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Category Archives: Lessons

Jan. 29, 2013- Another bad day

Today was another bad day in the market for me. This is what happens when there is no plan that is followed.

Please start following a specific plan or else you will go down the same road as other unsuccessful traders go. You will not have any capital left to put trades on. Please start following your plan and do not chase stocks or go against the trend.

Can you please please please do the following small things everyday?

  1. Patience- Wait for your setups to hit or breakout before taking any position.
  2. Stop loss- Please start using one. 
  3. Execution of the plan
  4. Trade with the trend
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Posted by on January 30, 2013 in Journal, Lessons

 

Watchlist- Jan. 28, 2013- Bad Day

Today was a very bad day with no plan whatsoever on 2 of the 4 positions I took. I took AAPL put when it was at 436 area which was the low for the day. I should have stopped myself out when it went positive for the day. Next position I took was on PCLN when it was at 710 and down 10 points for the day. I went against the trend and purchased a call which never went positive for the day. CRM and BIDU calls were nice but didnt move much for the whole day.

I believe that a person can not be successful in the stock market without having a plan to use stop loss and I havent been using any kind of stop loss at all. I am not sure how I can expect myself to be successful if I am not able to follow one thing that makes all traders successful in this field. If you can not follow a stop loss, then please quit and look for some other profession. Discipline is required in this field every single day. One bad day can ruin and take away all your profits. Maintain your composure and be on your toes every single day.

 
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Posted by on January 29, 2013 in Journal, Lessons

 

Jan. 23, 2013- Be disciplined to succeed in LT

Three positions- PCLN call, GS put and LNKD call. I have been carrying all these positions in my account without much of a plan. In order to succeed in the stock market, discipline is required. Without discipline. hardwork and patience, success in stock market is very difficult. Every position you take should have a plan behind it which should be followed strictly if you want to be successful.

In stock market, you can get lucky a few times but if you want to survive for the long term and be profitable, you need to be disciplined and have a plan and strategy for the long term. Without a plan and a proper goal, you will keep on wandering in the stock market aimlessly and not know where you are going.

Lessons for the long term

  1. Discipline- No discipline, no success.
  2. Plan and Strategy for the long term
  3. Stop loss for the long term.
 
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Posted by on January 24, 2013 in best, Journal, Lessons

 

Jan. 22, 2013- Good Start, Bad Ending

I had PCLN as one of the open position from Friday. I am not sure what I was thinking the whole day but I should have analyzed my position when it broke the uptrend on the 5 min. chart. 680 is a big resistance and I should have sold it when it hit resistance above.

Not a good day today. I need to be more disciplined and take the best setups. I need to follow my plan and move on to the next position when my plan materializes.

Lesson

  1. Follow the plan and stop hoping and getting greedy. Take your profit and move on to the next setup. 
  2. Keep your mind strong.
 
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Posted by on January 23, 2013 in Journal, Lessons

 

Jan. 17, 2013- Good and Bad trades

Today was a day with highs and lows. My AAPL call opened up to a nice profit only to lose it all plus a lot more on it. Today, my plan should have been to sell if AAPL broke 510 on the way down but I held on to it hoping that it will come back up which it never did. At one point in the day I was more that $200.00 but ended flat for the day when PCLN went back into positive territory.

Trades made today

  1. CRM Put- I bought a CRM put when the stock was near 171 area but it went up from there onwards for the whole day. This wasn’t a good trade at all as if I had seen the chart, I would have seen that it bounced off of the rising TL support. Lets see how it plays out tomorrow. 
  2. PCLN Call– After PCLN came back 10 points from 675 to 665 support level, I bought 670 call on this pullback. Although it went lower to around 661 area, it did bounce back up to 672 area where I closed this position for a nice gain. It was a nice overall trade as it was based on the homework that I had done the previous night.
  3. AAPL Strangle– I bought an AAPL strangle (505 call and 500 put) when the stock was near 503 area right near the EOD today. 

Lessons

  1. Before placing a trade, look at the chart and then place the trade. 
  2. Remember your homework from previous night and think if you are taking the right call. 
  3. Remember to follow stop loss on your losing positions.

 
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Posted by on January 18, 2013 in Journal, Lessons

 

Jan. 15, 2013- A good profitable day

The market gapped down today and reversed from there. Positions I was holding overnight were PCLN & GOOG call and BIDU put. On the open, I bought an AAPL put as it broke down below 500.00 and sold the put when stock price was near 490 for a nice $170 profit. I also sold BIDU put as it tested the support level from prior breakout area for a nice profit. At this time, market started rallying higher and so did PCLN and GOOG with it. PCLN pushed higher into prior day’s resistance at 665-666 area where I sold my call for a nice overall profit. GOOG pushed higher on FB news but gave away most of its gain in the next 1 hour.

Overall, it was a nice day. A couple of big lessons that I am learning from stock market everyday are

  1. Buying support and selling resistance works more often than not. If you do your homework and be patient to wait for the best opportunities, then you can make money in the stock market.
  2. One of the tricks of the market- When the market opens lower and holds the gap down, it is usually a good area to buy. This is the time when everybody is usually scared and fears the market. And on the other side, when market gaps up and fails to hold the gap, it usually goes back down.
  3. Stop Loss– Take small losses to keep yourself in this game and save money and also emotional capital. Over the long run, following stop loss is the most important rule. 
  4. Follow the trend– Go with the trend. If the trend is up, then buy calls. If the trend is down, then buy puts. 
  5. Strategy– Having a game plan and a strategy before hand helps to take good decisions at crucial times. 
  6. Mistakes– Keep on improving on your mistakes and find out what works and what doesnt work for you.
 
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Posted by on January 16, 2013 in Journal, Lessons, profit

 

Jan. 14, 2013- A day with mistakes

It started out as a nice day today. I came in after the weekend with a PCLN call that I bought at 655 expecting the stock to breakout over 660 and I came in with BIDU put as it had a lot of overhead resistance after a nice rally. Both my positions worked nicely in the morning, however due to my inability today to read the market well, I gave away my profits and went into a small loss for the day. Another mistake I made was when I went against the trend and bought GOOG call. It was breaking down when I bought the call and it kept going down for the rest of the day. Next mistake made was when I did not use stop loss on GOOG call and assumed that it will bounce at the end of the day.

Cut your losses short is the biggest trading lesson that one could learn and it is something that I still need to learn. One way I can learn is by only entering positions when they offer a good R/R. I can also use a fixed dollar amount as my stop loss. Once it hits, the position should be closed. I am confident and believe that I can definitely conquer this next obstacle in my trading.

Lessons

  1. Cut your losses short.
  2. Don’t go against the trend.
  3. Take profits at resistance and buy support. If support fails to hold, then exit the position immediately.

 
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Posted by on January 15, 2013 in Journal, Lessons