What went wrong with these charts

[tradingdime]

Hi All

I am asking for a helping hand from your experience, i finally did my first trading ever and it was a 100% failure i picked up 3 stocks (AED,MND,BKN) in ASX on my analysis.
I could only get in to BKN and MND both i stepped out with a loss i placed my analysis and charts in my first trading journal.

1.It would be great help if you guys can point out why my analysis was so bum even though i did it as i read in many of the exp traders books.

2.Although AED moved up, my order did't get executed as i placed an order at 1.175, i was wondering if you guys place an order at market instead of a value or how would you decide what price to place an order. I found my self buying BKN and MND too high. and so was the loss

Any help/thoughts would be greatly appreciated.

 

[sw0rdfish]

1) Always place your stop/loss
2) As i can't really see clearly the pictures, what other indicators did you use? Don't rely on moving average and volume only. Use a combination of candlestick patterns, bollinger bands , MACD, RSI etc
3) Always wait for confirmation of supporting signals/indicators before putting in a trade, be patient.

 

[Chorlton]

Hi All

I am asking for a helping hand from your experience, i finally did my first trading ever and it was a 100% failure i picked up 3 stocks (AED,MND,BKN) in ASX on my analysis.
I could only get in to BKN and MND both i stepped out with a loss i placed my analysis and charts in my first trading journal.

1.It would be great help if you guys can point out why my analysis was so bum even though i did it as i read in many of the exp traders books.

2.Although AED moved up, my order did't get executed as i placed an order at 1.175, i was wondering if you guys place an order at market instead of a value or how would you decide what price to place an order. I found my self buying BKN and MND too high. and so was the loss

Any help/thoughts would be greatly appreciated.

Hi Dime,

Can you post some charts as this will allow myself and others to offer some specific help.

Until then, here are a few observations:

1. Having 3 lossess in a row does by no means equate to a losing strategy. If you don't realise this, then stop now and spend some time learning the game.

2. Why did you purchase these particular stocks, why did you place your stop where you did? What was this decision based on? Clearly, it wasn't based on experience (as you stated you are a beginner....no offence meant) , so what was it based on? If it was based on someone's else's comments, then how do you know that this is a sensible place?
Without prior experience on watching price action, you are limited in your choices. One option is to spend time backtesting ideas. One of the benefits of doing this is that you quickly begin to appreciate what works and what doesn't.

3. Ideally, you want to choose stocks which offer a low-risk set-up. If you don't know what defines a low-risk set-up, then again stop trading now.
IMO Missing an initial move and jumping onboard late is not always a bad thing. I know a Trader who regular states that the more slippage he encounters on a particular trade the better it is as it suggest that a powerful move in underway.

One positive point is that you are recording your trades in a journal. This is important as you will be able to review them at a later date.

Out of interest, do you have a Trading Plan, and if so what does it include?

Chorlton

 

[Chorlton]

Don't rely on moving average and volume only. Use a combination of candlestick patterns, bollinger bands , MACD, RSI etc

My own belief is that for anyone new to Trading, focusing on the relationship between price and volume toegther with S&R would be of more benefit than relying on indicators (which by their definition) are only derivatives of price anyway.

Indicators won't teach you why price moves the way it does..... Understanding this concept is key to devising a profitable strategy IMO...

 

[sw0rdfish]

Indicators won't teach you why price moves the way it does..... Understanding this concept is key to devising a profitable strategy IMO...

what i am trying to say is coupled with moving averages/volumes, these other indicators can help "confirm" a trade. More variables that "confirm" a direction, increased probability of winning. Of course, when choosing stocks, fundamentals are also important besides technicals.

 

[Chorlton]

what i am trying to say is coupled with moving averages/volumes, these other indicators can help "confirm" a trade. More variables that "confirm" a direction, increased probability of winning. Of course, when choosing stocks, fundamentals are also important besides technicals.

Thanks a fair comment, as long as one chooses indicators which complement each other.

My apologies for misunderstanding your point.