Tuesday, April 27, 2010

Need for discipline

I was stopped out of my MEND position this morning because my stop loss was too tight. In stead of placing my stop loss above the swing high as I would normally have done. I used intra-day resistance so that I could put on a larger position on. Need less to say this plan back fired as MEND moved up just enough this morning to stop me out without invalidating the trade then selling off along with the overall markets.

The second instance of my indiscipline that I needed to mention concerned the three latest long positions I put on: CELM, MSPD and DLLR.

CELM triggered and hit my target the same day. I took profits thats fine.

However, I closed out the MSPD and DLLR trades because I was too impatient. So I took relatively small loses on both of these positions. However, had I stuck with my original plan, I would have made 3R+ on the MSPD trade (MSPD is up over 18% on the day as I write this) and taken a 1R loss on DLLR. The net result would have been 5R+ or $500.00+ profit instead of the $220.00 profit I ended up making.

So this is a good lesson on planning your trade and trading your plan!

I hope I have the discipline to put this into practice from now on.

Until then, good luck and good trading!

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