Scared Money Doesn't Make Money

Over the years I've lost, refunded, then lost again enough money that my wife is angry that I'm still trying to work the stock market. I really can't blame her since she's seen nothing but failure from me; but I just know this can work and I don't want to give up.

I only share that to explain why I'm fairly gun-shy with my current trading basket of only $2,000 (can't afford another $2,500). I'm trying to cut my losses quickly because even a small dollar loss is a big percentage when working with such a small account.

I've made a series of "successful" trades this week; but not one of them could be considered a "good" trade. For example:

Today I purchased 4 AUG 465 PUTS on AAPL based on the following:

1. Daily recently bounced off 200MA resistance and all indicators are high and turning lower
2. 233 indicators already turned down and look like they will continue
3. 55 showing a FP down
4. 5 showing clear "E"
5. 13 developing the "E"

Unfortunately, I sold out much too soon and missed out on an amazing profit. Here's a timeline and my thoughts:

0930 - market opens with AAPL below the bottom BB on the 55 chart so I believe it'll go higher before resuming the fall. Large white candle is formed on 5 min chart.
0935 - candle starts painting red as stock begins to fall.
0940 - purchase PUTS for $5.50.
0943 - stock continues to fall, PUTS now worth $6.10. Feeling good as stock is immediately moving my way and I have a potential gain of $210 at this point.
0944 - stock begins rapid rise over the next 7 minutes. PUTS drop in value to only $4.90. I'm feeling very anxious as this would be a $270 loss (nearly 15% of my basket).
0950 - stock starts to drop again. PUTS slowly creep back up to $6.00 before backing up again.
0955 - candle begins painting white again and I see the PUTS drop to $5.15 (a potential loss of $170). At this point in the day, the general market is still waffling between up one minute and down the next; no clear direction has been chosen so I'm starting to get nervous.
0958 - I sell my PUTS when they briefly touch $5.95 and lock in a tiny profit of $150. It's not much, but I think it's better than the potential loss of a few minutes before and I just want out before anything goes horribly wrong.

I continued to watch the stock movement after I sold out of my position. For the first few minutes AAPL went up and the PUT price fell back to $5.00 so I was glad I had gotten out before incurring a loss. Then, just 12 minutes after I had sold, the general market and AAPL, specifically, decided to drop with a vengeance.

12 minutes after I sold out, my PUTS were at $6.90 which would have been a $530 profit.
An hour after I sold out, my PUTS were at $9.00 which would have been an amazing $1,370 profit.

My other trades this week were of similar performance. I made $79 on one (could have been about $450) and $119 on the other (which could have been about $730).

So...if I had had the intestinal fortitude, I could have made close to $2,500 this week and more than doubled my basked; but instead I only made about $350.

I'm so frustrated. I guess I should be happy that I'm starting to get better at finding a good entry point. I need to get more comfortable with letting my trades ride longer.

Rookie30 mentioned earlier in the week that he, too, is trying to get to the point of letting his trades ride longer as well; though he's far more advanced than I. So...does anyone have any advice on how to read the charts to know if a stock is only temporarily backing up before continuing the current movement as opposed to an actual reversal? Right now, because I'm so gun-shy, the (normal?) ups and downs during the day make me really nervous.

This is not intended to be negative at all and only my opinion. It looks like you are trying to trade big charts. Im not sure what chart you entered on but there is no way to determine a direction on a daily intra day. It has to be complete, for the day, to make an educated decision. Also, the price of the option should never be considered while in the trade if you are trading big charts. When you have exit criteria you simply take what the market gives you or you place a GTC to sell order of your desired profit.

If you are a "gun shy" then my conclusion is that you have not practiced enough. When you get to the point that you are surprised when you are wrong rather than vice versa, then you can put some real funds in the market. Untill then....

I hope I have helped. I havent made a lot of contributions bc most of what I read is about small charts and elimanates my opnion as others are by far the experts in that field.

God Bless,

BCT

First always make sure the market is moving in the direction of your trade.

I trade short charts but I do use the daily to see how over the last several days my stock has traded and if I have room for movement between the moving averages or if I am going to fight them during my trade. I also use these when I have gaps. I think that is what you are meaning when you said: "1. Daily recently bounced off 200MA resistance and all indicators are high and turning lower 2. 233 indicators already turned down and look like they will continue"

I think you need to decide what chart you use for entry and what chart you will use for an exit. Since most of the time I am in today out today I use either the 55 or 10 E chart for exit purposes. Most often I exit using my E charts when the 5 crosses the 10 moving average. Sometimes I exit if my stock starts to move sideways. I seldom trade when the market is mixed.

I will still refer to my 55 chart to see if it is the best exit. Any time I enter a trade I have decided where I MAY exit. For example I mark my entry with a "ray line" provided with my charting tools and if the stock gets back to that point with no signal of it reversing I am out of that trade. I look back to see about how much that stock moves in a day. I use my 55 and 10 E chart for that.

Next it is okay to look back at your trade and say "would've, could've, should've" but any time you can make $150.00 in 18 minutes you have done well! That's $8.33 per minute...or $3,998.40 per day ... almost $20,000.00 a week. Perspective you must keep perspective!

Suggestion: Stop watching tick by tick. Use you're 10 or 13 E chart for an exit. Mark your entry on these charts and when your 5 crosses the 10 exit. And yes there are times when the 5 crosses the 10 and then the stock will turn and continue in your direction...but you made money and did well. Be Happy in Seattle!

About your wife...I understand her fear. Make a deal with her that when you reach $3,000.00 (or pick a number) you will give her $500.00 to put into savings never to be touched unless she needs it. For each $2,000.00 give her $100.00 for savings. And my S/O said if she says anything about your trading she has to give it back!

Thank you both for your encouragement. It's helpful to read about the success of others on this forum so I know it can be done.

Darcy, you're right about keeping things in perspective. $150 in only 18 minutes is pretty good. I'd have to work a full day to earn that amount of money.

rufinatti, You are welcome. I had plenty of $150.00 days which built my account and confidence. Heck I had many $80.00 days and was thrilled.

Today I was set to trade...right at my broker's page when ka-boom...one of those moments when your one line carrier decides it just doesn't want to work. I have hot spot and cable but when the frustration began I silently folded my tent and went away. Frustration doesn't make a good trading partner. So do not get frustrated with what you are doing now...it will improve. Keep making the right choices for positive trades.