Ugly, Hi!
I was a little luckier in this one today. I got long at 36.01 on a break of the 6th 30 min. bar. Following the lead of Trader X, I sold 1/2 at the Fibonaci Ext. and 1/2 up a $1.00. At the time I entered the sell orders, my day had been a struggle having liquidated 2 trades for -1.8R and one other open position that was flirting with break even. This was a 2.5R trade,so I have no complaints, but I feel I left a lot on the table.

My question is: How would you have exited this trade?

Tom E

Hi Tom,
Congratulations on catching it. I would have probably sold half too soon - like when it went nuts around 2:30pm and then sold the other half at the close. If I were lucky, maybe I would have turned off the computer at 1pm and sold it all at the close. It seems like I do best when the computer is off.

Ugly,

You've mentioned in the past how you've been tweaking some of your guidelines for trading; such as not trading anymore for the day when you've had 3 losses in a row, limiting the amount of trades you will do in any one day, etc.

One thing I've noticed is that day traders tend to have REALLY tight stops. Now that is great in limiting losses but it also will kick you out of some very nice gains if the stock sets back up and breaks out, which is excatly what PEIX did several bars later.

Wm. J. O'Neil has mentioned how some of his biggest winners have been stocks where he got stopped out, then the stock set up again and he bought it the second time.

Setting hair thin stops limits losses, but it most definitely limits gains as well, IMO.

Looking back at PEIX, the first bar of that trading day was as low as $35.50. In hindsight, a stop set at $35.45 would have worked better, but it would also have included you taking on more risk.

Yes, I reviewed the trade to see what I did wrong and I didn't do anything wrong (i.e., I followed all my rules). If this type of thing becomes a pattern, I may add a rule such as, if a stock I am stopped out of makes a new high on the day, I will buy it again. I could have put the stop at $35.45, but that is not what I usually do and it wouldn't have allowed me to get as big of a position.

Thanks for the comments.