Struggling and Aggravated

[Enigmatics 10]

A couple of thoughts from my own experience and in trying to get you to critically think about your method.....when you say

"Bottoms became more attractive to me because I was trying to eliminate as much downside risk as possible. "".............this is only if you are buying dips in a bull market, otherwise picking a falling knife (while can be done) is tough and potentially frustrating. Recently this is not the market for it, and the stock drop you mentioned in the example seems more than a dip.

 

Oh trust me, I've quickly learned that this setup reacts differently depending on market conditions. Honestly though, what setup doesn't? EBIX provided ample opportunity to be traded intraday. Long term outlook? That's certainly up for debate. Per my studies in VSA, that last daily candle is a stop volume, indicating interest in shares hitting the market. It's been on a serious downtrend (almost 50% markdown) since it's CEO resigned and CFO said was going to as well. Motely Fool reported they had a good Q1.

 

"V-shaped bottoms.That is the ideal result, but it's obviously not the typical one on each instance" - so if its not typical, why try to go for them, and if its not typical, use some patience and go for the one pattern that is more typical. The discipline is to be patient, not worry if you miss the atypical trade.

 

Well, in your opinion, what pattern is typical no matter the market condition? If anything I should be more disciplined in choosing the days I trade the pattern.

 

"My "patience" issue runs amuck when I don't get the V-Shape and it ends up testing a slightly lower low and I'm keeping my stops too small. "..... a bit confused. If you get a V so what, missed opp that is rare. If you have patience and it goes to a new low, then it s typical loss, which will always occur - thats trading, also when waiting for the Higher low, you can either punt it or wait for confirmation in the direction you want, with a tight stop. A bigger stop wont help in this case as you have just confirmed with a lower low that the pattern you were trying to trade is now null and void.

 

Well let's talk about EBIX again. It bounced and I was heavily confident it would get one based on what I was observing in the price and volume. I waited for my confirmation after the stop volume bar on the 10min chart. I need to correct myself, as EBIX did not make a new low after my entry. The low was 16.50. After I entered at 17.12 it hit around 17.35 then proceeded to sell off to 16.80. So in essence that was a higher low, except I didn't stick around to see that higher low because my stop loss was too tight.

 

Now I'm sure I missed a cue for re-entry once it made it's new higher low.

 

"Honestly, I've done nothing but watch dippers and bottoms for the better part of the last 2.5 years. It's not nearly as hard as you think it is.".......clearly it is! This is where I and others are suggesting that your mindset is not quite right. You say its easy, it looks easy in hindsight, but for some reasons its not working.....this is what you need to think about.

 

I'm not saying it's easy. My personal opinion though is that people are very averse to even looking at them because they're afraid of the falling knife. I'm sure you've heard old adages like "When there's blood in the water" or "Be greedy when others are fearful" .... well I've seen this play out with these setups enough to be considered significant and make some of what VSA teaches valid.

 

You might assume I'm doing something wrong and it's "because" of the setup, but I think that's a very surface judgement since we clearly have different strategies and whatnot. I think if I sent you charts on what it is I'm actually watching (with my entries/exits) you might be able to discern whether it's more psychology than setup.

[Enigmatics 10]

I also dont understand what you mean by "V" shape, Are you referring to a pullback in a up trend? or a proper "V" shape?

 

Let's say a stock suddenly falls 8% .... you zero in on a 5min chart and you see the stock recover and bounce immediately off that drop. Visually that formation looks more like a "V" .... sometimes it takes a little longer to form a more "rounded bottom" which would be more like a "U" ....

[SIUYA 11]

let me be more blunt then (in order to I hope help ).....

As I read it in your own words (maybe I am wrong here),.....

you are trading intraday against the trend, and against the longer term daily trend in a pattern that typically will stop you out as you dont have the patience to wait for it. (typical being the word you used)

 

You seemed adamant that VSA is what works for you and then you refer to fundamental information (CEO resigns, bad...CFO is going to resign....bad, and Motely fool "says" they had a good Q1...you are trading intraday who cares about Motely fool and the quarter by quarter analysis).

 

You then refer to a few other adages that really apply to long term fundamental investors.

 

You know you are trying to time the bounce in the falling knife and its not really working for you, and you know this. Its not me assuming you are doing something wrong..... its you who knows you are doing something wrong....hence your thread....and yet you continue to do it. Why is that?

