Photo by Hythe Eye

Photo by Hythe Eye

This is really a bad month for trading. The market was trendless and consolidating most of the time. The evidence can be seen in the holding period of the counters in the table. You can see I held many of them for almost an entire month, yet they ended in losses.

The mistake I made was overtrading. I opened too many counters without any sign of a strong trend. Hence, losses were accumulated unnecessarily. This is the problem when the rejection of trades is not strictly practised.

With the 8% stop loss, there was enough room for the stock price to fluctuate. But the eventual weakness of the stocks caused the prices to fall and stop losses triggered. As the sign of weakness became obvious, I started to observe very strict exit rules – set stop loss just below support even though they may be very close to the current price. I have also stop opening new trades towards the end of the month. Read more…