Made some trades. One bad one good
(video at bottom)One I lost a bunch on went something like this:
I was tracking GAPTQ, at the time it was ticket symbol was GAP I was following the top down approach and sector rotation strategy. i charted the stock and it was channel bound for several months.I had a market trigger set to the bottom of the trading range figuring that we were heading into consumer staple safe haven like Christmas.The company was still running lines of credit so I didn't see the near term risk for bankruptsy. I added the market trigger and it filled and I got the notification email. In the next 30-60 minutes I was in a mad scramble to mitigate losses.I logged into my trading platform to view the sea of red. Once I seen it dip below $1 I knew it would go much lower but seen there was a bounce point to be had so I threw a market order out at 1.20 and got filled. As you see in the chart it did go much lower and it never did recover.
Some of the lessons learned this day:
1. Once these companies start whispering about things like bankruptsy, even if not true they tend to sell off hard.
2. Don't simply trust the charts, sectors without also doing more research on these companies. As they say history may not repeat but it often rhymes. Companies that get comfortable short changing there lienholders and debtors see no problem repeating the process.
One stock I gained a bunch on went something like this:
I was tracking drugstore.com ticker symbol DSCM. The fundamentals seemed to be in place and balance sheet appeared clean for a company of it's size. I knew there was a substantial amount of consolidation in the sector and this seemed like a prime takeover target.I found some support around the .88 range so I placed an order and got filled. I also charted by support and resitance levels to see where to take potential profits or set a stop loss.
I was experimenting with trade stops and triggers and realized that market makers would see my trade triggers. In other trades it was like a moth to a light, place the trigger and get stopped out only to see the stock then take off. This dynamic many traders don't take into account. They just see buyers and sellers but what about the market makers?
A good anology would be sitting at a poker table and your cards are faced up and everyone else is faced down. Doesn't seem fair right?
I tried something different this time. I added a very small stop loss around the .72 waited until the stock was heading toward this stop loss and replaced it with a very large .74 order shortly before it got there. As the chart will attest this trade worked out very well.
Some of the lessons learned this day:
1. If the companies fundamentals are in place and the balance sheets seem to be in order then use my support and resistence levels to calculate my gain/loss targets.
2. Don't forget about the market makers. They can trigger stops to provide liquidity. Let that last statement sink in. I don't trust trade channels because I seen too many times the price will dip or spike just outside of them to trigger orders.
More videos will come as there comes time to make them.
