What I have learned so far

[Needless]

Hi.

I don't know if this is of any help to anyone at all, but I know it will be of good help to me. I thought it would be a good idea to start my "career" on this forum by writing down what I have done wrong so far, what I have learned and what I am doing now.

What I have done wrong so far

Greed, and noth having a plan

I bought shares with all my capital in a company 10:00 in the morning. About 13:00 the stock was up 18 %. This was one of my first trades and I felt so good. About 13:30 I was - 5%. The world collapsed. About 14:00 the stock was going up again, and I sold when it was 3,45% up.

Not following my rules and strategy

One of my rules are: "Don't trade the first hour after the market has opened."
I have picked a stock, and based on some technical analyse I beleived that there was a good chance the stock was going up. And it did, after 10 min from opening the stock climbed fast, and I wanted in as well (Greed) so I bought. 2 hours later the stock plummet, and I was down 7 %. I managed to buy the stock on its highest price that intraday. The next day the stock kept gooing down, and in fear I sold with a loss of 10%. The third day however, the stock rose steadily above the price I payed.

So I broke my rule because I was greedy, I didn't have faith in my strategy and was afraid so I sold too early.

What have I learned?

- Keep you emotions out of the trade. (Easier said than done.)
- Never break your rules.
- Always belive in your strategy

What is my gameplan now?

- Never buy the first hour after the markets open
- Focus on swing trading, day trading wasn't for me
- Follow my strategy with extreme accuracy
- Decide before you enter a trade when you will enter and exit


I am aware that almost everything I have written one can find in forums, articles and so on. But I think it's very good for me to force myself to write this post to an audience, and hopefully this will help me avoid doing the same mistakes again. A bonus would be if any of you had any criticism or supplement of my roughly written gameplan.

English is not my main language, so I appologize if I mispell some words

 

[hasanzehn]

don't put yer eggs into one basket...u used *all* your capital to buy just 1 organisations shares? bad idea.

Also concentrate on good trading rather than looking continuously at the bottom line and how much profit you can take out at any one time. Force yourself to use stops when you reach a target value, yes it might go WAY WAY above that but so what...take what you can and de-risk.

 

[Needless]

don't put yer eggs into one basket...u used *all* your capital to buy just 1 organisations shares? bad idea.

Also concentrate on good trading rather than looking continuously at the bottom line and how much profit you can take out at any one time. Force yourself to use stops when you reach a target value, yes it might go WAY WAY above that but so what...take what you can and de-risk.

Thank you so much for your advice.

"..concentrate on good trading rather than looking continuously at the bottom line and how much profit you can take out at any one time"

This is so good, I will start focusing on good trading right away.

 

[meanreversion]

Needless, have you read any trading books? Before you risk any more money, I would strongly recommend "Market Wizards" and "Trade your way to financial freedom" (by Schwager and Van Tharp respectively). I've recommended these books many, many times but there isn't a single trader who wouldn't find them useful.

 

[Needless]

Hi meanreversion.

I have read most of "Market Wizardz", and i found it very interesting. However I find it more valuable to read online articles and forum posts, but I will check out the book by Scwhager and Van Tharp.

The last cuple of days I have been reading up on candlestick charts.

 

[Needless]

Hi TDEMT.

Yes I do have a business plan and a trading strategy, however I don't think they are nowhere near completion. I add, remove or change part of them every week. Do you have a link where I could get some tips about how one should write a business plan and trading strategy?

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Also I may have detected a fatal error in my system. When I trade I risk maximum 2% of my capital on one trade. My goal for every trade is to take profits at 6%. With other words 1R-3R. So I can have 3 loosing trades and 1 good trade and I'm back to 0. However it seems that my system don't produce enough winning trades compared to loosing trades. It is a little early to say, but I will monitor the performance of my system over the next month to determine if its profitable.

I have had a couple of good trades that my system was right on, but I got stopped out with a 0,5R profitt because of a too tight stop loss (trailing stop loss). Any advice on how to use trailing stopp loss without getting stopped out because of market swings?