The Stock Market for Beginners
Sometimes I can't believe the mistakes I make. This weekend I vowed to hold my positions to their target and avoid trailing stops. The two trades detailed here are obvious examples of how I broke that rule. I wanted too desperately to keep my profits and I placed my stop along the 20 EMA instead of shooting for my targets (blue arrows). For the day I lost 1.82R. Crud.
I was glad to see that the market didn't scream forward again today. I think this pull-back is healthy. I have no idea where we're headed, but it does seem like all the rules have changed. Crazy times.
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5 comments:
Scott, where do you get your setup ideas from? Obviously, you are trading bull and bear flags using intraday signals. Are there a few stocks on your watchlist that you scan intraday for the setups or is there some sort of scanning system that you use? Thanks.
Dude, be really careful on risk management and sizing. This market is getting nasty due to SEC changes and volatility due to the proposed bailout. Citi could be insolvent for example and they would shut trading if it imploded.
I never thought they would ban short selling...re-instate the short uptick maybe, but not a ban that has now extended to included GE, GM and MCO (which I am short!). The system is closer to the Black Pterodactyl, never mind black swan, than I ever thought possible.
I am taking most of my trades off except for buying some GLD and UDN. This is a scary market and it is 10 times more scary for the credit markets which most equity traders don't understand.
One black swan trade I am thinking about is deep out-of-the-money puts on C expiring in March.
My 2cents worth...
Anonymous,
My trade setups come from a few different places. I monitor stock screens (like the Zweig screen) every day. I also look over the highly volatile stocks on Barchart. Several of my trades lately have come from consolidation breakouts found using Trade Ideas.
SC,
I appreciate your concern. I am trying to be careful because who knows what could happen. I feel for the shorts who got hammered unexpectedly by the SEC ruling.
If ever there was a market to day trade, I'm thinking this is it. But it is still a bit (maybe very) risky.
I totally agree with SC. Many times when you watch FOX Business or MS NBC, the stock gurus are asked about a list of stocks. It seems that very rarely do these "experts" say that you should sell a stock or not buy it. If you listen to these guys on a daily basis you will get the impression that the stock market is always just about ready to soar. Of course there are exceptions and not every analyst is that way but in my opinion most of them are usually positive in their stock market predictions.
Being careful and being vigilant is the best option the investors have at this point.
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