Yesterday one of our new traders stopped into my office frustrated, looking for a pick me up and wisdom. I provided neither….. purposely. And these moments are always a little awkward as the trader waits for the wisdom and I purposely withhold. I imagine them wondering I think I just stumped Bella. Often I will change the subject, in this case to running, so the moment is not so awkward for the new trader. (I know I won’t be providing any answers so it’s not in anyway uncomfortable for me.) But still no answers will be forthcoming.
There was nothing to fix. No glaring mistakes to identify. It was just one of those trades that didn’t work out.
Today I got an email from a Russian reader asking how he could have added better to a position. Again there will be no answer.
The new trader was in some stocks that just did not work out. The reader did the right thing, took a loss, and sometimes that is just the way the ball bounces.
Here was that email sent to me:
Hi, Mike! Thank you for your time.
I’m learning to trade and trying to master trades2hold, because this type of daytrading fits my calm personality. FDX had fresh news, gapped up a lot, has a history of multipoint moves on heavy-volume days. So FDX was my candidate. I watched it from the Open, stock holded the gap, the 82.10 level and after 10 am started to consolidate between 36 and 70 c. At 10:20 I bought 300 shares 43c, stop below 30c. Market was rather strong, transportation sector was strong as well. So my initial target was something about 84.50. Stock slowly started its uptrend. It broke Day High 83.15 touched 48c and came back to breakout price. Here I bought 200 shares. Than FDX got back to Day High, breached it not so impressive with only 2-penny move, and stalled in front of 83.50. When buyers started to hit 83.50 offers aggressively so I bought 200 shares just to get the better price on probable breakout. Suddenly the bids dropped, so I had to hit out 200 shares, I’ve just bought. After that small shakeout 50c were done, and I bought again 200 shares at 55c. So I had a position of 600 shares with avg price 83.28. And stock returned to my avg price and I hit out the whole position, as the right stop was too far, below 83.10 as I see. Than in midday at 13.10 I spotted a held bid at 77c, and bought 300 shares 82.81. Stock went up 50c and than came back and hit my stop at 75c. Finally I tried to trade FDX on the close. Market got weak, FDX returned to that 82.35-40 level, where it stalled in the morning before the upmove. I bought 300 shares at 45c, and 200 shares a few minutes later above 50c. So I had 500 shares at 82.48. Stop was dopey 82.40. Stock took my stop and went up a point. So I made some volume, and almost no money 🙂
Today I traded LXK. I saw on lvl2 huge prints at 38.00, market was downticking, LXK held the bid. So I bought 300 shares at 38.05. My target was 39-area. LXK spiked 60c and came back to 45c. I bought 100 shares. Stock got back to my average entry, so I hit out.
I must say, I’m unable to read the tape. I’m trying to develop this important skill by watching the tape of the stocks. But for now my tapereading skill is poor.
Here, in Russia, we do not have professional daytraders of your level, so your blog and videos are the only source of daytrading wisdom for me. Also I read some other blogs, mostly via Abnormal Returns Links, but your blog remains the basic thing.PS Two days ago I purchased your book “One Good Trade” via Amazon. Awesome reading, I must say!
Bella Responds
1) Excellent job of sucking up to me here 🙂 That will definitely earn a response.
2) As I mentioned in my blog yesterday I got shaken out of 2/3 of my position in a FDX trade as well.
3) FDX has multiple shakeouts that just did not allow us to stay in based on our shorter time frame. Though the action today would have stopped out almost all as well. Maybe that makes you feel better?
4) Sometimes your trades just don’t work out. The stock doesn’t do what you need it to do to make money while still controlling your risk. Aint nothing but a trading thing. Oh and apparently I should be stretching after I run and not before.