 

I understand your setup (at least the basics and price action), and think with all the other context thats applied I wonder why you are making it so hard for yourself and giving yourself the frustration and struggle. Others are adverse to the setup, because its a hard one to make money out of.

 

As far as I can see these are not really my opinions but are what seem to be the evidence/the facts in this case.

[Enigmatics 10]

let me be more blunt then (in order to I hope help ).....

As I read it in your own words (maybe I am wrong here),.....

you are trading intraday against the trend, and against the longer term daily trend in a pattern that typically will stop you out as you dont have the patience to wait for it. (typical being the word you used)

 

I don't trade this pattern every time and certainly not just any dipper. It depends specifically on the price and the volume being absorbed near the bottom. As taught by VSA, this can be an indication of "supply" being taken off the market in order to facilitate a mark up of price as demand comes back into the stock. Saying it goes against the trend certainly depends on a stock by stock basis. Not all the dippers I play are long term clunkers. Many of these setups happen on stocks that have been on a steady uptrend.

 

But yes .... the more I talk about this with you and others on here it's becoming increasingly more apparent that this setup requires a larger risk/reward ratio then I originally anticipated ..... more specifically keeping a .05% stop loss limit like I did on EBIX is naive at best.

 

You seemed adamant that VSA is what works for you and then you refer to fundamental information (CEO resigns, bad...CFO is going to resign....bad, and Motely fool "says" they had a good Q1...you are trading intraday who cares about Motely fool and the quarter by quarter analysis).

 

You then refer to a few other adages that really apply to long term fundamental investors.

 

Yes. I'm not trading in a vacuum. Over my 10 months of day trading, I've learned that all kinds of conditions can affect the way a stock moves outside of it's chart set up and what the VSA is telling me. Economic data, global news, sector performance, options expirations, the dollar, etc ..... all of these have an impact.

 

Let me ask you this, if those adages like "Be greedy when others are fearful" have no impact on anything other than long term fundamental investors, then why does a stock like EBIX bounce from 16.50 to 18.00? In your words the stock is in a steady downtrend and I would be "trading against the trend" ..... Yet, it gave ample opportunity for one to snag up to 10% as a day trade, which is a fairly sizable bounce.

 

Per VSA, it doesn't matter what time frame - it comes down to supply and demand of shares. If there's high volume absorption of these shares then somebody is clearly interested. Seeing as many of these as I have (regardless of whether I've been good enough to benefit fully) I happen to agree for the most part. Are their failed attempts by somebody trying to reverse the stock? I'm sure there are.

 

You know you are trying to time the bounce in the falling knife and its not really working for you, and you know this. Its not me assuming you are doing something wrong..... its you who knows you are doing something wrong....hence your thread....and yet you continue to do it. Why is that?

 

I am interested in the setup because of the % opportunity on the bounce. I've attested I am doing something wrong and am trying to nail down what that is .... After going thru this discussion with you guys, I feel as though my risk/reward management is completely off as noted by all the shakeouts I've been a part of. The stops I'm keeping are extremely naive. I am trying to be too perfect and it's impossible. These stops are also because I'm using margin and trying to keep my losses as minimal as possible because I'm down in my account.

 

I understand your setup (at least the basics and price action), and think with all the other context thats applied I wonder why you are making it so hard for yourself and giving yourself the frustration and struggle. Others are adverse to the setup, because its a hard one to make money out of.

 

As far as I can see these are not really my opinions but are what seem to be the evidence/the facts in this case.

 

Oh I understand. It's not a setup for everyone. I used to be very nervous with them when I first started because of the fear factor behind the ol "falling knife" hysteria. I've noticed most people tend to gravitate towards up trending momentum. I guess I'm taking the contrarian angle. Outside of the stop loss issue, it's also come down to the pressures of trading for income without a sufficient portfolio size.

Edited June 6, 2011 by Enigmatics

[SIUYA 11]

I don't trade this pattern every time and certainly not just any dipper. It depends specifically on the price and the volume being absorbed near the bottom. As taught by VSA, this can be an indication of "supply" being taken off the market in order to facilitate a mark up of price as demand comes back into the stock. Saying it goes against the trend certainly depends on a stock by stock basis. Not all the dippers I play are long term clunkers. Many of these setups happen on stocks that have been on a steady uptrend.

 

Then it sounds like you should drop this pattern, end the frustration and make money......................

