Bought TOX - Trade Managment Tips needed

[andrew_c2o]

Bought TOX- Trade Managment Tips needed

I bought TOX on the 12th at .042 at point A on the chart, now 2 days later it has dropped to .036 right on the trending line up, I should've known not to buy it so high above the trend line, it was too steep. I bought it because the short and long term moving averages indicated and still do an upward trend, today would've been the better day to get in.

Down 4% of my overall capital cus of this trade, i'm scared to hold onto it even though I'm convinced it will go up tomorrow. Any advice much appreciated!

 

[Mofra]

Re: So i bought TOX

Did you have a stoploss set before you placed the trade? If so there is no conundrum. If not you should be more worried about your trading plan than the result of one trade.

 

[davo_best]

Re: So i bought TOX

Today was a bad day for tox, but those who wait shall be rewarded. If you want to offload at breakeven I would recom that you hold off for a couple of weeks until the profit forcast is out then sell.

 

[RichKid]

Re: So i bought TOX

I bought TOX on the 12th at .042 at point A on the chart, now 2 days later it has dropped to .036 right on the trending line up, I should've known not to buy it so high above the trend line, it was too steep. I bought it because the short and long term moving averages indicated and still do an upward trend, today would've been the better day to get in.

Down 4% of my overall capital cus of this trade, i'm scared to hold onto it even though I'm convinced it will go up tomorrow. Any advice much appreciated!

I can't see how you let your losses run to over 2% of total equity, do you have a stop? (but I guess I've done it too so I shouldn't be so smart about it). Also, if you've drawn a trendline so clearly why did you not wait for it to return to the trend path for a safer trade? I guess you use the MMA's more than anything else.

I can't give financial advice as I'm not qualified to. It's a shame you didn't have a stop loss strategy in place. I guess you could look at this trade afresh, as if you'd just entered it at the current price. I normally try to take a loss as soon as my trade goes wrong but you should follow your trading plan.

There's lots of info here on trade management and stop losses, just do a search using the search tool. Good luck and don't stress too much! It's only money!

 

[GreatPig]

Re: So i bought TOX

if you've drawn a trendline so clearly why did you not wait for it to return to the trend path for a safer trade?

In my experience, it seems a watched stock never returns to the trend line until after you've bought it

And then, often as not, it breaks trend and keeps falling...

GP

 

[andrew_c2o]

Re: So I bought TOX

Thanks for the advice

I do set stop losses and it is now 1cent above it, i based the stop loss on the trend line alone. I'm still learning so I don't know all the tricks yet! Luckily I'm only paper trading this I find that paper trading can help a great deal with your strategies, if your just reading and learning all theory it's not as effective

 

[RichKid]

Re: So i bought TOX

In my experience, it seems a watched stock never returns to the trend line until after you've bought it

And then, often as not, it breaks trend and keeps falling...

GP

Yeah, if only the stocks knew the TA theory we'd all be ok!

 

[ob1kenobi]

Re: So I bought TOX

If you have a trading plan, stick to it. You may want to revise it in light of this experience. Is your trading plan on paper or is it still being worked out in your head? I find it needs to be on paper and refined regularly until you develop a trading strategy appropriate to you. Any trading plan should include how long you intend to hold before trading, what triggers a trade and what your stop loss as a percentage of capital going to be. Trade to your plan.

 

[andrew_c2o]

Re: So I bought TOX

Ah yes a bounce away from the trendline, still down but not as much

 

[RichKid]

Re: So I bought TOX

If you have a trading plan, stick to it. You may want to revise it in light of this experience. Is your trading plan on paper or is it still being worked out in your head? I find it needs to be on paper and refined regularly until you develop a trading strategy appropriate to you. Any trading plan should include how long you intend to hold before trading, what triggers a trade and what your stop loss as a percentage of capital going to be. Trade to your plan.

I agree completely with Obi, also see why you are allowing yourself to lose over 2% of total capital via your stop loss and if that is appropriate. Again, lots of info if you search asf for answers.

