I had an appointment with the dentist this morning at 9:00, so I didn’t even to get to see the open. I got back at about 10:45 still a little drugged up from the gas. I watched the market for about an hour just looking over my charts for possible trades. I took a trade on MA with a close stop that was hit and one on DE with the same result.

After yesterday’s abysmal trading I was determined that I was going to work on using a trailing stop if I took a trade in a MoMo. Around 11:30, I noticed that some of the solars were setting up a wedge pattern that I like to trade. I mostly watch FSLR, SPWR and JASO in the solar space. FSLR started acting a little crazy and JASO wasn’t doing much so I took a trade in SPWR.

I started out with 100 shares as SPWR tried to break up. This move failed and a nice consistent bottom began to form. I added another 100 shares on the sideways consolidation and put in my stop just below the bottom of the wedge (lower red line). After adding to the trade the move started to show some life. I waited for a break up to $125 and then moved my stop up to $124, just above my initial entry. We had a small consolidation at $125 and then a move to $126. When we failed to trade above $126, I moved my stop up once again to $125 where I missed getting stopped out by 4 cents. Again we failed to break up and I moved my stop a final time. I was hit at $125.30 with a profit of $387.

At the highs, this trade would have netted me just over $500 yet I took away less than $400, and this doesn’t bother me. I had a game plan, and I stuck with it. I could have easily rang the cash register anywhere on the way up, but I moved my stops and remained calm and patient. This is a big win for me, not because of the money, but because I have made some real progress on improving my trading mechanics. Hopefully more advances will come next week.

I traded a little more aggressively today. I traded with 200 shares on most of my trades, but I forced myself to be more patient, but alas, not patient enough. In the early AM I was long RIMM and AAPL as they started breaking out. I entered the trades early and suffered fairly large drawdowns in both positions. The morning was looking quite bleak. I made myself stick with my trades, and was able to add to AAPL at the lows and RIMM as it started moving back up. My patience paid off partly because I held these two through a $180 drawdown each, but I was not able to hold on long enough.

AAPL was moving up nicely and I turned that loser into a profit of $250. “Nice trade!”, you might say, but look at the chart below….

As you can see, I held on just long enough to miss the biggest part of the move. Idiot! This could have been an $800+ winner for me, making up all my losses for the week, but I got impatient and took my profits early.

I managed to do the same thing with RIMM.

Later in the day, I was looking at SPWR and FSLR. Both were up big, but SPWR was not showing much strength. I noticed a nice wedge pattern so I decided to short the stock for a move lower. I had a nice stop level just above the highs on the consolidation. Everything was in place and SPWR broke down HUGE. But was I in the trade for the big move…..Nope. I didn’t stick with my trading plan and exited the trade losing $45. The following chart is even better than the AAPL and RIMM charts above. Enjoy!

I traded a little of MA and suffered a big drawdown again, but thankfully I was able to hold this position long enough to get out with minimal damage. That crazy stock moves around so wildly it is hard to have a good stop in. My last two trades of the day were in SHLD. This trade was a breakout trade with a close stop. I was able to add on the way up and got a great fill on half of the trade. I sold the second part at the market and IB took like 5 seconds to fill the order all the while the price was dropping. I guess there was just too much being offered, but I got a terrible fill as you can see. I traded SHLD again just before the close for a small loss, but it wasn’t worth marking on the chart.

Overall, I had a good trading day. I stuck with my guns on RIMM and AAPL in the AM, but didn’t have enough patience to let AAPL run. I need to work on putting in trailing stops on these momentum stocks so that I can catch the big moves up, but I have just never used a trailing stop before. I also didn’t stick with SPWR. Those two trades alone could have netted me over $2k today if I had simply held on. Although I missed a lot of money today, I feel like I am making progress here. My drawdowns in AAPL and RIMM didn’t bother me because I had a mental stop level and I was confident in my trade. I got out of the SPWR trade mostly because FSLR was starting to break up some with the market and I didn’t want to lose big if SPWR followed suit. Bad decision, but at least I am seeing the setups. Developing……

Today I forced myself to sit on my hands on a lot of trades that I saw. I still ended up taking eight trades, but I was very careful with my entries. I really only had two moderate losers in ICE and SPWR for $160 and $123 respectively. I lost $52 in FSLR, $44 in GRMN, $30 in RIMM, and made $39 in JASO.