 

But yes .... the more I talk about this with you and others on here it's becoming increasingly more apparent that this setup requires a larger risk/reward ratio then I originally anticipated ..... more specifically keeping a .05% stop loss limit like I did on EBIX is naive at best.

 

Extending your stop is not the issue as an outside observer.....it will reduce your size per trade, but at a guess you might still get stopped out just as much, and if your size reduces enough doesn't that defeat the purpose of trying to trade a small amount of money for a living?

 

Yes. I'm not trading in a vacuum. Over my 10 months of day trading, I've learned that all kinds of conditions can affect the way a stock moves outside of it's chart set up and what the VSA is telling me. Economic data, global news, sector performance, options expirations, the dollar, etc ..... all of these have an impact.

 

Agree - context is important, the point I was making is that as a day trader, using VSA (or any other system to enter) then when the fundamental info is bearish you will be making it hard on yourself and frustrating.

 

Let me ask you this, if those adages like "Be greedy when others are fearful" have no impact on anything other than long term fundamental investors, then why does a stock like EBIX bounce from 16.50 to 18.00? In your words the stock is in a steady downtrend and I would be "trading against the trend" ..... Yet, it gave ample opportunity for one to snag up to 10% as a day trade, which is a fairly sizable bounce.

 

These sayings have impact on smaller time frames but they are generally long term fundamental investor sayings. Largely as they have done their homework and require the size of panicy people to get set.

It is your last sentence here that I would suggest sums up your predicament...... You can see the short term 10% and feel if you can participate in this then its easy money.

1 - it seems that with hindsight, and

2- even without hindsight it is extremely hard to get 100% right and it is frustrating

3 - it feels incredibly fantastic when you do get these contrarian bounces - they might be good for the ego, but are they good for the bank account long term???

4 - you appear to be looking for what seems to be the easy money when in fact its not - the market is a wicked deceiver

5 - if you do continue and decide to increase your stop, and you can still manage to get into these trades and get out at good levels - does the Risk reward suddenly look as good as it appears.

 

 

Per VSA, it doesn't matter what time frame - it comes down to supply and demand of shares. If there's high volume absorption of these shares then somebody is clearly interested. Seeing as many of these as I have (regardless of whether I've been good enough to benefit fully) I happen to agree for the most part. Are their failed attempts by somebody trying to reverse the stock? I'm sure there are.

 

Yes- people are clearly interested in selling! Not to Dis VSA, but often the rationale for why something seems to work is often incidental to this. Yes you are trying to participate in a bounce, with other buyers.....but what you really want is to buy at support where these buyers will provide enough volume to let you get out if you are wrong. In this case the buyers are not chasing the market (ideal if you are long) its more the sellers are temporarily exhausted....thats why it was likely to bounce. dead cats are better shorting that buying.

 

 

I am interested in the setup because of the % opportunity on the bounce. I've attested I am doing something wrong and am trying to nail down what that is .... After going thru this discussion with you guys, I feel as though my risk/reward management is completely off as noted by all the shakeouts I've been a part of. The stops I'm keeping are extremely naive. I am trying to be too perfect and it's impossible. These stops are also because I'm using margin and trying to keep my losses as minimal as possible because I'm down in my account.

 

Again...comment above, is it really an opportunity to be long, or a better opportunity to wacth the bounce and then participate in a short?

 

Oh I understand. It's not a setup for everyone. I used to be very nervous with them when I first started because of the fear factor behind the ol "falling knife" hysteria. I've noticed most people tend to gravitate towards up trending momentum. I guess I'm taking the contrarian angle. Outside of the stop loss issue, it's also come down to the pressures of trading for income without a sufficient portfolio size.

 

Contrarians are often wrong for a long period of time, and will be frustrated a lot. they need resources to fight the market, patience, (there is that word again) - for the short term day traders who are contrarian - the ones I have seen that are successful have balls the size of a house, are constantly on edge. They dont have your pressures. They thrive of their own self induced pressures of taking on the market, and often they take big hits to their PL....something you cannot afford at present by the sounds of it

 

(thanks I have finally worked out how to use the multi quote system )

[Enigmatics 10]

3 - it feels incredibly fantastic when you do get these contrarian bounces - they might be good for the ego, but are they good for the bank account long term???

4 - you appear to be looking for what seems to be the easy money when in fact its not - the market is a wicked deceiver

5 - if you do continue and decide to increase your stop, and you can still manage to get into these trades and get out at good levels - does the Risk reward suddenly look as good as it appears.

