223552 

Do you use 14 days? Also is the stop loss triggered when daily close bellow ATR or even intraday fall bellow? Thanks Felix

I use a 20 day atr period because, I also use a 20 breakout period. I close out the position interday if a price trades one tick below my 2ATR stop.

Fourwedge 

I use a 20 day atr period because, I also use a 20 breakout period. I close out the position interday if a price trades one tick below my 2ATR stop.

Cool, thanks. I will play with it in the future.

Good Luck with you trading!

Went long KMD 150 shares on 19/12/12 at $1.535, The stock broke above s/r of $1.52 on 11/12/12, I did not see the breakout, and by the time I saw it, the stop was just too far for my like. This has formed a head/shoulder pattern over psat 12 months.
The stock went down yesterday, and was spending first half of the day under the s/r line, and even touched the low of the break out candle of $1.495. I was thinking of buying it then as it was close to a stop loss of a potential buy signal. However, I decided to wait and see what happens, if it closed bellow s/r line I would have waited for a 2nd breakout and traded it then, or if it went up, and looked like it would close above s/r creating a long tail (another buy signal), I would enter the position then.
2 nd scenario played out, I went long, with bigger stop loss, but more confidence in my long position. Stop $1.495, Target $1.70, then $2

SUN is an existing position, and has given me another buy signal today. It has been going up strongly since I bought it, and had a small retracement past 10days. To me it looks like a perfect place to add to my position. If I get a good chance then I will, but since I trade small quantities my potential upside will be nearly completely reduced by my commissions. I may make a paper/mental trade with this one. I am currently up $50+ and stop moved to $10.40
On chart E is my original entry, E2 id the new buy signal, which is todays strong move up, on large volume.

Still watching AUD/USD pair, I will most likely go 1 mini contract long, with stop $1.045, it has retraced a bit giving me a much better entry point, with smaller stop loss.

Finaly took the AUD/USD trade today. As I said before, I saw a breakout a few days ago, but my stop loss would have been too great. Today the stock reached aroun $1.046, and I went long 1mini contract at $1.0467, with a stop of just under $1.045.

This will be my final planned trade for the year. I currently hold 10 open long positions, and 1 FX position. This is the limit of my comfort zone. I have been searching for a short position past few days, to hedge all my long positions, but could not find anything, and instead there seems to be a sea of buy signals, including adding to my existing positions. With holidays approaching, and BUB No 2 due in 1 week , I decided to just manage the current positions, and put market research to rest for a few weeks. I will still watch the market as much as I can, and adjust my stops on all current positions as they change.

So far December has been my best month! On paper I am up $350+!! I am a bit surprised, since past few weeks, every stock I bough has gone up. I also think its a good idea to take a little step back, so I don't start making reckless trades. All current positions are positive, 6 positions have stops above my buy price, 2 are at break even, and 2 bellow my entry point. My biggest problem right now is high transaction cost compared to my trading profits/loss, but nothing I can do about that for now. If nothing happens next week, my next post will be December stats

Nothing brings you down to earth faster, than a lesson from the Markets. I might have wanted to take it easy, and step back, but today I learned that Markets don't have a holiday, volatility doesn't have a holiday, news don't have a holiday. Today I realised that the only way to have some quiet time, is to not have any positions.

I got stopped out of 4 positions this morning. It came fast and hard, and I had no idea what was happening. Literally with-in the first 5 minutes, 3 of my biggest gainers were sold. In my trading platform I set an automatic stop loss, it gets hit as soon the price gets there. I thought I had sufficient room for movements in my stock to safeguard me from some volatility. But I forgot to account for dividends..... Today 4 of my stocks went ex-dividend, 3 dived down and hit my stops. This was a hard lesson, as I left a lot of profit in the market, and got stopped from positions which I should still be in. I also spent unnecessary money on commission....

3 new lessons for the future now:
1. If I want a break, I get out of all positions
2. Part of my stock selections/trading must included dividend dates/amounts, and my stop loss around those times should be adjusted accordingly.
3. stops review - my stops are 2 actually 2 stops, 1 is based on a closing price bellow my stop loss. 2 is an auto stop, a few points bellow that, in case of increased volatility. This needs to be reviewed, and my auto stop loss needs to be properly examined. I will look into ATR to help me determine my auto stop, to guard against volatility. Auto stops get hit automatically by my trading platform, and my other stop get executed on my decision, if a closing price is bellow it.

