Friday, April 16, 2010

How I take a loss

My record keeping is on a notepad at my trading computer. I like the idea of follwoign new product companies with good sales and earnings.Looking back at records and trade records on 4/7 I purchased 300 Shares of XRTX. 2*ATR was 1.71, the amount of money I was willing to risk was about $500. I recorded a stop loss of 17.27 based upon this, along with a note to add if the stock took out 19.25 highs. I felt real smart buying that day as it made the top five list for stocks moving up on volume that day. Yesterday the stock moved a lot with some news, I think someone started following the stock. It fell hard on 5x volume. I saw some of this from work, action did not look good and rather than waiting for my stop loss to hit I sold at 17.76 for a loss of $369. It did take out my stop loss, but did close above it.

Discussion: if you click on the chart and open it, the stock has had 2 big gaps up. Perhaps this uneven trading, ie emotional, was not the best pattern to get involved in. I thought about this a few days ago but stuck with the trade. I will also consider wild patterns as difficult to enter. I'd rather see more regular movement in a stock. I'll keep this one on my watch list as it might set up again.

No comments:

Post a Comment