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Diary of a Wannabe Day Trader |
| Category: Trading Diary |
Published: 14-12-2007 |
By: marant |
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Background. I am predominatly a fundamental trader but I wanted to try and learn
and understand more the concept of day trading and using Technical analysis. I
have been practicing for a bit using Topstocks stock prediction tool to see how
I fair with my research. Been around 6 months of giving the 9-12 days a bash and
not doing too badly. I think I am around average with a success rate of 35%
which is comparable to most of the posters here. Admittedly I am not solely
using the predictor for short predictions so my % might be far worse.
Nevertheless I am doing not bad. My main reason to day trade was to was to try
and add to my fundamental knowledge on researching stocks. Picking the right
entry point, looking for signs that may help you in determining if a share is
about to run or
has had its run,
accumulating on retraces or even worse going wrong. Yes sure if you are along
term trader you should not grapple in the day to day of stock trading but the
tools used could still help so I wanted to give it a shot.
I always believed
that knowing how to utilse both TA and Fundamentals would really enhance my
ability to manage my portfolio.
Anyway I made the decision that while on my
annual leave I would just give the day trade a real go and see how I faired. My
thinking is that I will only learn fully by comiiting real money into it so I
can experience the emotions of it all which I think would play heavily on my
decision making. I had set aplan to try and nulify the emotional aspect but that
was to prove unsuccessful.Anyway below is how I went.
Monday 16th of July
Ok I have just started my two weeks annual leave and today I am going to put
my little technical knowledge that I have been studying to play. My experience
in graphs is very limited so I thought I would look at the aspect of momentum
trading. First cop out.
My plan was to watch two or three stocks which had
positive trends or trend reversals in the positive and then for noticable volume
. I would then place my bid
based on the sp movement
and set my profits to 8.5-10% and my loses to 5% with 10k entry points. I just
worked out how to put stop losses online and profit stops. Sounds all good. I
have a plan!
Sifting through my watchlists of certain stocks , I notice
MCL. By lunchtime it has traded around the total it has for the last week around
1.5 million shares. I notice a nice steady rise since the 10th of July and today
excited me as it hit a new high of 3.9 cents and looked like it was ready to get
through 4 cent barrier but retraced back down which is where I thought goody.
Reading the announcements, there is none. Look on here, usual pump by some but
some was actually quite useful. Listened to Mr Sos broadcast and decided there
is alot of potential. Get on procharts and draw some lines so I think it looks
like a pennant. I wish I could post them, you would piss your pants
laughing.
Ok where do I get on?? I said ok opened at 3.4 gone up to 3.9. I
will put in a bid
for 150000 at 3.7.
I wanted to do double was **** scared....the emotions are
already at play. Wierd...put 10k on stock I have alot of confidence on dont
bother me. Placing it on a stock due to pure techy plays is like going out with
no clothes on but I felt confidant that this would start moving.
13.30 comes
and up comes the email that I have done it. Im in. All of a sudden Im starting
to get a little edgy, excited scared.A new experience trading on stocks on a day
to day basis. While this was happening I am tending to my daughter (on school
holidays) who is already got the shits up because I wont help her get through
her Bratz game on the playstaion and she was hungry so I whip out the simpson
noodles. Nice and quick . "Here ya go leave Daddy cause he needs to make some
money to buy you the new bratz game.
I put my plan in. If it drops below 3.5
cents Im out and if it hits 4.1 I am out. Thats the plan and I am sticking to it
hard.
I just realsied a compulsive disorder beginning to emerge. I spend from
14.00 to market close pressing the refresh button to watch the share price. This
was fn sad. I think I pressed the refresh around 1000 times. End of the day at
3.6 cents.... **** thats not bloody good. Well at least the volume is over 5
million and the price finished above that makeshift pennant I created. Might be
alright.
Look at the time...crap! Wife is coming home. I give my daughter 2
bucks and tell her to help me clean up...jam all the dishes in the dishwasher.
Pull out the vacuum cleaner and leave it in the kitchen. This was just to say to
the wifey that I was going to vacuum but no time as I was helping the little one
out with the game.ERRRm.
Tuesday 17th July
I spent the whole day...yes
the whole day refreshing.
I need a new mouse. My daughtter hates my guts, the
vacuum cleaner has not moved so I move it around the other side of the kitchen
and brush the dirt with my sock and put in the laundry.
I already bent my
first rule. The stock hit 3.5 cents for a while. I should have stuck to plan but
nope....I will make my stop
loss a convenient 6-7%. Wow the sp goes back up. Good one, I know
what Im doing. (yeah right!)
Close of market after hitting 3.8 cents and
finishing at 3.7 cents with a vol of around 5 million again I am feeling more
confident. Go on to Topstocks to read the reasuurances that all is going well.
Oh well I m no better off that I started on Monday but I am no worse off
either.
Wednesday 18th July
Wake up all revved up... Today MCL will break
the 4 cent barrier and I will be champion!!!! It opens up at 3.9 cents...oh yeah
my hearts pumping. It hit 4 cents and sits there. Again refresher
syndrome....ahhhh this might turn. Its hit the psychological barrier and might
retrace.... here come my next plan breaker....I will sell half at .04 cents and
I do. Why, safety blanket. Made me feel better but again, broke my plan. Oh well
let the other half go and see what happens.