AUD/USD went past my stop loss of $1.045, loss of about $25, I am still watching this pair, if there is a daily close above my stop, I may go back in. I got stopped on intra day dip.

APA was my biggest gainer, and has been going up strongly. It went ex-dividend today of $0.17. My stop was $5.40, but for volatility it was set at $5.35. With adjustment for dividend, I should have had my stop around $5.25. If that was the case, I would still be in it. I may still go back in. I got stopped at $5.35

Total profit for this stock is $33, and $17 in dividends,

AAD stopped at $1.41, I had my stop at around $1.425, and had it set at $1.41, it paid $.066 dividend today, and stop should have been somewhere around $1.33. It would have been hit anyway, as the stock had a huge spike down. But I would have felt fine about, if I followed my rules.

Total profit $26, and $26 dividends


CRF stopped out at $2.25, I had my stop there because of a large break out yesterday, which is also another buy signal, but the real stop should be recent lows of $2.24. This was overconfidence placing stop too high. Paid dividend of $0.066 today. It has not gone bellow $2.24 and is still a good buy signal. So I am watching to go back in. OR if I want a break, then let it go for now.......
Profit $20, $13.5 dividends

Feeling very disappointed today, struggling to get my thoughts together, and plan the next step. I will probably manage my positions for now, until I can gather my thoughts and put a proper plan in place. This was overconfidence in myself, and the markets. It has cost me dearly, and I left around $50-70 in profits in the market...
If I was trading at multiples of 20, ( which is what my aim for 2013) that would have been $1000-1400 in profits...

A painful, but a valuable lessons. Further confirmations to keep my trading sizes small for another 1-2 months, and not get overconfident.

Another positive month. I went into December in a very good position, and was going well through most of december, until about 10 days ago, when a few of my stock got stopped out on large swings. This is my fault, and has added another step to my trading. I did not account for dividends, and in 1 day 3 stocks went ex-dividend, triggering my auto stops. In the process, I got stopped out prematurely of positions. This has led to new rules in regards to stops. It will be a 2 step process, auto and manual.

December stats
Total Trades 6
Winners 4/losers 2
66% win ratio
Total Wins $129.75 + $56.6 dividends = $ 185.35 Average per trade $32.43 without div, $ 46.37 with div
Total Losses $23.69 Average per trade $11.85
Co-mission $80 , Funding costs $11.59

Net win $ 161.66, less cost $80 + 11.59 = $70 !!!

December was not just a positive month, but I actually decreased my losses, on Paper I am now in $-950, however, I do have 8 positions open (8 x $8 commission = $64) and on top of that if my stops get hit $100-120

The plan for now is to have a positive January, and then possibly double my position size. So my stop loss will increase to about $30. If I increase my position sizes, I may also need to review my broker, so far my commission is fairly low, but interest charged on my longs is starting to increase

Very happy with numbers, I currently aim for a stop loss of no more than $15, so well with in my targets. My profits per trade have also nearly doubled from last month.

I took 1 stupid trade in December , SGP, i bought in prematurely, before there was a clear buy signal. Luckily it has gone up, and since then has given me two buy signals.


New Lessons rules
1. Be aware of dividends dates, and if no announcement is made, check announcements either weekly, or bi-weekly.
2. Together with above, I will be checking news/announcements for any takeover, mergers etc. to reduce chances of wild swing and my stops being hit unnecessarily.
3. Stops, there will be 2 stops now STOP1. I use a close above/bellow recent lows/highs or highest/lowest point of a break out candle as a stop loss. If my position closes below/above my stop, it get liquidated the next morning. STOP2 in my platform I usually set an auto stop to get me out of position if it gets too volatile. This was never based on anything specific, and was usually a few points away from stop 1. This will change now, and STOP2 will be 2ATR over 12-15 day range (still in progress on decision). The lowest/highest point out of the 2 stops will become the auto stop. Stop will also be adjusted if I know stock is going ex-dividend.
4. With firm stops in place I will now know exactly what my potential loss at any day could be. I will need to monitor it every few days, and I will use this for decision making on when to open more positions. I am not exactly sure what to set it at as yet. ( for example if my paper profit $300, I allow a max $150 and have open positions up to that level based on where their stops are, once my stop move up I can open more positions etc)