 

[andrew_c2o]

Re: So I bought TOX

Yeh after reading around everyone seems to mention that finding an exit point seems to be one of the harder things. There is no perfect science to it but I have thought of this strategy:

Exit always at 10% profit or whatever level you want but stick to it, this is kind of like to sticking to a 2% exit loss rule. Now you may miss out on alot of profit as it could keep on going up (you could do a re-entry) but you have also protected your profit as the stock could have gone down. Now if you continue to make 10% profits it's gonna ad up in the end!

I would be interested to see what people think of this.

 

[mit]

Re: So I bought TOX

Depends on your strategy but everything I have backtested on medium term systems in shares have shown that taking profit reduces profit. It is the occasional share that screams along that gives you the profit.

I ran a longterm system for two years and plotted the profit distribution and found that around most of the profit is generated by the few shares that really outperformed.

I think that this is why most people find it hard to trade. They trade a system for a couple of months and follow the rules and find that they are barely breaking even even though this is pretty much what you should expect. Of course they get frustrated and start taking profits and not taking losses and really go down the gurgler.

MIT

 

[ob1kenobi]

Re: So I bought TOX

Yeh after reading around everyone seems to mention that finding an exit point seems to be one of the harder things. There is no perfect science to it but I have thought of this strategy:

Exit always at 10% profit or whatever level you want but stick to it, this is kind of like to sticking to a 2% exit loss rule. Now you may miss out on alot of profit as it could keep on going up (you could do a re-entry) but you have also protected your profit as the stock could have gone down. Now if you continue to make 10% profits it's gonna ad up in the end!

I would be interested to see what people think of this.

The fact that you have made a profit and have decided to take it (at 10%, 20%, 30%!!!) means you have accessed money you previously did not have. Whether the stock goes up or stays at that level, you've still made a gain. That after all is I imagine the objective. Trade to your plan!

 

[andrew_c2o]

Re: So I bought TOX

Depends on your strategy but everything I have backtested on medium term systems in shares have shown that taking profit reduces profit. It is the occasional share that screams along that gives you the profit.

MIT

Interesting MIT that would go in hand with what people have been telling me that good traders may loose more times than win but they are small loses and their profits come from those few winners.

 

[Bin57again]

Re: So I bought TOX

Andrew
10% profit is fine IMO if it's gross (i.e. allows for brokerage costs) - otherwise I aim for towards 15%. It's amazing how expensive brokerage costs are to your trades. Add in the cost for conditional buys/sells and you've got fees of $75 for a round trade (enter/exit). 10 trades = $750. Read Leon Wilson's Next Step to Trading on this.
See my post from Friday on volumes re JBM and RIN. Your chart indicated a spike or blow off on volume, which I would have expected would lead to a retracement. I would have looked for the bounce off trendline. Guppy and Wilson also talk about bubbles on MMA which is good advice. Of course, easy to spot in hindsight!

 

[andrew_c2o]

Re: Bought TOX- Trade Managment Tips needed

Thanks Bin

I agree the volume would've been good to look at it was far above the average within 2 days, the 1st day being the 1 I bought it on. I too have read Guppy's stuff on bubbles and this is what it looks like.

 

[Chief Wigam]

Andrew, are you still holding TOX. Or trading it?

I just came across this thread. Sorry a bit late now.

I'd like to see you moving multiple avergae chart again, if you could update it, that would be great. I would but my hard drive died and now I have no decent charting software. .

 

[GreatPig]

Updated chart, and GMMA chart.

Cheers,
GP

 

[Chief Wigam]

Thanks. Chart looks much healthier these last few days.

Long awaited acquisition announcement made. Market liked it.

 

[GreatPig]

IMO, from a technical perspective, TOX won't look healthy until it manages to stay above $15.

Although for very short term trades, ranging from $10 to $14 may provide good returns if you can get it right.

Cheers,
GP