I believe that being patient and disciplined especially when swing trading over a couple of days, weeks, or even months is maybe the most important thing a good trader needs. When i traded KOP, I was not patient at all and it cost me an unnecessary loss for me. I used the same pattern and strategy for this trade as i have all my others but for some reason i got undisciplined and panic sold when i really did not have to at all.
After my loss, i checked the chart about a week later and noticed that the stock had done exactly what i expected it to do when i initially bought the stock. this was a very good lesson learned, for me t be more patient and only cut losses when a true sell signal is generated.
As you can see here from the chart i recognized a very nice inside trading day reversal signal. Once the stock closed above the 8 exp. moving average it was a buy signal. Now at this point it was way off its highs and far removed from the 50 simple moving average. So i expected it to return to that price level. However once i bought the stock we had a small day of indecision(arrow) which caused me to believe that the move was not as strong as i thought so i took a very small loss. But as you can see right after the stock started up trending nicely to and beyond the red 50 simple moving average, which was my price target in the first place. There was absolutely no reason to take a loss on this trade in fact it would have, could have, should have been a nice $1.50 a share profit.
No comments:
Post a Comment