 

Well I assure you this isn't about ego with me. Ego would imply "gambling." #5, see again the tick potential on the moves does actually make the bounce rewarding. I think I posted the #'s on EBIX before but from where I bought it turned out to be a 1.8% risk for up to a 6.3% gain. What kind of risk/reward ratio should I be looking for?

 

Yes- people are clearly interested in selling! Not to Dis VSA, but often the rationale for why something seems to work is often incidental to this. Yes you are trying to participate in a bounce, with other buyers.....but what you really want is to buy at support where these buyers will provide enough volume to let you get out if you are wrong. In this case the buyers are not chasing the market (ideal if you are long) its more the sellers are temporarily exhausted....thats why it was likely to bounce. dead cats are better shorting that buying.

 

Well, I definitely want to learn the ropes of shorting so that I can take advantage of both sides if desired.

 

As for the "support of the move", I fully agree .... I've too often caught myself holding out for more, specifically when I've found myself in a slump .... which really needs to stop. Make sure that every trade is treated separate in it's own right and not influenced by the previous.

 

Contrarians are often wrong for a long period of time, and will be frustrated a lot. they need resources to fight the market, patience, (there is that word again) - for the short term day traders who are contrarian - the ones I have seen that are successful have balls the size of a house, are constantly on edge. They dont have your pressures. They thrive of their own self induced pressures of taking on the market, and often they take big hits to their PL....something you cannot afford at present by the sounds of it

 

Well I'm just curious .... Are all dip opportunities "taking on the market" though? Plenty of times dips become buying opportunities. This is why I have tried to study the various price/volume methodologies to spot where the right money is going. When I said contrarian I merely meant I'm looking for situations where it appears people have panicked so I can buy at cheaper prices.

 

(thanks I have finally worked out how to use the multi quote system )

 

LOL .... It just makes things easier to look at.

[SIUYA 11]

Well I assure you this isn't about ego with me. Ego would imply "gambling."

 

The point about ego is that it feels great, its intoxicating, its addictive to take on the market and win....problem is its tough to win consistently.....so its no comment on your ego per se....just that often what feels good, is not a good habit in the market.

 

#5, see again the tick potential on the moves does actually make the bounce rewarding. I think I posted the #'s on EBIX before but from where I bought it turned out to be a 1.8% risk for up to a 6.3% gain. What kind of risk/reward ratio should I be looking for?

 

thats a good risk reward ratio....so why did you not capture it - usually because hindsight makes it look easy but reality makes that RR very hard to capture at the time of the trade.

 

 

 

Well I'm just curious .... Are all dip opportunities "taking on the market" though? Plenty of times dips become buying opportunities. This is why I have tried to study the various price/volume methodologies to spot where the right money is going. When I said contrarian I merely meant I'm looking for situations where it appears people have panicked so I can buy at cheaper prices.)

 

Again here is the crux of the point - the smart money, the right money is not buying - they have been selling and exiting the stock as the bigger picture time frame shows its in a down trend of recent time. For long term investors maybe they are buying on the back foot - but that is not you - you are short term trading. When people panic - it can be good if it coincides with other levels eg; good support, maybe a fibonaci level..... looking at the daily and weekly EBIX nothing really stands out. Support at $15 looks more interesting, while the highs of Mar 2010 could be argued to be support, they were a fair while ago, and hence again more relevant for longer term folks.

You are always taking on the market, but what you want is to go with the market.....its like the ocean....you can certainly get out through the waves....it makes it easier when you go with a rip, and yet the easiest thing of all is to catch the waves back in. (a golden oldie analogy)

 

Also - while its just a word/terminology it certainly does have and will give you certain mental connotations that can hurt a short term trader...... we all do it but i hate using the words overbought/oversold/cheap expensive..... what you think is cheap may be expensive to others, but it will anchor your thought process in terms of the ideas of value that we all have. Cheap should mean nothing to you as a trader....think in terms of where is a good price level to go long where if I am wrong I can get out with a small loss - where is the value trade. When you think cheap, it does not help you, it makes you think in shopping or investing terms.

 

There is a great book called learning to draw with the ride side of the brain (every trader should buy it just to see how the brain can be tricked). In it they get you to do exercises to teach even the most un-artistic of us to draw. One exercise is to train the brain not to think in terms of I am drawing an eye, a nose, a mouth.....instead you think in terms of I will draw this line relative to this line, relative to this shaded area.....I (and the book) guarantee that your drawing skills will rapidly improve.

