Here are the three trades from my second day of daytrading, March 28th, 2006. You can read the original post, if you want. Sadly, only one of these trades makes any sense to me today, and even that one appears to have been executed all wrong.
The trades were all winners, so it’s hard to be too tough on myself. But, it’s clear that I wasn’t taking much context into account back then. These decisions all appear to be very localized. Still no mention of my stop loss, though from the beginning I have always had a stop loss in mind. I hadn’t yet caught the “R” fever, so you’ll see no R-based profit reporting for a while, yet.
Trade 1, SNDK
For instance, take this short play at the open on SNDK (my original 2006 commentary is on the chart):
On this 15 minute chart, the trade looks ridiculous. I wil give myself the benefit of the doubt and assume that I witnessed what I thought was selling pressure at 57. Today, I would never short a stock that had been rising toward its fast EMA on high volume. It seems like I should have known that, even back then, as I made lots of decisions based on that EMA. Oh well.
Trade 2, DXCM
Speaking of EMA plays, here’s what I consider the “best” play of the three, on DXCM (again, with 2006 comments on the chart):
The stock was falling, but retraced to its fast EMA. Signs of weakness at this point would be a good time to short the stock. So, I think I had a decent trading idea, here. But, somehow, back in 2006 I saw fit to short near the top of the candle. Today, I would be looking to short the stock on the 11:15 candle, if it fell below the low of the 11:00 candle. Of course, the stock found its strength again, and I wouldn’t have made any trade at all.
Trade 3, SWN
This one looks like nonsense. The 1:45 candle had a surge of volume, and began an upswing, sure enough. I must have been convinced we would make new highs. But, if you look, we were making lower highs and lower lows at the time. The two candles after the 1:45 candle failed to break round number 34, and it would appear that some selling pressure stepped in after it tapped 34 during the 2:15 candle.
Yet, inexplicably, I went long in no-man’s land, on a red candle at 33.82. In my 2006 commentary, I said I got out because I felt the market tide had turned following a Fed announcement. Today, I wouldn’t need any news report to get out of this trade! It’s a bad trade! How embarrassing!
[...] 5/29/2007: I’ve reviewed these trades again, to get a fresh perspective on them now that I have more experience. These three trades really [...]
You shouldn’t be embarrassed, because you are an incredible trader today compared to only a little over a year ago. It’s the ones who still suck that should be embarrassed.
I don’t actually feel bad about any of my old trades. Hell, they mostly made money, and I’m having fun looking them over! It’s just hard to believe that I didn’t realize how unsophisticated some of them were. Makes me wonder what I’ll think of today’s trades, next year!