Woke up today with the ambition of a green day. Didn’t even bother with the pre-market, because I was going to be sticking to my Trading Plan. Trade only the Upward Thrust alert system that I use in the simulator.
I went out for a walk at 7AM while listening to an audio book about investing. This is a new habit that I want to form to help me with my Day Trading. I figure if my blood is pumping and I’m a bit tired from the exercise, I can sit longer at the desk and focus more at what I’m supposed to be doing.
The only thing I was focus on this morning was to make a profit like I do from the simulator.
The Alerts came in like usual, at 8:40. The First one was actually $OSTK, which I was looking at because of the move it has been making this week. Nothing but green daily candles for the past 4-5 days. I was going to enter the stock cause it was moving up in the 1 minute chart, but I didn’t want to deviate from my Trading Plan, Only Trade stocks that meet the requirements from my Upward Thrust Alert system. As I was watching the 1 minute chart and the level 2 of $OSTK, I heard the ding of the alert and surprise, surprise. It was the stock I was looking at. So I Jumped in, with out hesitation. And placed my stop like I’m suppose to. But with in less than 5 minutes, I got stopped out and I was down for the day.
If, I would have just stayed calm and waited for the next 5 minute candle to form, I could have have a nice green trade. But because the previous days, the stock just continued to move upward with out a pull back, I figured it would do the same. What I also didn’t realize, was that the $SPY was pulling back as well. And that should have been a sign to pause and wait for the set up to form. But I didn’t wait, and I lost the trade. The issue with losing right away, is that I hesitate more to get in one more time.
Another stock that moved into my alert system was $FNKD. I made the same mistake with this stock just like I did with the last one. As soon as the alert came in, I jumped in with out hesitation. Placed my stop and sadly was immediately stopped out.
That was 2 red trades in less than 10 minutes.
2 red trades back to back is as much as my newbie heart can take. I could not trade any longer. I sat and watched both stocks move up pass my buying point into the target gain that I wanted. It was completely devastating for me. The first day back trading real money and I screw it up.
WHY?!
Well after reading my book, “Mastering the Trade”. I learn that I was chasing profits, instead of waiting for the right set up. Which is very eye opening since I can see what actually happen after I was stopped out. Hindsight is always 20/20.
Both stocks provided good setups after the alert. All I had to do was wait and follow my trading plan. Trade the set up not the potential profits that could come out of the trade.
Tomorrow is another day. I had my stop and I know that having the discipline to keep hard stops and keep my loses low, will help me keep the habit of surviving and trading another day.
The last thing I want to do is not have a stop at the wrong stock and lose more money than I am comfortable with.
So even though it was a Red Day. And I lost money in the market. I did manage to keep my loss low and I am going to be able to trade tomorrow. Which will allow me to practice the lessons that I’ve learned today. Keep to the plan, have a stop, and wait for the set up instead of jumping into the trade as soon as the alert dings.