Today was my first trading day. How well did I do?
I think I completely messed it up.
As I did the post yesterday, I was looking at ABK, AGM and LAB.
ABK started strong. It quickly moved to 4.0. JV suggests not to trade right at Market Open but wait for some time and see how the stock is moving. I waited for two positive candles and I thought, well, this baby is gonna fly and I bought 500 shares at 4.07$. At the same time, Muddy (the Guru) put an alert in Chart saying that he is out of ABK. I was surprised. And well, what do you know, after hitting the 4$ mark, ABK kept coming down and it never touched 4$ again. I had a stop order at 3.49$ (previous day close) and ABK kept hovering at around 3.7$. By 12, I realized that ABK is not going to move up. I wanted to get out but because I bought 500 shares, I would mark loss of 185$ and that thought didn’t let me get out. It is interesting to note that all the trading books I read, described the scenario where you don’t get out of the trade because once you enter the trade your emotions take over and you don’t cut your losses. Well, they were right on the money! [There was another reason, I didn't get out the trade as I would have used a day trade]
Lessons:
1. I think Muddy decided to get out the trade because it reached the even dollar (4$) mark. I need to keep this in mind.
2. I didn’t pay attention to the overall market which was in a very bearish mood. Yesterday, ABK moved swifly along with market. And today market tanked and ABK could not continue its upward journey. I should keep an eye on DOW and especially look at XLF if I am trading any financial stocks. Thanks Yng for the tip!
3. For my first trade, I traded a big amount i.e. 2000$ (40% of my equity) I should have started small. Going forward, till I start making money, I will not trade more than 1000$ on any one trade.
4. Trading is much harder than I thought. When I was studying for last 2 months I did realize that it is hard, but I did not realize that it will be this hard. I did not realize that once your money is on line, your judgement goes out of the window. None the less, now my desire is stronger to learn this skill.
ABK 2nd October Trading Results
Anyway, I once again looked at ABK charts and saw that it went as low as 1$ in July and later on moved from 2$ to 10$ in August/September. Keeping in mind that Senate passed the Wall St. Bailout (aka Socialism for the rich) and there are good chances that House might pass the bill tomorrow, I am thinking that ABK will rally and I will be able to at least get my money back if not make more money. It’s pure gamble now.
While I was watching ABK, I saw alert by Muddy on SOV LONG at around 5.2. I quickly looked at the chart, and saw the momentum SOV had shown for past couple of days and the solid volume, I decided to jump in at 5.36$. [Okie, I will admit, I jumped in because Muddy jumped in and not because I saw anything meaningful in chart.]
Anyway, SOV had serious resistance at 6$ and I got out at 5.8$ netting 28$ profit after commissions. My first profitable trade, yay! And I saw in chat that Muddy got out at around the same price. And even though I entered the trade because of his alert I exited on my own. So not too bad.
Later on, I saw another alert SFI in chatroom. I thought it was by Muddy, so I entered 200 SFI at 2.07$. (Later on I learned that it was not by Muddy but someone else.) Anyway, SFI held constant at 2$ through out the day and closed at 1.95$. I didn’t exit because I didn’t wanna lose a day trade. If it doesn’t move tomorrow morning, I am going to take loss and get out.
That’s all I could trade today as I had to leave for work. I could not watch AGM (Which I should have, it moved from 6.39$ close to 7.35$ close and also showing great movement during the day.
So what are my plans for tomorrow?
1. Watch bailout news closely and get the order ready. I see that TOS has something called ‘Order Queue’, I am going to figure out what that is so that I can pre-enter my orders.
2. I didn’t have time to prepare my watch list for tomorrow, so I will watch chatroom and see if I can spot something useful.
See you tomorrow.
RJ.
P.S.: It’s a co-incidence that I started trading on 2nd October, Mahatma Gandhi‘s birthday! Recently, I read one quote by him ‘Be the change that you want to see in the world.’ So true!
Status as of Oct 2nd:
Positions Traded For Gain: SOV ($36)
Positions Traded for Loss: None
Open positions: ABK (LONG 500 @ 4.10$), SFI (LONG 200 at 2.07$)
4 responses so far ↓
1 Blain Reinkensmeyer // Oct 3, 2008 at 5:52 pm
Stick with it and keep writing down those lessons. Don’t forget that this market is extremely difficult to trade and even the pros are struggling to keep up.
In crappy markets it is sometimes better to sit in cash and simply read more books until the market can start to turn north.
Good luck!
2 YngvaiMalmsteve // Oct 3, 2008 at 9:03 pm
Yep, trading is tough! There’s a lot to learn. But with time, it gets better.
I’ve linked to you from my blog.
3 Second Trading Day // Oct 5, 2008 at 12:56 pm
[...] RSS ← First Trading Day (aka realizing that trading is much harder than I thought) [...]
4 RJ // Oct 5, 2008 at 12:59 pm
Blain,
I feel that the market is actually suitable for day trades because of the extreme volatility. I think if I had more experience and no day trades limit, I would really do well under current market situations where a stock price could move 10 to 20%.
And thank you Yng for linking to my blog. You have been an inspiration.
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