Scott_nowrealtrader

Trading Recap 9/9/17 (Selling too soon but got to remember Rule #1 of trading Cutting losses quickly its all about risk management

Thanks for viewing this blog post this will outline my trades today and how I may have traded incorrectly and what I did right and where to improve along with opportunities i missed.

"If I have positions going against me, I get right out; if they are going for me, I keep them… Risk control is the most important thing in trading. If you have a losing position that is making you uncomfortable, the solution is very simple: Get out, because you can always get back in.”- Paul Tudor Jones

"The elements of good trading are: (1) cutting losses, (2) cutting losses, and (3) cutting losses. If you can follow these three rules, you may have a chance.”- Ed Seykota

These are quotes from Market Wizards by Jack D Schwager and i thought I'd put them at the start of the blog post just to remind myself and others that sometimes you''ll get in too early sometimes you'll get out too early but risk management is so so important so no matter that i missed a lot of the move on my trades today sometimes that will happen and I just need to follow the rules and eventually I will get payed off.

Trading Recap

$NLNK- I had been watching $nlnk throughout the pre market and was watching it as at first it spiked in the pre market from the 14.3-14.5 area up to the 15ish level and it says 2 separate orders went off @ 15.37 but i don't believe that is true so the 15ish level was the real resistance and all throughout the premarket that was the real resistance so when 90-60 minutes before the market open it came back to $14.3 then 14.1 and I started to focus more on other stocks like $frta and $kura. Though at the market open it started spiking and it struggled but cracked straight through 15, I took a position right above 15 as it cracked through resistance.and it spiked up to 15.4 and then it had a big red candle back to 15 this scared me out of the trade and it really shouldn't off this was a mistake by me.

(THINK ABOUT THIS) I know 15 is the major resistance i take a position as it cracks the resistance therefore 15 becomes strong support yet i sell at the perfect entry after it fails to spike. That is not uncommon though that you will find a pullback like that after it spikes. Lesson- Try to keep emotions out and think rationally about risk/reward (support/resistance) etc and give slow stocks like $nlnk time.

$NLNK- This may have been a slightly influenced revenge trade but I do believe that the trade was solid and I wanted to get back in. I knew that this stock was to likely to have a pullback towards support after a few green candles so i took a small position as we pulled back looking to get a good entry. I had a little bit more patience on this one after last time and wanted to give it time. But i still was a little bit too cautious as the resistance was holding up so i decided to exit and take profits as definitely looked like this had a good chance to fail but now it looks obvious that it would breakout but that's thing about the hindsight bias.

$FRTA- low float spiker/recent IPO up on the class action lawsuit this was the second day and looking at the past history of the stock it was likely to spike but end up loosing most of it's gains on the day. I was looking for a place to short it but I wanted to make sure that i was careful shorting this it still had decent volume so I wanted to wait to short this until the backside of the move because you never want to get in a Friday short squeeze. Some people may not recognise the pattern but I was very used to trading the heads and shoulders reversal shown in the chart. I had a small position just to be careful on this stock. Very good risk/reward and I just had to keep my eye on the stock and give it some time for it to fade off. I was waiting but I had to really watch this stock and sometimes i had seen the reversal fail and it was base and come back to the top and could breakout from there so I took the shares off so I could stop watching it and be safe. Small profits If I had given another 10 mins I could off covered for $64 in profits. Lesson- Be safe but watch volume because with such volume the odds of this coming back highly reduces and it would of been better to hold, give positions time.

$KURA- Was looking at this stock on the ramp up at the open for an opportunity but i was not there to capture one. I noticed the possible short looked like there was good resistance on this stock so I took a short looking for a possible fade off on the day. I gave this one some good time as it was not doing much and kept testing the support but simply couldn't crack it then eventually it cracks the support but it still can't rally crack so I get lucky and i actually end up getting my exec near the lows right before the stock bounced back to support and came back to the highs then it started to really fade off. Lesson- none really just to exit when the stock is unable to breakdown and you know that there will be other shorts who are going to cover so you want to be quick to cover.