 

On saying all that......I understand why you are doing what you are doing and your feeling of necessity for it. With that you will always find it frustrating because you are fighting the rip, your mindset is all askew and you are placing yourself into setups where the timing as well as everything else is critical - the margins for error are unforgiving.....rewarding when right but unforgiving when wrong.

(I got wacked today - I had 1% of my investing value portfolio in a stock PLV-ASX down 43% based on a broker recommendation of it being cheap and a different strategy I apply . Its in a different part of my long term investing portfolio, but clearly his idea of cheap does not stop it going down! It hurts but its not the end of the world )

Edited June 6, 2011 by SIUYA

[Enigmatics 10]

On saying all that......I understand why you are doing what you are doing and your feeling of necessity for it. With that you will always find it frustrating because you are fighting the rip, your mindset is all askew and you are placing yourself into setups where the timing as well as everything else is critical - the margins for error are unforgiving.....rewarding when right but unforgiving when wrong.

(I got wacked today - I had 1% of my investing value portfolio in a stock PLV-ASX down 43% based on a broker recommendation of it being cheap and a different strategy I apply . Its in a different part of my long term investing portfolio, but clearly his idea of cheap does not stop it going down! It hurts but its not the end of the world )

 

Cool cool .....

 

I'm not just looking at cheap though. I was trying to employ volume/price action to determine what the market thinks is cheap. Back when I used to just use indicators, that's where the "cheap" construct wasn't bonafied.

 

You went with a broker recommendation though?

 

BTW I wanted to correct myself on EBIX again. The CEO/CFO resigning was a different stock. This one "supposedly" had accounting issues per Seeking Alpha. There however has been insider buying.

Edited June 6, 2011 by Enigmatics

[SIUYA 11]

my broker recommendation is on a basket of stocks I invest in - not necessarily trade and its a completely different strategy to day trading, but the reason i put it in is to show that ideas of cheap and expensive when applied to stocks are pointless to a trader.( The stock is down a further 15% again today - I exited yesterday, as even though their fundamental long term ideas seem to make it seem cheaper to some, for me the catalyst for a stock reweighting has not materialised and so my reasons to remain in the stock have gone.....how many brokers will tell you it is cheap at $1.00 and if you liked it there its even cheaper at $0.50 and so you must really love it here, and so at $0.02 sell the house, invest it all and live in loving ecstasy.)

 

Point is that again you used the word cheap - saying the market thinks it was cheap.

 

please bear with me on this...... how do you know the market thinks it was cheap at that level? Was it short covering maybe, was it just a bunch of old orders, market weighters, people spreading against other things, option hedgers.....and who cares what the market thinks is cheap, they are long term investing.......what you are after is areas that the market will provide support.

You as a trader want to get away from the idea of cheap as it will put other connotations that might affect your thinking. eg; the market thinks its cheap therefore i think its cheap therefore if i get stuck with this its fine i can turn it into a long term investment because the market thinks its cheap.

Its too easy to go down this path, hence the reason why I suggest using such words can put your mind on the wrong mindset.....thats all ....how you do that - vsa, fibonacci, elliot wave, oscillators...whatever is not so much the issue.

 

(EBIX - i just read a report from the motley fool in it they push the idea it is cheap again based on fundamental information in it they say ""shares now trade at a big discount to where they were just a few months ago."" ......

What does the word discount imply???

is it relevant? How big a discount should it be? Is it really at a discount - or was it just too expensive before hand? Where is the bias..... as a trader you want to get rid of such words.....they often dont help

 

clearly this person does not believe the hype....a comment from a disgruntled investor on the motley website 6th June....

 

"This article is a joke. EBIX has lived and died by Motley Fool and Seeking Alpha. Raina and his so-called "board of directors" must realize that they have to live and die by rumour and speculation. That is Wall Street.

 

As for the CRM that EBIX provides: it is a joke, antique, cumbersome, outdated and just does not work. Just ask any user of any of their products.

 

BMC, VMWare and Salesforce are legitimate, transparent companies that offer a dynamic product that works. The same CANNOT be said for EBIX.

 

So please stop pontificating about this card-house company. Try what they have on offer and then write you articles about what they offer.

