A week of review

Best two days ever were last Thursday & Friday. Monday I felt lousy and traded only part of a day, Tuesday I was sick and didn't trade at all. Felt much better today, but the trading doesn't prove it.

THURSDAY
ESLR
Cont Flag SHORT at 15.80, stopped out at 16.50 for -1R loss
I entered on the 3rd bar of a Pole & Pennant formation, hoping to get in early. I basically did this all wrong. First of all, the Pole had not carried me past the previous price action at all. Secondly, the "pennant" was not drifting up, as it should have been for a valid pennant. Finally, I placed my stop way to high. A valid stop should have been in the 15.90 - 16.00 neighborhood.

Lesson: Be patient and let the pattern form. If the pattern is wrong, then don't bother. Something else will come along.

AA 3 Black Crows short at 38.47, hit trailing stop at 37.76 for .71R gain
I think I may have gotten lucky on this one. I had three black crows coming off of two previous consecutive highs, but the general trend was actually down. My stop was a shade too tight as well. I could have picked up another 75c with a little looser stop. I moved my trailing stop tighter when I saw the price reversing against me, but it was reversing on lower volume. I could have been a little more patient and let the weaker volume peter out.

The UP bars prior to my entry were on lower volume, and the DOWN bars prior to my entry were on higher volume.

Lesson: On these candlestick patterns, try to confirm the predicted direction with the volume - particularly when the pattern isn't perfect. Also, be patient with your stop losses; if it appears price is moving against you, check to see if volume confirms, or if you might be able to ride it out.

CY
3 Black Crows Short at 41.89, hit trailing stop at 37.60 for a 5R gain.
I did this one right, but I also got lucky. I caught it just before it fell off a cliff, and rode it almost all the way to the bottom. This is how to do it. The formation was very strong, not contradicted by the volume, and I got stopped out not just on a rising price but on rising volume as well. My best performance so far.

AA
I thought I got stopped out too soon, (and I did), so I jumped right back in with a too-tight stop for a .07R loss. The lesson is that my stops were too tight.

FRIDAY
ODB
Continuation Flag Long at 17.82, hit trailing stop at 18.50 for a 6,8R gain.
The flag pattern on this was just right. I got in several bars late, but the "pennant" formation had not yet been broken - it was just an extended consolidation that I picked at the right time. My trailing stop maybe could have been looser, but I got almost all the rise on this one.

Lesson: Perfect formations are worth the wait.

WB
3 Black Crows Short at 39.52, hit trailing stop at 39.10 for a .8R gain
This was a good formation and I caught most of the move. My one regret is that I missed the reversal. It also gave a good strong signal, (3 White Soldiers), but I was already out and looking elsewhere.

Lesson: Perfect formations are worth the wait, and when you get stopped out, see if the trend is actually reversing with a strong signal to go the other way.

XMSR
No Good Signal Long at 14.67, hit trailing stop at 14.74 for a .3R gain
I should calls these NGS trades. I don't know why I pulled the trigger on this one, other than that it was rocketing up, and I was pretty sure I could protect myself on the downside. As it was, I got lucky. There was no strong signal here. I'm not saying a moonshot bar is not a valid signal, but it is not a strong signal.

Lesson: Sometimes its better to be lucky than good, but luck runs both ways. NO UNDISCIPLINED TRADES!

MER
3 White Soldiers Long at 53.17, hit trailing stop at 53.69 for a 1.5R gain
Again, I had a nice strong formation. I got into it a little late, but I still caught a nice ride up. The stop again may have been a little loose, but I am very satisfied with this trade. However, I missed another 3 White Soldier and hour or so later.

Lesson: Good patterns are worth the wait. When you get stopped out, watch for reveral confirmations.

MONDAY
AEL
3 Inside Up Long at 8.85, hit trailing stop at 9.10 for a 1.25R gain
I actually got into this trade thinking it might be a multi-day trade. I chose it because it had created a Three Inside Up pattern on the daily chart. I was right about the direction but wrong about the timing: as it turned out, AEL went my direction right away and I got stopped out with a nice gain.

Lesson: The perfect pattern is your friend.

HL
Cont Flag Short at 10.87, closed it at 10.80 for a 1R gain
Cont Flag Long at 10.71, hit stop at 10.68 for a -1R loss
Cont Flag Short at 10.69, hit stop loss at 10.82 for a -1R loss
I just screwed this one up royally. My first trade I intended to go short. When I realized that I had done the "wrong thing", I immediately closed the trade for a small profit. If I'da been paying attention, I would have realized that my initial idea was wrong and that the Trading Gods had been merciful on my stupidity by letting me get out with my hide intact. But no, I was so keen to trade trade trade that I jumped right back in, this time long, and got hammered. So now I've done two trades wrong and managed to still be at Nothing Lo$t. But I wanted the trifecta, so I jumped in AGAIN, for no good reason that I can see, and The Gods took my head off this time. I deserved it.

Lesson: Undisciplined trades and trading is the sure road to ruin.

DOW
Three White Soldiers Long at 41.54, hit trailing stop at 41.58 for a .08R gain
This is supposed to be a reveral pattern, and I think I actually hit it right. The problem is that it was a really short and small reveral. I managed to get out without losing any money - just covered expenses.

Lesson: Perfect patterns are not infallible. That's why we have stops.

DELL
Continuation Flag long at 27.39, stop loss at 27.34 for a .17R loss.
This pattern was good, but not perfect. I set my stop loss just below the fabric of the flag, where I got taken out - thank God - and only suffered a small loss for being wrong. In retrospect, although the pole of the flag was plenty long enough, it had failed to take me to a new high past the previous swing high - which is one of the rules. I violated that rule and was fortunate to have a tight stop in place.

Lesson: Those rules are there for a reason, son. Don't be a dope.

WEDNESDAY
This was my "I got up early for this?" day. I hate to even write this stuff down, but it is instructive to do so. And since I'm not gonna get anything monetarily positive out of the day, maybe I can at least learn something.

OVTI
Gap & Trap Short at 20.98, hit trailing stop at 20.53 for a 2.25R gain.
This should have been my one and only trade for the day, but I took this trade because I was practicing my execution. I wanted to try to place a trade that was a combination of One Cancels Others and One Sends Others. I wanted to place a trade that would trigger Long if the price went up and Short if the price went down. Whichever one got triggered, the other would cancel. Then, whichever one got triggered, I wanted to send an automatic stop loss order. I picked OVTI mainly because it was cheap and I thought it would be "safe" to practice on. I only did 100 shares on this guy - because I was practicing - and watched my trade execute perfectly. The only problem? This guy decided to RUN and coulda made me a boatload of dough if I had been playing a normal position size and using normal Trailing Stops. But I was just trying to figure out how to execute the trade, so I got out pretty quick. Stupid, stupid, stupid.

Lesson: Don't leave money on the table for stupid reasons.

PCS
3 Black Crows short at 17.84, hit stop loss at 18.20 for a -1.2R loss.
I mistook a continuation flag for 3 black crows and got rightfully taken out.

Lesson: 3 Black Crows should follow a smooth uptrend, not a flag pole.

NTAP
Cont Flag short at 26.56, stopped out at 26.96 for a -1R loss.
I don't think I misread this one. I was just wrong.

AES
3 Black Crows short at 21.95, stopped out at 22.05 for a -1R loss.
I think read the pattern correctly, but I was just wrong. When that happens, I just accept it as the price of playing the game. The one possible signal I missed is that the downward movement occurred on lower volume.

Lesson: Check the volume to confirm the price direction.