thanks for the compliments, it makes me even more determined to improve further..We all learn from our mistakes(hopefully)...
TATRADER Tibits...
The story of Trader Jeanne
Mark, BEAM is a great company with a low PE..When they gain market share from VISX this stock will make a run at 30+..It did a Cooper, 1,2,3,4 yesterday, so I entered just above the previous day high...
Why did I get killed today, and now sit with almost a 3 point loss...
Response by loving husband...
Jeanne, you made 3 trading mistakes and the market rarely bails a person out..Here are the three
1)When BEAM went above 14 and showed continuing momentum on the 1,2,3,4, it did so on weak volume and did not show determination to continue upward..
2)You should have set a protective stop 3% below entry price..That would make your stop set at around 13.75...Keep your losses always under 300.00..Remember, we can handle many 200-300 losses, but we cannot survive with $1000-2000 dollar losses..We will be out of the game if that continues..Keep all losses small..Let the small losses fall off of you like water off of a duck...We will ride winners like
XNET where we take home our 3-4K on a single trade...
3)After you made that trade, you had a gut instinct that it was not right..Usually, when a stock goes against you on your entry price..If you ever feel that you made a mistake, SELL IMMEDIATELY...
Don't even wait for the 3 to 5% loss..Maybe you can get out with a 1 to 2% loss....This is the only time feelings should enter
any kind of trade...
4)You fell in love with the stock(eye lasers that will make billions)
Never fall in love with a stock..They will turn on you like Scarlet did in "Gone With the Wind"...
Now that you have learned from your mistake, let's not repeat it....
I came down pretty hard on my wife today, when I shouldn't have, but I want her to be a top gun trader, and these mistakes must not be made..I know about them first hand, I have made them..
Tale of Trader Jim
Trader Jim bought PTEN on the oil rally..He got in at 5 1/2..The stock moved above 6.00 on decent momentum..Trader Jim, thought, wow, this could be a double..The stock went up to 6.43 and Trader Jim's eyes were green with $$$signs...He saw $10.00 on the horizon..But quickly the stock retreated, and before Trader Jim knew it he was sitting on a loss...
Mistakes of Trader Jim
1)Trader Jim should have set a protective stop immediately at 5 1/2...
Then he should have trailed PTEN with a traiing stop of 3%...That means when the stock was at 6.43, his stop should have been set at around 6 1/4...If Trader Jim had done this, he would be sitting on a 3/4 point gain...But again, he let greed and the scared rabbit syndrome take control of his life...
Lesson: NEVER GIVE BACK PROFITS ON A WINNING TRADE!!!!
Tomorrow, we will look at Trader Bill as he plays a popper on PTEN, and instead of selling on popper day, he delays, and ends up losing his profits....
Regards, Mark
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