I thought I executed a good entry on this one. A NRIB at the upper part of the first WR Green bar. But what happened with the exit? IThe 4th and 5th bars are bearish, but instead of exiting at the bottom of the 5th bar I decided to give this some room (as you know, a few of my recent trades failed for exiting too quickly). The truth is that price dropped quite abruptly and I exited pretty much at the bottom of the 6th bar, which was exactly the very bottom of the retest. From that point, PBR moved almost a point and a half. Very, very disappointing.
Where would you have exited?
15 comments:
Anarco,
I am always careful with these oil stocks on Wednesday. I have been burned many times with PBR due to the oil report. Even after 10:30 they can sometimes come out with some BS news that will stop me out and then continue in the right direction.
Tyler
Okay, here's my 2 cents,
I've found that trying to use BE type stops to keep from losing money when the market has moved my way a little rarely works well. The market is always going to try to screw the trader who's trying to "protect his profits," or "guarantee a scratch trade."
Lately I only move my original stop after my first objective is hit (similar to what Trader-X does I think), otherwise I just take the proverbial "ass-blasting" and wait for the next trade. More often than not, I have to wait as price comes way back close to my entry, if not past it, where it tries to shake out the "profit protectors" before it resumes it's original course.
If you look at my trades from yesterday, you'll see that I took the ass-blasting on the first trade and then on the second trade, if I had tried to use a BE stop, I would have been stopped out and missed the big move.
If you're confident in the reasons you took your trade and you haven't over-risked on it, then it's easier to just let it do what it's going to do.
That's where the appropriate "trading attitude" comes into play. Where there's fear, there's problems. And moving a stop to BE before your objective is reached or at least the first full swing is finished is a fear-based play (not that I'm able to avoid it most of the time myself).
Again, just my 2 tarnished cents.
-AT
Hi guys~
Yes, while my entries have become much better over the past year, I still have a lot of work to do with my exits. I am reviewing all the info I had available on that subject and I come across this post that you may also find useful.
Trading to win vs. trading not to loose
Thanks for your feedback!
Tough break Anarco. Overall it was a choppy day, but you made a good trade selection. Trading to win would have allowed for a retest of the BO point. Or, partial at the first sign of weakness and leave original stop on remainder. It is all so easy in hindsight. :)
Thanks Jim and good point!
I noticed that the first trade of the day can really affect my Trading Psychology. If it is a good one, my day typically rocks. But if it is a bad one, things get a little shaky for the rest of the day. I made this observation 5/6 months ago, and that lead me to being extremely cautious on my first trade. Wrong! I need to adjust my attitude here.
I think that Attitude Trader is also right, I need to have more conviction in my setups and let my trades ride.
Thanks for your feedback Jim!
Hey guys,
I'm going to take the contrarian view: 1. Tyler's right re: oil inventory report at 10:35 every Wednesday. PBR rallied and took out R2. 2. R2 holds as support until 10:35 and price swoons. 3. Capital preservation is the first priority for new traders. So, 4. partial when price fails R2 and keep original stop for balance. 5. You can always add back to the existing position after the effects of the oil report wear off.
Also, you can use Fibs. intraday to measure the retracement of the last leg up, in this case the entire day's trading range thus far. The retrace here was between 38-50% which is normal in trending stocks.
I also don't like when the first trade of the day is a loser. I know you are trying to remove some of the lines on your charts, so what I do is keep the intraday pivots on one timeframe so it doesn't mess up all my timeframes and that way I'm aware of any significant pivot support/resistance setups or failures.
Hope this helps.
Jamie,
I don't think yours is necessarily a contrarian view, just good thinking and I agree: Take partial at a failure of the first objective but keep the original stop for the remainder to avoid the "culling" before resumption of the move in the original direction.
-AT
Hi Jamie~
Your post makes a lot of sense to me. I am actually trying to keep my 5min chart with almost no indicators, but I followed your suggestion and added back R1, R2, S1, and S2 on my 15min charts. Hopefully I will then be aware of these mayor PPs because I have the 15min, 5min, and 1min open at the same time.
I did not think about using the fib tool to measure the retracements; I'll also follow your advise on that.
Thanks for the thoughtful response.
attitude trader is, unfortunately for me, scarily correct. But so is Jamie. From what I can tell... the folks that make a shitloads of cash fall into two groups: a) those that pick the perfect entry where price rises quickly and way above entry point and b) traders willing to take the ass-blasting knowing their entry was correct and are willing to absorb the retracement costs.
I have definitely traded out of fear lately, but that's not always a bad thing either. I'm happy right now. I think the perfect balance lies somewhere between what Jaime and AT said. For me, I would like to get to a point where once price moves significantly in my favor... I move half my shares to BE and leave the other half at my original stop. It's a rational approach that gives me the opportunity to prove I was right and also let's at least half my position ride no matter what happens. Protecting profits only becomes detrimental when you have very strict entry criteria therefore limiting the amount of trades you have per day.
And I couldn't agree with you more regarding how a first trade loser affects the rest of my day. When I'm down early and get back into profit it doesn't feel half as good as when I'm up early and end up giving some back. It's just the mental perspective. When I'm in black at the start of the day I feel like I'm in power and control. I'm deciding whether to lose or make money and future trades become gravy instead of a necessity.
Hey guys (especially OONR7) my "2 cents" comment wasn't intended to sound like I think you have to trade like a wild cowboy with wide stops. Quite the contrary. Today I took three ass-blastings in a row before I hit a winner, but they were all small relative to the win I was going for and I was out in less than five minutes on each one. It's just that I think that trying to use a tight stop, after the trade has moved your way a little, to keep from losing anything inhibits the potential of the trade.
I think what this thread and blogs by successful traders like X just reinforce is that there are as many ways to trade profitably as there are traders, and you have to find a way that allows you to trade in a profitable manner but also in a way that feels right for you.
Mark Douglas says that you have to trade from a "carefree state of mind," so you do whatever it takes to get in that carefree state of mind whether that's using a tight stop and being ok with getting stopped out, or using smaller size so using the proper stop doesn't create fear, or whatever.
If you have a trading plan, and you've tested it and know what to expect, then there really isn't anything left to do but trade it. I guess that's where most traders make the mistake of trading with real money before they have a definite strategy. We all start throwing money at the market and try to find a winning method as we go, but for most traders that also creates a lot of fear (of losing or knowing that you really don't have a method you're confident in) and that will always create problems.
I'd like to ramble on here but you get the idea and I have to leave for a trip. I think it's great that we can discuss this and throw these ideas around though.
Have a good trading day. I'll talk to you all later.
-AT
at: never mentioned anything about wild cowboys or tight stops. The gist of your first comment was to stick to your guns and your original stop till a reasonable target has been hit... I agree. Crazy stance, I know.
Sorry OO, you said "scarily correct" and I just thought you might be thinking that I was condoning risky tactics. We're saying the same thing though.
And yes, it seems that to be succesful here you have to do the opposite of what you would normally think...definitely crazy.
-AT
Time to take revenge on PBR today. Beautiful bull flag. Hope you caught it.
Anon~
I was away from my computer today, so I could not trade. But I now see the bull flag on the 15min chart at the base of R2. Would had been a very nice entry. It seems like one place to partial out (or exit) could have been $25, since it is a gap fill from 11/12.
I used the 50 MA to take partial of 3/4th of my position.
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