First executed trade. Bought MGT a little late to the party @ $3.75. It was over my entry point, which effected my exit point and cutoff threshold.
It was up and down and I found myself glued to my computer screen. It was getting close to work time and I still had a bunch of stuff to. The low points were teetering around my new calculated cut off threshold. I had a mental note of where my stop loss should be, but I've Tim say that's backfired on him in the past. He said that he just keeps a mental note as well.
So I decided to just call it a day with a small loss a few cents above the threshold and live to trade another day.
I was out at $3.66.
I get a shower and go downstairs to pack a lunch and see that MGT was now up to $4.25! Above my exit point too!
I think a lot of it had to do with the huge gains it had made already. I was half expecting the price to free fall at any moment and pulled the trigger a little too quickly.
Maybe I should have used the stop loss? Does anyone more experienced than me have any input here?
All comments appreciated.
I'm probably pretty close to your experience level; however, if you still value my advice, you should go in with a plan of execution, before you buy, go in and say your reason for buying in to the stock, your prediction, what your low exit point would be(if your prediction is incorrect) and what your high exit point would be(if your prediction is correct).
With a volatile stock like $MGT is right now, i would definitely be using stop limits if I couldn't be in front of the market all day. With other stocks maybe not, as most follow a pattern. If you're not familiar with using stop orders, I would suggest practicing using a paper trading account just so you don't enter the wrong type of order.(It happens!)
@awrfisher I had an entry point, an exit point, a position size and a cut off point all mapped out. I had to adjust a little as my entry point had already been supposed in the pre-market hours. The thing is I didn't stick to my plan. I think your on point though.
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