In spite of a 30% loss holding a CTB investing trade through FOMC, my net returns the past 5 weeks (14/8 - 24/9) have been 105%. Since I trade very conservatively even with my virtual account, with an average of $1000+ per trade, so a 105% net gain means I've made about $1200+ in my virtual account.
I'm quite happy with these results, and I would like to recap some lessons that I have learnt since July.
Firstly, always buy stocks that are trading very near a support or resistance level, be it the 22dma for SR or 22pma for BM. This way, it is less likely to move against you, and when it does move against you, the move is likely to be smaller.
Secondly, be very patient to wait for suitable entry criteria before entering a trade. Most likely, you will only find a suitable stock once every few days. I've lost a lot of money searching for hours and end up force-entering trades. Some days, there just aren't suitable stocks to enter.
Thirdly, always buy options with small spreads. Rule of thumb: At most 4+% of option price. A $5 option should not have a spread greater than $0.20.
Fourthly, track every trade that you enter. Write down or talk yourself through the entry criteria, profit target, stop loss before entering a trade. Never allow yourself to enter a trade when the entry criteria is not fulfilled, even if it is just a virtual trade. I find tracking my trades in an online blog like this very useful since it gives me public accountability.
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