 

As for their so-called "growth", it is BS. Raina buys a company, slashes the payroll and calls it growth - PLAIN AND SIMPLE! Reveunes stay the same or decrease.

 

Wake up Motley Fool!"

[Enigmatics 10]

my broker recommendation is on a basket of stocks I invest in - not necessarily trade and its a completely different strategy to day trading, but the reason i put it in is to show that ideas of cheap and expensive when applied to stocks are pointless to a trader.( The stock is down a further 15% again today - I exited yesterday, as even though their fundamental long term ideas seem to make it seem cheaper to some, for me the catalyst for a stock reweighting has not materialised and so my reasons to remain in the stock have gone.....how many brokers will tell you it is cheap at $1.00 and if you liked it there its even cheaper at $0.50 and so you must really love it here, and so at $0.02 sell the house, invest it all and live in loving ecstasy.)

 

Point is that again you used the word cheap - saying the market thinks it was cheap.

 

please bear with me on this...... how do you know the market thinks it was cheap at that level? Was it short covering maybe, was it just a bunch of old orders, market weighters, people spreading against other things, option hedgers.....and who cares what the market thinks is cheap, they are long term investing.......what you are after is areas that the market will provide support.

You as a trader want to get away from the idea of cheap as it will put other connotations that might affect your thinking. eg; the market thinks its cheap therefore i think its cheap therefore if i get stuck with this its fine i can turn it into a long term investment because the market thinks its cheap.

Its too easy to go down this path, hence the reason why I suggest using such words can put your mind on the wrong mindset.....thats all ....how you do that - vsa, fibonacci, elliot wave, oscillators...whatever is not so much the issue.

 

(EBIX - i just read a report from the motley fool in it they push the idea it is cheap again based on fundamental information in it they say ""shares now trade at a big discount to where they were just a few months ago."" ......

What does the word discount imply???

is it relevant? How big a discount should it be? Is it really at a discount - or was it just too expensive before hand? Where is the bias..... as a trader you want to get rid of such words.....they often dont help

 

clearly this person does not believe the hype....a comment from a disgruntled investor on the motley website 6th June....

 

"This article is a joke. EBIX has lived and died by Motley Fool and Seeking Alpha. Raina and his so-called "board of directors" must realize that they have to live and die by rumour and speculation. That is Wall Street.

 

As for the CRM that EBIX provides: it is a joke, antique, cumbersome, outdated and just does not work. Just ask any user of any of their products.

 

BMC, VMWare and Salesforce are legitimate, transparent companies that offer a dynamic product that works. The same CANNOT be said for EBIX.

 

So please stop pontificating about this card-house company. Try what they have on offer and then write you articles about what they offer.

 

As for their so-called "growth", it is BS. Raina buys a company, slashes the payroll and calls it growth - PLAIN AND SIMPLE! Reveunes stay the same or decrease.

 

Wake up Motley Fool!"

 

Is it fair though to take one comment from a disgruntled investor as use it as a basis for contradiction?

 

I didn't use Motley Fool as the reason to think the stock was cheap. Often news is noise. I'm simply looking at the markdown of the price since it was at 30.00 and the relative volume/candle relationship to where it is now. It certainly is no valuation (at least on my end) of long-term viability of the company and stock, simply an opportunity for a trade.

 

I'm not familiar with the extent of how much reading you've done of Wyckoff's methods or VSA ..... Both methods document that Friday's candle is a clue as to the culmination of weak hands selling and smarter hands accumulating ... Someone liking those prices, whether it's for a short term reversal or complete turnaround we won't know until the story aka the price/volume unfold ...

 

Maybe "cheap" is in the wrong word. I'm looking for where there's major interest in lower prices.

[SIUYA 11]

You are still missing the point - Motley fool, broker recommendations, cheap, discount....all of these things are pointless when trading off the chart - and yet all of these things are (and correct me if I am wrong here) are things that you have brought up...?? I just thought it was interesting that someone would comment on it.

(Sorry for going on about it - i was trying to push a point - lets just forget all mention of fundamental info, other peoples recommendations and such)

 

While your basis for the the trade was VSA, these extra things sound just like justifications to help reinforce your belief.

 

At least IMHO you are using the right terminology in saying that most technical analysis provides a "clue" as to what might happen in the market, and recognizing that we dont really know until the story unfolds.

All we can do is look to participate on the plan you might have....regardless of motleys, regardless of all the extra noise.