I was very cautious today with most of my trades only being 100 shares. I also tried to only take trades at points where I could have a close stop explaining the three small losses. My loss in SPWR was larger because I was trying to follow the trend and short weakness, which just so happened to be the bottom. This is one reason that I normally don’t follow the trend. If you get in early you have little confirmation that the move will continue, and if you wait for the confirmation now you risk shorting at the lows or buying at the tops, and you can’t set a close stop because the move has already started. The lack of close stops causes you to incur larger losses, and the times that you pick the exact top to buy or bottom to sell really kills your confidence.

Here’s my SPWR trade…

Today I also tried to use 15min charts for setups, thinking that I get too nervous looking at the 5min charts move. I could tell that I was more settled on my last trade of the day in FSLR when I was looking at the 15min chart. The trade ended up squeezing me out with a small loss, but it was probably my best trade today.

As an aside, can anyone tell me how it is possible to lose almost $400 daytrading momentum stocks on a day the INDU is up 320 points?

I barely edged out a profit in three trades today. I’m still being somewhat cautious on my entries which is causing me to miss some trades. Take a look at the chart of RIMM. I was looking hard at shorting at $114 right around 9:00 but I was not confident enough to pull the trigger. I did short the stock later when it came back up at 113.52 but the trade didn’t work out and I was stuck losing $255 when I exited.

Starting the day off with a losing trade always makes the rest of the day that much more difficult. I tried not to let the loss mess with my trading, and I was in FSLR short about 15min after exiting RIMM. This trade in FSLR was literally a gift to me from the market, a stroke of good luck. I stayed in the trade for about 10min and then the stock dropped quickly. I exited at the market and the entire move was reversed before the 5min bar could close. I sorta felt bad because I basically robbed some poor trader who was long and getting stopped out an a quick pop. I pulled out $520 on this trade and redeemed myself. I took a small position in AAPL just before lunch. Techs were looking weak and the YM was attempting to break down but it didn’t follow through and I was stopped out losing $91.

My trading day is always cut short on Tuesday’s because of piano lessons. I’m not sure if I would call today a good trading day since luck played the leading role in my P/L. Nevertheless, I ended up making $174 on a half day, shorting stocks with the INDU up 236 points.

Today was another one of those slow days in the market for me. Stocks were not moving like they had been two weeks ago, and I knew it was going to be a difficult day of trading. I kept my size small, 200 shares each trade, and only took five trades the entire day. So, how did I end up losing $285 on a slow and cautious day? That’s what I want to know….

I traded RIMM, GRMN, TEX, ANF, and SPWR. Three of the trades were low risk, low volatility trades that I had close stops on that would not have worked out (TEX, GRMN, ANF). The remaining two trades would have worked out grea, making back all our losses and then some, but I was stopped out of GRMN and exited SPWR just before the move. Here are the charts.

SPWR was a great setup. I wanted to short the stock at its double top around 114.75, but I waited for confirmation of the move down, trying to follow the trend. I started the position out with 100 shares and as price moved back up towards the 20-SMA I added another 100 shares close to the top. My maximum draw down at these tops was about $160. I wanted to stay in this trade so long as there wasn’t a big move above the 20-SMA. I had my MA Trade from the 19th in the back of my head. That trade went against me and then came back to flat offering me a good exit that I didn’t take. I ended up losing over $400 on the trade, getting forced out at the lows. I didn’t want that to happen again. After the MA trade, I made a mental rule: If a position goes against me $100 to $200 and then comes back to flat, I need to exit the trade and not continue to hold on hoping for an eventual move.

With this new rule in mind, I exited my SPWR trade down $33 only minutes before the stock tanked. Looking back on the trade, I feel that negativity in the trade got in the way of my profits. After adding the second 100 shares, all I was focused on was not losing. I was afraid of losing too much money, and not focusing on the potential profits. Instead of looking at what I had to lose, I should have focused on what I could gain. This was a classic case of negative thinking leading to negative results.