Yesterday I traded GS. It was a second day play following their earnings release on Tuesday. GS has been showing signs of life recently, and after observing Tuesday’s price action I was fairly confident it could trade up to 160. And perhaps over the next two weeks up to 170. We discussed GS in the AM Meeting and I clearly outlined the my initial buy area of 156.50 based on prior afternoon support. One of our traders who had been trading it the prior day pointed out that it had an explosive move from 155 and it would be a great potential pick up at that level as well.
Here is an outline of the trades I made and how I lost money. You will see some of the traders were actually missed trades. It is always easy to find excuses for missing trades but the reality is that if you are at your trading station there are no excuses.
- Initial buy at 156.52 with nice bids in the mid 40s. Popped up a quick 75 cents so sold some but eventually stopped out of position below 156.25
- Watched it trade all the way down to 155 where there was an identifiable buyer at 154.97. Quickly moved away from this level and I was not aggressive enough to get long at higher prices.
- Selling pressure at 156 and stock was still in a downtrend from prior afternoon so hesitated to buy on the break above this level
- After seeing confirmation that the momentum was back to the upside I bought on a pullback from 157.75 to 157. Placed my stop at 156.89 and left the desk. Stop should have been below 156.80 but I bought a bit too much above 157 so gave it less than the appropriate risk.
- During the next 30 minute 156.90 established itself as clear support but was not at my trading station
- Returned to my trading station at 12:15pm to prepare for Stocktwits.tv. Right as I began to broadcast GS breaks above premarket resistance of 158 🙂
7 Comments on “Why I Lost Money In GS”
I find this very encouraging in that if an experienced and successful trader as yourself still has these money losing trades then my losses are easier to deal with. Thkxs for sharing. Its easy to share our winning trades.
You really make me feel better, I was under the impression that I was the only one having this miss entries and stop losses. Thanks for sharing bad trades and not only your winners like lots of traders do on their sites when offering their products. This is why I’m following just few of professional traders.
Great stuff why one can have the right bias but lose and how important accurate execution without hesitancy and second guessing becomes.
Cheers,
Markus
I can definitely see the frustration at getting stopped out in a stock with a high likelihood of short and long term growth. This reminds me of the idea of having accounts for different time frames and of whether their respective strategies can be used together to trade one account. If a stock is expected to show long term growth and is trending upward, should the trader brave a sudden downturn if it means a portion of her capital might be tied up for several extra days, or is she risking catastrophic losses by not cutting them sooner? It might be profitable to extend our time horizons or to set deeper limits in the better stocks we buy, though I’m not sure what the opportunity cost of that would be. I suppose that depends on the accuracy of one’s stock picks.
Honestly, I don’t see enough reasons to take any of those trades – both your actual trades and the ”missed ones”.
Except, may be the statement at the beginning – ”after observing Tuesday’s price action I was fairly confident it could trade up” – may be you can explain in future post how can I learn to be ”fairly confident” about the direction the stock is going
thanks
Nice. Shows why daytrading is a loser’s game. On the other hand if you had paid more attention to the daily chart you wouldn’t have missed a nice bar with good volume on Oct 1st after 6 days of consolidation on low volume. MACD histogram had just ticked up and an order placed above the close would have been triggered the next day (I was stopped in at 147.75; yes near the highs of the day but so what, I don’t play for pennies, I play for dollars). The beautiful move from Oct 4th to the 21st is there for everybody to see. A stop-loss below the lows of Oct 21st stopped me out of the trade yesterday. Just over 10 points… On to the next one…
thanks for all the comments. the smb trading blog is for those who are interested in short term trading which includes all levels of trader from complete newb to 10+ year veterans.
certain posts such as this are more tailored towards traders with a bit of day trading experience who understand intraday price action, the tape, and technical analysis.
i would be happy to offer a more clarification on a few of the potential entry points in a future post.