I began properly trading (sort of like a job, rather than a hobby....) beginning of July 2012, I made a decision, that trading is what I want to do, and instead of gambling (which is what I have done for past 10 yrs), to approach this like a school. Get textbooks, read, learn, and practice. I also decided to give it 6 months, trading with real money, and if I could see the potential then continue, otherwise back to studies, and paper trading.

first 1-2 months were massive losses, and that has taught me a lot of lessons, I had to decide on what was comfortable for me to loose per trade, and work my way from there to positions sizes, risk/rewards etc. I am constantly learning about charting as I read more and more books. Then, losses started to reduce, and last 2 months were profitable. This is probably a combination of luck, current trend and my trading. Ultimately if I am profitable over a longer period of time, it will be less luck and trends, and more my trading, but time will tell.

Firm lessons in place now are: certain ways I chart, and stops.

Where I am still very uncertain is stock selection. I am trading a few different patterns now, and I understand that some will work better in certain market conditions then others. Only time will probably help me here, as I build my experience.

Plan for January
Monitor my positions for the first 1-2 weeks. Bub #2 is 3 days overdue now, and could arrive any minute now, after that, I will be lucky to stay awake for my day job!!! Once everyone settles, I will get back into scanning and new trades.

Looking forward to 2013!!!

USD/AUD I have been watching this pair for a while now, and even tried going long in December, but was stopped out. Well its on the move up now! I have been too busy with our newborn (Zac!!!) to pay any attention to the markets. Too late now to go in (one of my rules, is not to chase a missed trade), but will watch it for opportunities to buy along the way. Target is $1.20

8/1/13
2 positions closed, both based on volatility auto stops.

SGP was entered prematurely and was s stupid trade for December 2012. It then gave me 2 buy signals, but being the end of the year, I decided to watch, and not trade. Stopped at $3.45 on sharp move down. Small profit $5.20 and also got dividend of $15.60.
The stock is moving up again, on increased volume, and I will look to go long again, if I get a buy signal.


GPT stopped out at $3.58, tiny profit of $1.20, and dividend of $6.

Lessons:

ATR stop loss - is starting to get more confusing than helpful, I understand its a trailing stop, but its is not helping me right now. The stop loss moves, up and down, and there is a sharp change in directions, it will move over to the other side of the candle.......) I have switched to a Volatility Stop Loss with SAR (stop and reverse), it is much smoother, and less jumpy. Using 2 ATR with 21 days.

Stock that have been stopped out off, are still high on priority list to get looked at regularly. I have noticed that when a stop is hit it does not mean that the trend is over, it simply means that stock is hitting turbulence/volatility and if opportunity presents, I will go back into it.

16/1/13

Went long MQA 300 shares. The stock has been heading up and has given a buy signal late December, but I waited till it broke a major s/r at 1.67 at the end of December , forming a head/shoulder pattern over a very long period. I did not see the break out and when I saw it I bought on 16/1/13, using the low of break out candle of 28/12/12 as a stop. I also placed an auto stop at 1.635 using my Volatility stop. It got hit the next day, with the lowest price of the day being 1.635, that day was a big candle up, which I now use as a confirmation of the move. I will now sit and wait for a better opportunity, Loss $12
I have also adjusted my Volatility stop to smooth it out further, going to 25 days and 2.2ATR

17/1/13
CLosed 2 positions, when they both reached their targets
WDC reached 11, and I sold it at $11.10. Profit +$ 46.50 - $10.50 for interest because of small intial position, and $11 being a strong s/r line from the past, I decided to close the position, instead of closing half, and if another set up occurs I will go back in.

SUN reached its target of $11, and was sold at $11.10, I should have sold half a position, but in the last moment made an emotional decision and sold the lot, there is further upside with target of $14, if I get an opportunity I will buy. Profit +$120 - $6 interest

I need to work on my action plan not just for stops, but when targets are met as well. Trying visualisation exercises now for both stops and targets.