 

 

If I am sounding pedantic there is a reason for it - but it can make a massive difference in how you approach things (get the book Drawing on the right side of the brain - and do the exercises - it should amaze you at how much this stuff can affect your approach to many things)

 

If you get back to the basics of why in this particular stock was frustrating......

 

it appears that you think (with hindsight) that your stop should have been set at a larger level - so ask yourself - why did you set a stop at 0.5%? was it based on your past back testing, your past trades, or was it just a number plucked from thin air. In the future are you going to just use a random number or pick a number and stick to it - hint random numbers can give you flexibility, but they will cause frustration IMHO - its a trade off

 

as you knew you were trying to pick the bottoms - this is a frustrating exercise by itself (even if it can be profitable) - so why should you be surprised when it turns out to be frustrating.

The stock on a short term basis is clearly in a downtrend - you choose to ignore this in order to pursue the strategy you choose - you have to accept the negatives associated with that strategy - one of those is frustration.

 

all of this is regardless of the method - I dont need to know anything about VSA, or any other method to know that picking bottoms against the trend is wrought with frustrations. Period.

 

So you are getting what you should expect from the market.......are you not?

[Enigmatics 10]

If you get back to the basics of why in this particular stock was frustrating......

 

it appears that you think (with hindsight) that your stop should have been set at a larger level - so ask yourself - why did you set a stop at 0.5%? was it based on your past back testing, your past trades, or was it just a number plucked from thin air. In the future are you going to just use a random number or pick a number and stick to it - hint random numbers can give you flexibility, but they will cause frustration IMHO - its a trade off

 

 

My stop loss over the past month or so has been because of how tight I've been playing due to previous losses. Again I'm working with a limited port size and using margin is riskier because of it. Then when my stop losses are set too tight, I'm putting too much pressure on a "perfect" entry trying to be naive that every trade involves a risk and a reward. The amount of those bouncers I've been shook out of in the past month is absolutely absurd and what got me the most frustrated.

[SIUYA 11]

ah-ha

the holy grail of trading.

you need to make sure that you have enough money to stay in the game. the risk of ruin is called that for a reason.

 

When you are undercapitalised you will always have this issue

 

The pressure of perfect entries v lack of capital v pressure of needing to trade is going to make your trading extremely difficult.....maybe a new job - for a period of time - is required.

[Enigmatics 10]

ah-ha

the holy grail of trading.

you need to make sure that you have enough money to stay in the game. the risk of ruin is called that for a reason.

 

When you are undercapitalised you will always have this issue

 

The pressure of perfect entries v lack of capital v pressure of needing to trade is going to make your trading extremely difficult.....maybe a new job - for a period of time - is required.

 

Maybe EBIX could've solved my "capital" problem. Haha

[MadMarketScientist 11]

Maybe EBIX could've solved my "capital" problem. Haha

 

Argh don't mention EBIX! I took a big loss when the fraud rumors came out ... only bright side to that story is I immediately sold at 22. I see they've slide down to 17 but had a big bump today. Are you still in that trade?

 

MMS

[Enigmatics 10]

Argh don't mention EBIX! I took a big loss when the fraud rumors came out ... only bright side to that story is I immediately sold at 22. I see they've slide down to 17 but had a big bump today. Are you still in that trade?

 

MMS

 

Actually I made money on the bounce after that precipitous drop at the end of May on that Seeking Alpha article accusing it of accounting discrepancies. I always laugh at those things.

 

I was also in it a couple days ago on June 3rd at 17.12 for a bounce, but got shook out. ..... it became part of the discussion in this thread about my approach and method. I've taken a few days off from trading so I never got back in. I was pretty confident based on the setup that decent bounce was gonna play out.

[Enigmatics 10]

Ugggh EBIX ... it hurts .... :crap:

[SIUYA 11]

were you going to hold it for this time, or are you day trading?

if you are day trading - forget and it move on to the next trade otherwise that :crap: :doh: will never go away.

[Enigmatics 10]

were you going to hold it for this time, or are you day trading?

if you are day trading - forget and it move on to the next trade otherwise that :crap: :doh: will never go away.

 

See that was one of those "daily" versions of the setup I prefer .... in the past I've only day traded the first day and not stuck it out because of my aversion to going long.

[marytee 10]

Enigmatics-- I did not see a reference to a trading plan. Do you have a written plan with your set-ups, exits, and trade/money management? If you do--and the strategies in it have been back-tested--are you following the rules religiously? Do you have your fear and greed under control?

