PTR surprised me. It had gapped up two days in a row, and still did not close the gap. I got stopped out and learned a valuable (and fortunately not too expensive) lesson. Here’s the setup:
I shorted PTR and set my stop-loss at about 1/4 of an ATR above my entry, (about 25 cents). The trade went a little ways in my favor, then turned around and went against me. I watched it HIT my stop-loss point, but no trade was triggered. “WTF?”, I think. Then I check my stop-loss. It was a DOLLAR higher than I had intended. The market was moving fast, and I was doing my best deer-in-the-headlights imitation. The end of the story is that I got stopped at the higher point and had a 5R loss rather than my planned 1R. That’s the bad news. The good news is that I took DR Barton’s suggestion and have been playing very small positions till I get the hang of it, so I only lost about $70, but…
…if I had been position sizing as I intended to, that would have been a $5000 loss. Yikes!
Moral of the story is to make sure I understand my platform defaults. Traders Workspace, which I use, defaults an offsetting trade to a dollar difference. I simply failed to check the actual price I entered. Hopefully I won’t make that mistake again.
I had hoped to trade CROX this morning as it had gapped overnight. I was planning to short it at the open, but it took off in the opposite direction. In fact, it was so fast it awed me. I know I’m new to this game, and perhaps what I saw this morning was just SOP, but I could not believe how fast this price swung. It opened on a gap of about a dollar, immediately rocketed up another buck, came back down about a buck and a half, and went back up above the open, all in the first five minutes. I assume some day I will be confident enough in my decision making and execution skills that I can make money on something like that, but this morning it looked like a rampaging flood that I was not interested in trying to wade through.
Shorted ACH on a gap this morning and got stopped out at 1R. It wasn’t a great trade, but it was the best I saw this morning.
Question: Did any of you guys ever get DR’s “basket of stocks” he promised us?