Blast From The Past Part 2

Not only did I over trade today, I took trades that I wasn't prepared to take; that is trades in stocks that didn't appear on my watch list. While tradings stocks that don't make it on your watch list isn't necessarily the worst thing in the world, your entry has to be more or less spot on or else you will take on too much risk. I took a trade in STI because it spiked early on Friday. I was alerted to it because a friend of mine made mention of it a few times. at that time, the chart looked like this:

I wasn't too interested in taking a trade on the stock. It looked interesting to me but at that time, I wanted to stick to what was on my watch list. I missed the breakdown that occurred a short while later. When I did pull the chart up again, it had already broken down. I went back in on what I thought was a small pullback in trend. The pullback continued up ward and I stopped myself out. I went in a few times more for small losses.

I lost on this position for many reasons primarily because I picked the wrong entry point and because I didn't stop once I saw that bias on the direction was wrong.

The other stock I over traded was MR. The stock washed out at the open and then it started to consolidate. I expected it to gear and perk and then grind higher. The stock dropped a little, I got scared and pulled out of my position (took a loss). I figured it would resume the downtrend since it didn't make a new high and I got burned as it turned and went a little higher. I then went long playing for a break back to the high of day. the stock moved higher but then hit some resistance and fell back. I got out with a profit; enough to wipe the loss from my second entry into the stock. I took one more entry on the short side,but it didn't work so I exited the trade early.

In order to be a good trade, one has to discern a good trade from a bad one. Also, one must be able to acknowledge a good trade but refrain from entering because the conditions do not allow for it to be profitable.

Forex Zone:

Here is the update of my current forex position. I am considering adding other positions so as to further test my strategy. I will also pick up a few commodities trades in a few weeks also.

Good Luck on Monday!