Profit/Loss:
Up a measly $20.00 on 1 green trade this week
Thoughts:
Another slow summer week. Was away from the desk for the first 2 days. Wednesday made a small trade on AST, illiquid, 5 cent tick rule, boring, missed my add. Watched for the rest of the week. Choked on a trade or 2. 1 trade i choke because it had SSR, which i normally dont short against. But I've created a new rule for myself which is if the stock is below vwap and it fits your setup, take the trade. I feel the fact that longs are in trouble when below VWAP is enough selling pressure to balance out the effects of SSR. I'm way to much of a perfectionist when it comes to entries and exits. Thats a big problem. I've tried to investigate the root of this issue and its a pretty simple answer: Poor risk management. My plan to improve risk management is to write out a specific plan for each trade and adjust my position size to account for extra risk, only when reward is there, ideally 3-1. Sounds simple, and basic but honestly i never focus much on the reward and only take a trade if risk, is minimal, but that's only relevant with respect to potential reward.
Lessons:
- When managing position size, don't just think about risk, think about reward
- Don't be afraid to short SSR if the stock is below vwap
Hey Tom, can I make just one suggestion about documenting your goals? Get a PHYSICAL pad of paper like one of those really small ones a cop has...and write your strategy on that for each trade. And you might ask, “why does it need to be actual pen and paper?” A: For the same reasons that people who spend cash, waste less of it than people who use debit/credit cards. The paper makes it real. I’d just keep it simple with the particulars: In, Projected Out, Position Size, Reason for Trade. Also, I’
Also, I would make it a rule to not trade without your pad, as a lesson in “Being prepared to trade.”
@Shawn_McCune thanks for the tip but i actually already use sticky notes like crazy, i write down the stock, some info and what setup it fits, but i do need to work on writing my specific plan in terms of risk/reward, sizing and my plan to scale in/out
Join now or log in to leave a comment