Trading Recap 3/4/15

Today I had my worst losses so far of around -10% of my account including commissions. The key takeaway though for me is that I was right on more than half of the plays that I either took or that I wanted to take, but due to my account size I am forced to have a tight stop which doesn't let the trade work for me. I'll go into detail for each scenario but I believe that in the future, for now at least, I should only take the trade if I can really risk the actual amount to where my stop should be and not try to force the trade by putting a tighter stop where I get stopped out more often. Usually, the answer to this would be decreasing size but I am already at the lowest size (100 shares for stocks less than $20) possible. In addition, I need to work on keeping my emotions in check even after some losses as I was ready for the CAPN long trade but didn't do it because I told myself I just didn't want to get stopped out again, which caused me to miss a nice gain and something that would have wiped out all my losses from today.

OREX: This was on my watchlist for reactive short or long. I saw an ABCD pattern form in the pre market and prepared myself to get long. It flushed out of the gate a little but the dips were bought so I bought in after it broke the pre market resistance. The mistake was to not give it the extra .10 it needed, but rather to just put an 8 stop. I originally thought it would be chasing since it came right back from the flush, but it consolidated before heading temporarily higher and breaking the ABCD pattern so I thought I was ok. I turned out to be right on the long. However, after I got stopped out on the long side I saw a lower high form and it had rejected the pre market highs so I went short around 8.15 with risk to the pre market highs but it still held 8 and zoomed off there, stopping me out again. Should I have given the long more room to go? Yes. Would I have cut it off and gone short anyway after the lower high and seeing it reject the premarket highs? Possibly. Either way this was a tricky trader and I know others had difficulty with it today.

What is interesting from this is that the rejection pattern I am seeing seems to work only for shorts when it has ran for a bit and not just in the beginning of the day, assuming there hasn't been a huge parabolic in the first few minutes. If this pattern occurs in the AM, like it did yesterday in LL and OREX today, it seems that a nice run will usually ensue but only after flushing for a bit, which happened both times.

First white arrow is the long and the second is my short. The price line shows the pattern I am talking about where a stock pops up above resistance before sitting back down and being under resistance again. You can see the flush then the nice rally afterwards.

GOGO: I saw a very nice daily chart and thought that it could be a nice breakout.

Intraday, I saw a wedge so when it broke out from it I went long with hopes of a nice breakout but it didn't happen and I got stopped out. I let it go to the full stop where I actually thought the stop should be. I will keep this on watch.

GPRO: I took this long on a ABCD breakout and with my prior losses occurring previously to this trade, I gave it a much tighter stop than usual, which I shouldn't have even after using only 50 shares. Originally, my stop was going to be at .50 over/under but then I increased it to a low that just formed. It hit my stop but only went a few cents more before reversing for the rest of the day.

Things to work on:

1. If you are going to take a trade, it has to be the actual correct stop chart-wise otherwise don't take it because you won't give yourself enough room.
2. Keep your head cool after losses for other GOOD setups. Don't just trade to get back losses, which I didn't, but make sure your losses don't prevent you from entering GOOD setups that you would have taken if you didn't have the losers before.
3. This one is just a note. On bigger stocks like GPRO, you have to keep an eye on the SPY and don't fight the market. Odds are not in your favor.