Great thread SKC...surprised to see you buying into the tops of the up legs (DOM & SRL) since your entry level seems to be discretionary, i have to ask why aren't you just buying at the bottoms - support ?
Come on... that's a bit of a hindsight comment?!
How was I supposed to know that was the bottom before it turned up? If it didn't turn up how was I supposed to know that the support would hold / held?
They are both back at the bottom now... would you buy them now?
I was trading patterns, not investing based on intrinsic value or anything like that. There is no pattern to trade unless they had turned up. If you want to see some buy support trades, go see "My conservative trading strategy" thread by Luke... and see how he went.
Plus, you need to see the chart in a longer term context. While both were nearer to the top of the up legs, they are still way low compared to their 6 month highs. As long as the reward was there compared to the risk, they were valid setups.
You posted the hindsight charts and the first thing im looking at are those clear as a bell support lines...and yep that's where i would of been buying and holding till they came good....i actually had a good look at SRL again last week as it seemed to be channelling the way i like stocks to channel.
And i still reckon Luke's support trades will come good in time (the 2 i posted about in that thread) support buying seems to be working ok for me, i don't think i would enjoy trading with margins and time pressure....time is prob the best friend a support buyer has.
Of course you never know if support is going to hold but you do know its support, and it is support because its held in the past....support buying is a gamble that support will hold...is that any worse than the gamble/decision you took that resistance would break?
Not looking for an argument skc...just thinking out loud.
I really like your threads of trades you do, skc.
Couple of questions if that's okay.
1. For the 4th trade of DOM, I notice that your initial stop was $3.55 but it sold at $3.57. Why was that? Sometimes I notice slight discrepancies like that (not necessarily in the trades you've posted here, just in general), and wonder why this is?
2. For trade 7, HSP, you mention "the depth of the triangle (~40c)". How do you calculate that?
Cheers
Goodo, thanks.
Do you ever find your stocks selling at below your stop loss? If so, what's the general cause? (Eg you set stop loss at $6.50 and they sell at $6.00)
It's called slippage Ato.
Your stop loss gets triggered and executes at market but by the time the order goes into the market price has fallen further and you are forced out at a lower price.
Glad that I can entertain a few people while trying to improve my own trading. To your questions
1. With DOM I actually executed the exit at market. The market depth looked terrible, the overall market was falling bad, the chart pattern was already broken so I decided to save myself a couple of cents.
2. See below.
i dont profess to be an expert but what the heck is that triangle based on?
The first thing I noticed about this trade and your others is that the stock has already moved substantially in both price and time when you buy them.
ARU has moved nearly 30% in price in 19 trading days with not more than a 3 day correction along the way. It was itching for a larger correction over a time period consistent with its cycles. To trade a breakout like this I would have to have a much larger stoploss, back down at the 60c level, in other words not my way to trade.
Over the longer term people people note that the indexes rise by about 10% pa, and hope to beat that performance. Lets say you hope to make a 100% return for the year. A stock moves 10% in one day, after moving up ~30% in a few weeks, stops dead at resistance, and you ask what you should do???
What are your contingency plans for different types of moves??
Your trading style is different to mine, for instance I bought AJL today, but I think your idea of this thread is excellent.
Not sure what you are getting at. Personally wouldn't care too much about the market's return in the context of this stock...
I have to say my trading skill is lacking when trying to handle a volatile uptrend.
I've only learned how to buy high and sell higher. This worked well in middle parts of 2009 but may or may not work in 2010.
AJL is still falling and I have no skill in catching a falling knife from a technical perspective.
The context is more with what to expect. If something rises 10% in one day after already being up what are the odds of further galloping gains before significant correction. In my world I'd say slim. ARU actually went from opening at 88 up to 104 at the high next day, 18% move over ~day, much greater than most expect the market to do in 365 days (250 trading). To expect a repeat the following day,two days or week, is relying on hope, not on probability.
I have a rule that says "take outsized gains". Most of my rules of trading are sublime to say the least, but they serve me well. This would qualify to me as "outsized gain".
No, that is what being prepared is all about, you know what you will do if the market/stock does a,b,c or d. This should be in your position management section (you don't have to post it, just know it your self).
To me the cardinal mistake you made on this trade was letting something that was 14% in your favour turn into a loss, despite having an original 8.8% 'risk' on opening the trade. As the trade unfolded you let the 'risk' grow to ~14.5% by raising your stop to 89.5 when the price was up to 104.5.
I hope this makes sense.
Not too many years are like '09 with a ~60% move for the whole market from the bottom. Then again not too many years are a copy of what's happened the year before, very few actually. Have a look at different years and how your strategy would go in different market conditions, in other words more research.
Most traders think it is really dumb, how do most traders go?? There are falling knives and then there are falling knives, we'll see how this one goes.
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