Hello. Today was a bad trading day for me. So I was thinking I would show my chart and describe the trades I made and perhaps some of you more experienced traders might be able to fill me in on what I’m doing wrong. So here it goes:
I’m using the 2 day chart, 15 minute candles, and pivot points. I’m not using stop loss. Here is an image of my executions today.
Notice the lables B(X) and S(X), B for buys and S for sells, and X representing the order of the execution. The orange B(X) or S(X)’s are longs and the purples are shorts. As you can see I made a total of 12 trades = 6 roundtrips. 2 roundtrips were shorts and 4 roundtrips were long.
And here is the chart:
The first trade B1, at 9:15 central time occurred on the candle where the B1 arrow is pointing to. Notice the arrow only shows the time frame, not the price. The price for B1 was 13688. I bought it right after seeing the previous candle print a green overlapping the previous red. It was a bullish signal which I remembered from my readings. So I bought 2 contracts quickly at 13688. But I should have paid more attention to the brown pivot point right above, at 13690. It was a resistance point only 2 point above my entry point. A bearish signal, which should have alerted me to not buy or buy with a tight trail. And sure enough, the price dropped around that point and I ended up selling at S1, 13676, a 12 point loss.
The next trade, B2, at 10.01 C.T., and 13696 price occurred after I saw a lot of buying volume pushing the price through the pivot at 13690 and I quickly jumped on that trade, thinking back to things I heard about going with the trend and buying high and selling higher. But after just 2 minutes I got the jitters and sold at a loss, from 13696 to 13688. But I was wrong because the price fluctuation was short term and the price rose higher and higher breaking 13700. So at B3 I bought at 13700 at 10:24 C.T., but sold by 10:38 for 13701, a 1 point gain. Some reasons I sold this time was because: 1. The volume trend of that price move was downward. I read in a book that a price move up that has down moving volume trend is a weak move. 2. The price was reaching the red pivot point which I figured would be a resistance point. I don’t know exactly how pivot points are calculated, but I know they are strong support and resistance signals.
Then I got an idea that it would be a good time to short. I had never shorted before but I decided that because of the lowering volume trend, potential resistance pivot point at 13710, and peak of lunch time which I hear is not a good trading time, that these factors were a high probability setup for a short. So I decided to short around 13710. So I shorted at S4, 13707, 11:04 C.T. But I got really nervous. One reason is that my IB workstation was acting up. I had to press the transmit button several times until the transmit window popped up and I remembered that shorting carries infinite loss potential, probably irrelevant but that thought coupled with what if my connection goes out or what if TWS F's up made me anxious. And also, because it broke through the pivot point I got scared of the potential of a breakout. So I sold quickly at B4 for a 2 point profit. Then shorted again at S5 and sold at B5 for a 1 point profit. But I wish I had more patience because the price dropped all the way down to 13680. At 13680 I noticed the green pivot which was a strong support signal and the price bounced off of that. So I thought it was going up again so this time I bought at B6 for 13689, but the price was not going up so I sold at S6. Fed up with the stock market and having a total loss of $200 I called it a day and was planning on going to see transformers but decided to write this log. The lessons I learned are:
1. Not having confidence in your hardware and software can make you jittery. My unreliable internet connection, unreliable TWS software which has acted up more than once, and lack of general experience in stocks were making me very anxious. Also, lack of very specific trading plan made me anxious and unprepared. Some greed was also probably getting in the way, becuase he greed made me jump into a trade without thinking of a plan but instead thinking about not losing potential profit.
2. Pivot points are powerful support and resistance indicators.
And I have a question I was hoping someone could help me: How does short selling affect the price?
Any help, as always, would be very appreciated.