 

I am no expert but I found that once I sat down and spent the screen time--both writing and testing my plan and set-ups--it made a significant difference in my trading. Plus I quit trading for six months in order to get my psychology under control--I now wait for my set ups. FYI--I don't trade equities; I trade currency futures for the most part.

 

Hope this helps.

[Enigmatics 10]

Enigmatics-- I did not see a reference to a trading plan. Do you have a written plan with your set-ups, exits, and trade/money management? If you do--and the strategies in it have been back-tested--are you following the rules religiously? Do you have your fear and greed under control?

 

I am no expert but I found that once I sat down and spent the screen time--both writing and testing my plan and set-ups--it made a significant difference in my trading. Plus I quit trading for six months in order to get my psychology under control--I now wait for my set ups. FYI--I don't trade equities; I trade currency futures for the most part.

 

Hope this helps.

 

Yes I've had a plan, one which I know can be profitable. My achilles heel has been my exits, particularly as I got behind on the account. It led to staying in positions too long or not staying in them long enough. I guess in some ways "time" is not on my side. My equity size was rather limited to begin with, especially after hearing what people in here have started with. I trade for income as well, which has put more pressure on me that I originally planned for. I struggle to find the proper "patience" because of it.

 

I've spent that last 5-6 days only paper trading (I know it still isn't 100% the same) after I had gotten some good advice from a new friend. I've tweaked a couple more things that should help me somewhat. Still the issue is time.

[Rande Howell 10]

I've spent that last 5-6 days only paper trading (I know it still isn't 100% the same) after I had gotten some good advice from a new friend. I've tweaked a couple more things that should help me somewhat. Still the issue is time.

 

Once you have the tweaking down, what are you going to do about the patience and worry parts of the trading system?

 

Rande Howell

[Enigmatics 10]

Once you have the tweaking down, what are you going to do about the patience and worry parts of the trading system?

 

Rande Howell

 

At the moment that boils down to finding ways to supplement my income. I can already picture in my mind how trading would be if there wasn't that kind of pressure I feel to trade for income. I could be more patient in my approach if I knew my bills were already going to be taken care of.

[SIUYA 11]

if you do have a separate income and job, it most likely would solve some of your patience in entering and exiting as you will not then have the luxury of sitting watching and being impulsive, however, you will still be impatiently hankering to be back full time trading.

It would also likely force you to really put your exits strategy into your plan - to me it seems as you have not done this - with comments such as "" It led to staying in positions too long or not staying in them long enough.""

In other words - you dont know how long to stay in trades and so have not clearly planned for many eventualities - or you have not come to accept that often the plan will get loosing trades even though the overall strategy is the right one.

Make sure your strategy is not just profitable in hindsight or with big enough stops that it becomes either unprofitable/unsustainable.

 

In an ideal world, the plan is profitable enough that we just keep applying it with the knowledge/faith/belief that over the long run it will pay off.......and in the meantime make us enough money to have an income as well, and give us peace of mind that it will work.......in an ideal world.

[Enigmatics 10]

if you do have a separate income and job, it most likely would solve some of your patience in entering and exiting as you will not then have the luxury of sitting watching and being impulsive, however, you will still be impatiently hankering to be back full time trading.

It would also likely force you to really put your exits strategy into your plan - to me it seems as you have not done this - with comments such as "" It led to staying in positions too long or not staying in them long enough.""

In other words - you dont know how long to stay in trades and so have not clearly planned for many eventualities - or you have not come to accept that often the plan will get loosing trades even though the overall strategy is the right one.

Make sure your strategy is not just profitable in hindsight or with big enough stops that it becomes either unprofitable/unsustainable.

 

In an ideal world, the plan is profitable enough that we just keep applying it with the knowledge/faith/belief that over the long run it will pay off.......and in the meantime make us enough money to have an income as well, and give us peace of mind that it will work.......in an ideal world.

 

I said I was "tweaking" .... that involves looking over charts of trades I entered, looking at my failed exits, and re-defining my terms. I've also been re-examining my setups (which often lead to accumulation phases) and looking for the meatier areas to strike instead of the high risk areas. Definitely drawing more horizontal lines than ever to improve my sell targets.

 

I don't have any doubt my method can be profitable .... I know you don't .... and that's fine. You're allowed that opinion.