While this is happening I see two
other stocks hit my radar. AGY and GTE. AGY the classic pump and dump stock and
it was being pumped bigtime and GTE just on the retrace from its IPO opening and
a reversal
of sp with well over the
normal amount of shares being traded compared with the last week.
Ok I will
put in a bid
for AGY at 50 cents and GTE at 32 cents. Lets see what goes. I now have put 10k
bids on both. MMMM forgot to put in a plan to limit the amount of money I play
with....not even my money really as it sits in cyber space for 4 days before
settlement so if all went wrong would flog off some of my portfolio to
accomodate. Hey Im in the black by a bit so a couple of grand loss wont hurt.
Yep this is dickhead talk.
Seeing both were running a bit I thought ahh wont
happen...but it did. That stupid little dog
comes up on the screen (my wife likes that fn incredimail).
Yep now I am
really feeling the mixture of emotions.
Can you imagine what happens to the
refresher button now? Now I have the ASX open, my
watchlist, Topstocks, Procharts, Yahoo finnance,my trading account. This is
really getting full on. Oh yeah my daughter is here. I am feeling really guilty
about this too but not enough to stop me pressing refresh till market
close.
Day ends MCL at 41 cents, GTE at 31.5 cents, AGY at 52.5 cents all
with good vols. I am pretty relieved here but the night would be a restless one.
My biggest fear was AGY as I know what this stock has done in the past. I was
fortunate enough to jump off at 1 buck. I cannot break my plan with this one.
Yeah right wouldnt karma come along and bite me on the arse for selling my stock
at 1 buck to some poor bugger just before the big dump to mid
20s.
Thursday 19th ....to heaven and hell in a day
Wake up. I am
actually feeling quite queezy here. MCL and GTE really seem ok. I have set my
stop/profit losses here so if it hits I still make something. AGY is really
bugging me. Market opens......
OMG. comes out and hits below 45 cents...damn
Im out and at a loss....I set my stop at 48 cents. Go to check...it failed. Now
this is something I dont know and need to workout why. ****!!! Go back to see
that its back over 52.5 and running like a dog.
My 55 cent posi is coming. Bang it hits. I just made my first trade. I am
pumped!! All for a bloody grand! What do I see... its still running like a
dog.
I am so hyped at this moment I put in another buy position at 61 cents at 16500.
Bang it hits. At this time I am about to set my sell limit at 66 cents.....nah
its running so hard lets leave it run. This
would prove to be my biggest mistake. I say to myself I will watch closely.....
"Daddy I really need to go to the toilet"...ahhhh!!!!..."daddy I think I am
going to poo my pants."...OKAY. Take her to the toilet come back what do I see.
Has gone up to 68 cents and now down to 60 cents. **** if I had set my 10% limit
I would have bagged another grand!!!!" Nope its just a breather." Wrong. Keeps
sliding. Release comes out. Why am I still hanging on, its now 59 cents and I
kid you not within 30 seconds it was down to 50 cents and I pannicked and dumped
10000. Yes I should have been all out at 59 cents my next biggest mistake. So
from a two grand profit I am now in deep bloody ****. Now the biggest kick in
the balls. It bottoms out at 48 cents and then before you know it back up to 58
cents in a jiffy. This is unbelievable. This really frazzled me. All the
emotions are set in again and really I am now out of control with my thought
processes and I am hanging on breaking every bloody rule. Market closes I am on
6500 shares and I am my hand holding my kahoonas....really really hard beacause
it felt like I had been nackered. I had a pain in my guts you get from getting
hit there..i kid you not.
I collapse in my chair. My daughter can see I am
distressed and asks whats wrong a...."Daddy just lost some money, sweety and is
upset". You know what she does. It freaked me out and really put things into
perspective. She went into her room , and comes back with her Dora money box and
says, Here daddy you can have mine". She is my four year old little angel.
By
the way my MCLs hit 4.3 cents and my GTEs hit 34 cents ( I set this a bit lower
to ensure I countered the AGY loss). I have put an on market sale of AGY as I
have just realised that I spent the whole week at home and did not do one thing
with my daughter. This actually was my biggest loss of
all.
Incredibly I will have come out of this near what I went in. I
have to admit the experience was exciting and I wont lie that here and there I
wont do a play or two but as a full time thing probably not.
I take my hat
off to you day traders. This is an art that takes some mastering especially
disciple and emotional control. The thing I learnt most, is:
1)Have a plan
and set rules. This takes out the emotion.
2)Set your loss and profit goals
and dont budge as this is where emotion comes in and completely clouds your
judgements,
3) Dont trade on school holidays if you have kids. Seriously
though the time you spend with them is priceless and no money can replace the
time lost.
Ok I am off to bed. I am completely stuffed and emotionally
drawn out. Its off my chest now and I am more than happy to cop critisism over
my efforts. I am sure the Analyser will go I told you so and fair
enough.
I am going to take friday off and spend it with my angel.
Hope
you had fun reading. It was a ride and a half and stay away from AGY unless you
know what you are doing.
Cheers
Nick
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