Had A Losing Trade? Consider This…
Well, every once in a
while the market makes you look like a complete novice. For me, that
day was yesterday. As I have been mentioning lately, most of my trades lately
have been based on 5-minute chart analysis or longer. At present
HVT continue to be a rather noisy, lack of edge
game. Here is the ‘skinny’ on my trading yesterday. First the good ones:
-Â An EMC
short off the open, good for 10-12 cents
-Â A long in EMC off
critical support at 10.39, good for another 15-20 cents
-Â Long gold stocks (I am stretching here, these
are actually positions, but I need to build up the story)
And now the ones that did not work at all. The
off thing about these trades, especially Centex
(CTX) was that I had this one tagged as a short. Naturally when I was filled at
my entry price of 72.10 and the S&P’s were breaking down toward the 973 level I
figured I was in. Ironically, the stock moved higher during this time, stopping
me out for a 35 cent loss. Hmmm. I re-entered the trade again at 72.10, and
yep, you guessed it, stopped out again despite the market heading lower still.Â
Go figure.
Then as the market rebounded into the afternoon,
the two longs that were on my radar screen were triggered,
Microchip Technology (MCHP) and
PMI Group (PMI), while they tracked
initially, the S&P’s just did not have enough juice and they pulled back,
stopping me out of these positions too. Well, as I said, sometimes you could
not hit a mules a*@ with a snow shovel. The market sometimes simply does not
cooperate with my analysis.
Question:Â
Should I alter my approach tomorrow?
Answer:
 Absolutely not!Â
Reason:Â
Simple, this was not some new ‘gee whiz’ trading methodology learned on an
infomercial. These trades were a result of a many hours of research and market
observations. My Excel spreadsheets prove that for the last 9 months the system
is robust, with minimal drawdowns, positive expectancy, solid win/loss ratio
etc. So while today was a decent size loss, which is never fun, it was merely a
blip on the radar screen when compared, as it should, to the long term. In
fact, within 30 minutes after the close I had my picks for tomorrow using the
same methodology. To top it off, the analysis was done without any of the stuff
common after getting beat up a bit, “Maybe if I place the stop loss here
instead.” or “The moon was in retrograde yesterday, perhaps Saturn’s orbit
should be factored in.”Â
Now, in my defense, the S&P’s are moving really
strangely lately; there is simply ZERO conviction in the market. We test the
lows of the recent range, then test the highs. Programs kick in at the oddest
times. Lastly, volume and trader vacations wreak havoc with any sort of order.
So, on that sunny note, it is another day, one
that will likely be far better than yesterday.
| Support/Resistance Numbers for S&P and Nasdaq Futures |
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As always, I welcome your comments and feedback.
Dave