciferous?

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LOL...I'll have to double check the dictionary on this one..

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*Must be an inside joke*

des44 said:

Hey Jon,

The only difference between a gravestone doji and a shooting start doji is the length of the upper shadow. If you deem the upper shadow to be quite long you might call the doji a shooting start and a gravestone for the shorter ones.

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Click to expand...

Hi des, interesting post again.
It was my understanding as per Steve Nisson, that the difference between a gravestone doji and a shooting star is that the shooting star has a real body the gravestone doji does not since open low and closing are at the same level.

des44 said:

LOL....I do not give money away, but rather allow expense trades due specifically to price action gone soar. I use to practice your advice and bail out of trades that didn't go my way immediately only to find out how much money I was leaving on the table when I didn't give the stocks enough room to run. My strategy nowadays make me nice gains and fits me well.

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So what was the point of your initial post?

roguetrader said:

Hi des, interesting post again.
It was my understanding as per Steve Nisson, that the difference between a gravestone doji and a shooting star is that the shooting star has a real body the gravestone doji does not since open low and closing are at the same level.

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You're right. I stand corrected.

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dbphoenix said:

So what was the point of your initial post?

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To share losing charts along side my winning charts that I have been posting. just thought I would keep it balanced. Anyone can share just their great trades. I wish more people posted their trades on here for review.

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dessy ,

in answer to your PM , the real question should be " why do you like the 3 charts ? " , then for all the reasons you liked it , use them to dislike it .

wisestguy said:

dessy ,

in answer to your PM , the real question should be " why do you like the 3 charts ? " , then for all the reasons you liked it , use them to dislike it .

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Ah, it's clear to me now. ...you're one of those kind.

Regards,
d-
*No need to reply*