First loss for RUS_Trades

Today I lost the first time and there are a lot of things, that should be learned out of it.

I do consider myself "right" on the trade, in terms of technical analysis.

But overall, I was "wrong".

I traded MINE today, which is a penny-stock and super volatile.

I saw some support around $0.031 and as it was going down, I wanted to play the bounce.

Sort of like I played GPRE yesterday, which was pretty successful.

First mistake I've done, was the timing. I did not learn the lesson from GPRE, when I said that the bounce needs to be anticipated and the position could be taken right at the support.

Maybe if it was NASDAQ, I would finally put a limit order just above the support. But this is OTC and I was too scared.

Second mistake I could call the "lack of the right software". I have to switch back and forth between my free trading platform and E*Trade web-site for orders, which is a pain. Stock could be running in seconds, and I'm still entering the order. So instead of getting a fill around $0.031, I got filled at $0.037. Seems like nothing? Well, it's a $60 difference on my position.

Third mistake was the size. The size was way too big, especially for a penny-stock. I could also call it being emotional. I could also call it being under-capitalized. The size was way too big. With smaller size I could have a bigger STOP LOSS, which would allow me to get the profit. This mistake is THE BIGGEST.

Fourth mistake was that I went in and traded OTC for the first time, while I was not too comfortable with it and I have never done it. I could also call third mistake that I did not follow my set of rules. My goal #1 is to stay at the game and goal #2 be consistent. Goal #3 is to make big profits and I just tried to do that my second trading day. Did not happen.

If I was about to summarize everything, I could say that:

• Did not follow the rules in terms of: position size, market/stock.
• Under-capitalized.
• In need of soft-ware.

The main thing is that the size was way too big and the stop-loss was too tight. That led to a loss. OUCH!

The other things do not really relate to the mechanical process of trading. So let's get down to that.

So, I saw the support and stochastics crossover. Seemed bullish as hell, same concept as GPRE.

I wanted to play the bounce, get a decent 5% and exit quick. Sounds simple.

If I set my stop-loss at the support level, I would have TWO opportunities to exit. There were two spikes, and even if I was greedy or super-confident, I could make even a bigger profit at the second spike.

But I set-up my stop-loss stupidly. Look, this is a PERFECT RISK/REWARD scenario here. Oh well.

My second mistake was the fact, that I did not trust STOCHASTICS. That was part of the reason, why I exited. The cross, when I bought, seemed to fail. You can see my exit, right when stochastics fast is about to cross back. BUT IT DID NOT CROSS. It just bounced again and the stock soared.

I love stochastics and this proves to me, that with a REASONABLE stop-loss and rule-following I could have make this my BIGGEST winner.

I'm not going to talk about perfect entry. However, if I exited on the first peak, I would have made 3%, second peak would have been 6%. Instead, I took a stupid 5.93% loss.

I was all happy about "how smart I was with that stop loss", when the stock was going down at that time. 

Smart stop-losses are more important, than the entry. All I could say.

The golden rule of trading is "let your profits run and cut your losses short".

NOTHING about the entry.