What I Learned Today

Okay, well a lot of this will sound obvious or perhaps repetitive. I've read these same things many times before. I am writing this post mostly, for myself.

As far as I can tell there were 3 main factors to my "blowup" today.

1. Amazingly poor trading in AG, my second worst stock of the day. I made 10 unprofitable trades in the stock, 1 profitable trade.

2. CF. I played the "anticipation" game and lost. Meaning that instead of waiting for him to break a downtrend line to purchase, I continually anticipated the break and it never broke the line.

3. "Pyramiding" incorrectly. I was adding to my positions in stocks too late, or sometimes, too quickly. Pyramiding may work in a strongly trending market, but in a choppy trendless market, it is not a good strategy. On days where there is no clear trend or strong movement, it probably is best to buy (or short) once instead of aggressively adding to the position.

In short, I made lots of bad decisions today.

Here are some "rules" I've written down so that maybe in time I will remember them.

* Don't try and pick tops. At least wait for a pullback and a failed test of the high. Anything else is insanity. ESPECIALLY at the open.

* If a stock doesn't drop below your entry don't needlessly second guess your position. Winners sometimes develop slowly. Give them time and let them run.

* Don't trade trendless, low volume stocks.

* If you trade a stock 3 times in a row unprofitably, you're churning it. Leave it alone.

* Unless you're trading with levels from the previous day, or unless a stock is breaking some pre-determined level on it's daily chart trade the open with half size.

* Pay strong attention to the levels set in the first half hour of trading.