Later in the morning, I bought  FAS (Financial Bull) at $62.00 and sold it at $63.

This was the best trade I have had yet and gave me confidence in the midst of having a down morning. I sold 100 shares at .20 because I wanted to pay for the trade.  I entered the trade because FAS was a significant level and XLF, who correlates with FAS was showing strength. It is important and I learned that in a trade like this, you can use FAS and the market to help you see what it is going to do. when the market was going up, XLF was showing strength to the 12:50..which showed me that FAS would keep moving as well. What a great lesson to learn in a good trade. I let FAS run up because the market and XLF showed me that.

I learned today that the market doesn’t care at all about your previous trades. I had two trades that put me down and one trade that gave me it all back.  It is important to trade like a defense back in football…you must forget the last play, even if you got burned. Never get down about a trade. The market will offer another opportunity, it’s just important to keep your head up and your eyes open.  Just like the DB, the next play could be an interception returned for a touchdown.

Also, my best days have come after big losses in the morning. I want to trade like I am down on the day. It makes me really think about trades and the reasons why I am getting into them.

As the day went on, I re-entered FAS at 65 (Not shown on the graph) and ended up being another great trade. I was very cautious in getting back in because chasing a stock has not gone well. As I mentioned earlier I was looking at the market and XLF and they were both strong, so I re-entered in.

What an exciting day, started out as my worst day and turned into my best day. A great thing to remember is that every trade is a new trade. I learned that FAS is stock that can make a 9-point move, which it did a couple months earlier. Because it can make such a great move means that it can move against you as well.  Luke told me that when trading pharmaceutical companies it is very important that after you enter into a trade to immediately set your stops because it can swing very fast.  I good thing to take note on.
This was my best day yet for me as a trader….my first $100 day.  And it is important to not let the trades’ effect – whether positive or negative.  I could have/thought about throwing in the towel for the day after I was down, but I kept with it (Thanks to some encouragement from the guys around me) and a good opportunity was there and I got on board.  And because of that  I had the best individual trade yet.
Remembering that every trade is a new trade and that know matter how good/bad your last trade was, looking at the next trade with a clear mind and a new perspective is very crucial.  Another day of trading and another great lesson learned.

I have been reading a book called, The Reminiscence of a Stock Broker by Edwin Lefevre, which I highly recommend! Anyways, Edwin is a man who spent his hole life trading the market and who lost and made fortunes in the market many times. He started chapter III with a quote, “It takes a man a long time to learn all the lessons of all his mistakes’.”  Taking a look back at this month I had so many mistakes; whether it was a keystroke error or getting in a trade for the wrong reasons, BUT I am learning from my mistakes and that makes me excited for my trading career.

As I start month two, I am excited and ready to keep learning and now that I am going to make more mistakes. But I am hopeful and feel good at where I am at because I am learning. I want to end this blog with another quote from Edwin. “And when you know what not to do in order to lose money, you begin to learn what to do in order to win. Did you get that? You begin to learn!”

My next trade was DLR, Digital Reality Trust. This was a very illiquid stock, which means it is very risky because there is not a lot of volume. It could shoot up $.20 and just as easily go down $.20. I bought for a breakout at $40.00 and set a sell stop order at $39.90. Good thing I did that because it went straight down to $39.50. This is the frustrating thing about this trade because looking at the chart, after it went down .50 cents, it went up to $40.85. This a great example of a trade that could have worked out for me but didn’t and a great example of how important stops are. If I didn’t put stops in I would have lost a lot of money. My tendency was to chase it, but I didn’t because I have learned not to chase stocks. It is important to remember that there are many opportunities out there and this is one that did not work out. But hopefully next time it will be a different outcome.

I can’t wait to have a day without a key stroke error! Today I was trading LNC, Lincoln National. and wanted to short it under the $20 level. Put out a sell order at $19.95 and Buy stop order at $20 (buying it because I originally borrowed it). Not thinking accidentally put my buy stop order in at $19.90 and was filled long, which was NOT where I wanted to be. Ended up losing $7. But got back in the trade where I wanted to be with the correct outs and ended up working out for me. I was short at $19.50 at 11:32am (10:32 Texas time). And covered it at 11:43 at $19.80. Again, wanted to take some profit, but as you can see looking at the chart I could have held on to it a little longer.

I can’t tell you guys how much I am learning. I feel like I am learning something new in every trade. Whether it’s being more patient or learning about how the market works.

Through these two weeks I have learned so many valuable lessons that will hopefully make me a better trader down the road and maybe help you (the reader) make better investment decisions. One of the more important lessons I have learned, and one of the hardest, is do NOT watch your P&L (Profits & Losses).  It is more important that you develop good habits and loose in a trade rather than get in a bad trade and make money. Second, have your reasons for getting into a trade. For example, maybe it’s at a key level and the market is going up, or maybe Luke says it’s a good trade, haha. It is really easy to get in a trade for the wrong reasons; maybe to get money back, you feel like you need to be in a trade, and the list goes on and on. Last, now your “ins” and “outs.”  Before you enter a trade, be picky on the price you want and stick with it. If you miss that price or it doesn’t hit your price, don’t be an idiot and chase it, odds are it will hurt you (personal experience). But, if your price does get executed, know when you are going to get out (which you should already know).  If you are willing to loose $.10 then once it is at that level get out.  This is called a pressure free trade. You know how much you are willing to lose and therefore you don’t need to worry about it.

And for those who are wanting to get into trading or maybe just want to invest some money here and there, the best thing I can tell you is that do your own research but have people that you can talk to and ask their opinion.  I am really lucky that I have great people around me teaching me and showing me what to do and what not to do. And maybe someday I can help you out…

My hope is that not only will this blog be beneficially to me because I can look back but also helpful to the reader. I am going to fill you in my trading days and tell you about the things I learn and the stupid things I do, so that hopefully you and myself will learn. And maybe someday, the positive things I do will out gain the stupid things…