Learning to Day Trade - Part 10

Patience

So today $AMD panicked near the open and I decided to try and dip buy it in Interactive Brokers (first trade there). I ended up being totally correct for at least 15c/share bounce. That’s not amazing or anything but I wanted to practice dip buying.

$AMD 1 minute candles

I marked my entry, exit, and my risk level. I didn’t wait for my risk level to be hit because I got scared and didn’t want to lose more. By not being patient this actually cost me. My arbitrary sell goal was $13.00 and it would have gotten hit if I waited another few minutes. This is certainly frustrating because my timing was pretty solid. ~$12.90 was actually support from the previous day so this was a dip buy at support even though it dipped slightly below.

  • Entry - $12.95
  • Exit - $12.91
  • Risk - $12.88 (low of day)
  • Potential reward - $13.15 (20c, if I had been patient)
  • -$4 loss (-$2 for commissions, -$6 total)

The best thing you can do is learn from your mistakes. Even though I lost today I learned that I should be more patient on dip buys. Of course you should not be overly patient, but waiting a couple more minutes can sometimes help significantly.

I’m still up from my other $AMD dip buys in another brokerage so this loss was worth taking for the experience. It kind of feels like I got screwed by using IB here because when I trade in E-Trade I end up not watching the position as much and not caring if I’m down a little. So that’s good and bad I guess. Maybe I really should do what Tim Grittani does and not watch the profit/loss and trade off the chart only. If my risk level was hit, then get out and not care about profit/loss.

Since this is $AMD, I never have a problem bag holding it when I’m wrong. I didn’t do that here because IB is supposed to be my short term broker where I day trade in whereas E-Trade is more longer term/swing trades. Any other stock I would never hold when wrong.

The better dip buy today was on $NBRV at ~$9.20 and it ran up to $10.45. It was sort of choppy and I was watching it at the time but did not trade it. There’s no way I would have had the patience to hold for 30+ minutes. If I got in there I’m sure I would have sold at $9.45 on the first candle that spiked.

Practice, practice, practice.


Part 11 - Bull Flags



Disclaimer

I am not a registered financial adviser/broker/anything. Use this information for entertainment/informational purposes only. Any tickers mentioned are not recommendations to buy/sell/or sell short. They are used as examples only.