I will try to review my trades in effort to help you see what I look for when trading. According to my 2009 survey, most people wanted to see a tutorial video on trading strategies. So with that in mind, I will try to educate my readers on different trading strategies in ’09.
Before entering a trade, I always look at a longer term time frame first. Brian, from Alphatrends.net, preaches this all the time, and even has a book on it– go read it.
Now let’s get into what I saw in BIDU today. On the 60 day chart I see an ascending triangle pattern formation, click here if you would like an explanation of this pattern, the ideal entry would be to enter on a break of the trendline around $140 supported by good volume.
Getting antsy to make a trade, with everything flying today, I decided to jump in early in anticipation of the trendline break, mistake #1.
Now that I have an idea of where the stock has been and where it might go, I look for my entry. I switch to the intraday chart with a 5 min setting.
The market starts to rip around 12:30pm, BIDU sets up a bullish flag, indicated by the blue lines above. I figured if the market would rally further, BIDU could rip from the flag, then rip again from the trendline break @ $140. I wanted to be early.
Needless to say, the market remained rangebound and so did my stock. I exited shortly after to flag breakdown.
Mistake #2, I did not give my stock enough room to move. I decided to move my original stop. at today’s low, once the flag broke down– panic. Tim over at slopeofhope.com has a rule to only let a stop exit a trade. I often use this same rule, and had I used it today, I would still be in the trade.
The trade ended up a loss, but provided a bunch of examples of what to look for. For those that know how to trade, sorry for the tutorial, just trying to help out the newbies.
Note: I’ll try to get some tuturial videos, on different trading strategies, in the coming weeks.
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Good stuff Ragin.
Welcome to my world. Just about everytime I try to anticipate, I get my ass handed to me.
Oh well, live and learn
thanks RC, much appreciated, now I got to get back to loosing more $ like a nube should, maybe one of these days ….
Thanks for this post RC. Great to see how you work and informative for many, I’m sure.
Insights into your thought processes are always welcome.
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