Bad trade or bad luck?

[megamuel]

Hello all just posting this to get some constructive criticism. Hopefully some of the experienced traders can tell me where I went wrong.

Ok, so I identified a stock that I thought was in an uptrend - bg. in this case. I use a weekly MACD in Sharescope to help me find these. I then look for it to be oversold in the daily stochastics for longs. Note I only use indicators to help me find setups, I don't use them to enter at any specific values shown by the indicators... So at the end of the 15th of Jan (Circled candle) I deemed that the stock was in an uptrend and had pulled back to the support zone as indicated by my trendlines. I decided to place an order to go long if the price went above the high of the previous day and therefore continuing its uptrend. In this case the order was entered just above the high on the 15th which was 896.2 This was hit on the 16th. I also entered a stoploss below the low of the 15th + the spread. I like to add the spread because I have found that sometimes upon opening trades they would be very close to my stoploss already because of the spread. In this case the stoploss is shown on my graph by the line drawn at 847.2 I also entered a limit order at 945.2 - also shown on the graph. As you can see the trade has a 1:1 risk reward because I thought the probability of hitting my target was higher than hitting my stoploss because I had waited for confirmation that the uptrend was continuing.

Are you still with me? Good.

The next day, as you can see the price went up to my limit but my order wasn't triggered because due to the spread the sell price never reached my limit It all went down hill from there and came down today and reached my stoploss . So did I pick a bad trade? Did I make any fundamental errors? What did I do wrong? How could I have done better? I've only been trying to trade like this for a week or so now and had mixed results. Its based on Elders tripple screen strategy where he identifies a longer term trend then waits for a pull back. Any input would be great as long as it is constructive.... Remember I am very new to trading so what might seem obvious to you will probably not to me! Thanks in advance,

Sam.

 

[everyonerich]

is that a TICK CHART?

 

[foredog]

Trail your stop so as if it goes to 50% of target then stop loss moves up to half way.

Have an alert so if it's within a few pence of your target you're alerted so you can watch it or move stop up to near your target, don't miss it for a few ticks....

just a couple of ideas, depends if you're near you're computer all the time or not....
hope this helps a little

 

[Jaydee]

A bit of a combination of the two I think. You made a good entry and had a decent stop - I don't like 1:1 myself but if it works for you that's no problem.

You were unlucky not to get filled on the limit order. However, the trade was poorly managed when the market rebounded from the target point. You do need a back up plan for when targets are not hit. What foredog suggested is a good idea - essentially, you need to work out what percentage gain is worth protecting with a trailing stop at the risk of not reaching the target because this kind of stop may get you out prematurely (if that makes sense?). I, personally, find this is one of the most difficult scenarios to solve regarding trading.

 

[fibonelli]

The main problem is that if the main market is generally falling, it is difficult for any long position to perform.

I also don't like that large downbar slicing through the prior swing low. There must be loads of dead bulls ready to bail out above, say, 920.

 

[megamuel]

Hi guys thanks for the advice. Yes I guess I should have trailed the stop loss or at least moved it to break even. Unfortunately I was unable to monitor the trade at the time but I am working on that problem!!! Fibonelli, please could you show me what you mean by "...that large downbar slicing through the prior swing low". Appologies - as I said I am new to trading so not quite sure what you mean there. Thanks again,

Sam.