Lost some money on my third real trade

[Fabrizzio]

Hey everyone,

I am very interested in if anyone can tell me if I acted late or missed important signals today on this trade.

I did look into the six months chart later and saw that a range was in effect and the day started breaking the upperline.

I stepped in around 11:00 at 5,014 and put a stop in at 4,879. The trend did pick up to around 13:30 and then started going down. The whipsaw(?) at the end ticked my stop and I lost 25,50(including the commission) on my 100 shares.

I used the right moneymanagement I think in this try-out trade, having limited the loss to around 25. But seeing the comeback around 17:30 I am doubting this.

I uploaded the daily, hourly and 5min. charts to imageshack.

ImageShack Gallery

 

[shadowninja]

I'd have been waiting for a pullback before buying ie the pullback that stopped you out. No pullback, no trade.

Also, your idea of money management isn't quite right. The stop loss is risk management. Money management is about how much to risk per trade. Usual figures of 1-2% of balance being used.

 

[arabianights]

who gives a ****? give it 50 trades to see

 

[Fabrizzio]

I see what you mean. I used the wrong timeframes too I think and did, at first ,not apply the trendlines, but used MACD and the EMA on the hourly chart. When looking for a trade on a stock, is it a certain sequence one follows? First applying the trendlines and to verify an expection with MACD or Stochastic?

Still have a lot to learn in reading the charts and will mostly stick to papertrading. ( definitely do not want to end up like that guy on youtube... funny in a very unsettling way..)

About the money management, you are right offcourse. However with a small account, wouldnt the commission alone kill me on such small trades? I pay a min. of 6 EUR per trade so with amounts below EUR 500,00 the stock will need to do a lot before i am off the red.

I am saving up for a more mature account and hope to be operational in 2011. Will give me the time to learn a little.

Thanks for the feedback Shadowninja!

 

[arabianights]

Look...

DO NOT READ ANYTHING INTO ONE TRADE. THREE TRADES ARE NOT A SAMPLE.

 

[Fabrizzio]

Thanks Arabiannights,

I know and will be expecting a lot more losses in the future

I have been papertrading alot though, but occasionely do a real trade.

Want to know if there are obvious mistakes that I making and learn from them.

 

[shadowninja]

Yes, if I was trading your style, I'd put the trendlines down first before relying on other signals to determine an entry.

Google for livewithoscar; I think you could learn how to tweak your system from him. He uses patterns plus various indicators.

 

[bfirth]

my point which may not be particularly helpful is, if you trade 50 paper trades and one live trade which trade do you think will lose?
trade everything paper then everything real money but tiny size, this helped me create a balanced viewpoint, the inevitable losses are cancled out by the, hopfully larger profits.
cheers bry

 

[Charlton]

Thanks Arabiannights,

I know and will be expecting a lot more losses in the future

I have been papertrading alot though, but occasionely do a real trade.

Want to know if there are obvious mistakes that I making and learn from them.

3 real trades

Lots of paper trades

Are the real trades any different? If not then its one loss in many trades

If the 3 real trades are different ? Why ? Do you feel something different ? Do you act differently ? Do you follow exactly the same strategy as the paper trades ?

3 real ones are not enough for any kind of statistically sound analysis.

Read Douglas - Trading in the zone

Charlton

 

[Fabrizzio]

Thanks for all the sound advice! It is not a general performance measurement I was aiming at, but more of a discussion on my approach to individual trades.

Learning to interprete the indicators and patterns gives me alot to learn and think of even on this level. I can understand that for most of the experienced traders a loss is a daily occurance, but reading the signals & correct use of indicaters is something I myself am trying to understand better.

About the papertrades and the differences with real trades is that I definitely stay on board when a good stop is available. I let my desire to succeed get in my way. Something I will be facing many times in the future if I am not wary of it.

With a papertrade, the amounts traded also differ that much, that small point gains still let me walk away with a profit. In a real small actual trade, the commision alone kills the chance for a profit on tight ranging stock.

Also trying to find my market. At the moment I do not have the means to heavily trade the US stocks because of the regulations on pattern daytrading. And I am looking to find good EURONEXT stock that qualify for daytrading.




I see that alot of the users limit themselves to only one indicator.

 

[Black Swan]

TBH I'd give it up as a bad job, unless your first 100 trades are big winners you'll never make it

 

[Fabrizzio]

Hehe, my thoughts exactly. I am safely betting red at roulette now and made my first million last night

Black swan, didn't I read something about black swans in "Welcome to my trading room"?