Some Things to Work On
by Cliff Clark
Along the path to becoming a successful trader there are things we must learn and develop. Here is a short list of things we need to work on everyday.
1. Being able to observe yourself.
2. Developing patience and discipline.
3. Accepting that you alone are responsible.
4. The ability not to panic.
5. Learning there is no magic system or guru.
6. Having trust in yourself.
7. Being able to stand up again, after being beaten down.
8. Being lucky from time to time.
As you read through the list they mostly go hand in hand. They all come down to what we have discussed in previous articles. You can learn to observe yourself through a trading diary. Your plan allows you to develop patience and discipline. It also over time will give you a sense of confidence that will allow you to get back up when you have those days where the market beats you down and to not panic. With your new found confidence you will soon learn that you no longer need to chase that magic system or guru that will make you millions.
What does being lucky from time to time mean? I've heard it said in the trading room I always seem to be in the right trade. Am I lucky? Yes I do believe that I am very lucky. But I also believe that I find my own luck through my trading plan. With experience and confidence comes good luck. You will develop the ability to find the right trades at the right time.
Have you noticed that in these articles we almost always mention the trading plan? Are you getting the idea that you really need one? That is the point I am trying to make. Almost everything we do is driven by our trading plan. If you haven't already started one I'd suggest you get started today.
2 trades for me today with +1.5R total
1st Trade QCOM +2R
148.39/149.97 exit 143.25
12% gap down under pivot support and 50ma after a strong daily double top rejection,. I took it on a congestion breakdown with a fairly wide stop, leaving my 2R target 50c over its ATR, slow but consistent move down with great RW, hit my target on the penny before it bounced.
2nd Trade AQB -0.5R
9.40/9.70 exit 9.56
I rarely trade stocks under $10 and even more rarely short them. I liked this daily chart as it broke its uptrend channel and stayed under a strong 9.50 support line enough room to its daily 50ma. I entered after a pullback with a fairly wide stop but only 1/3 of its ATR used at the time. It failed to break down with the strong market open and stayed in a narrow range.
I actually broke my plan with this trade as I lowered my stop to a pivot where price made a big bounce earlier at 11am with a large seller sitting there. My thought was that if it breaks that level again then it will likely...
1 trade for (-1R)
I took a BD on QCOM. I was worried about the target being close to the daily range, so I took a tighter stop on the 2 min chart. I am looking through PTS right now, most of the examples have 2 options for where to put your stop. It looks to me like one of the stops would be at the bottom of the main consolidation area, and the other at the bottom of where there has been a shakeout or turnaround bar (if there has been one). Due to the daily range I took the tighter one on this. In hindsight it seems obvious to take the wider stop, but in the moment it looked ok.
I was then looking at the 15 min 3BP on QCOM, but the reason I used a tighter stop in the first place was because of the range. The 15 min 3BP would have needed to have gone even further than the wider stop on the 2 min BD, so I didn't take it.
