Main Account: -$2724.
Back Account: +$3076.
Somewhat frustrating day; but I needed a wake up call on taking starter positions with undefined risk. Even a starter position can end up being nasty! That being said, I didn't get the starter postion methodology right; but point is that it doesn't allow much room for error. The kind-of ironic thing is I am trading really really well at the moment, just need somewhat of a strategy modification.
There's really no excuses for the loss on VRX. Funny thing is I nearly shorted it before it started plummeted but thought it was already too over-extended. What basically happened is that I had intended to start in around $120 and ended up starting about 130ish when the tick chart did a slight blip, and then added around 125ish(?). My first position was 50 shares, which given the range it was already having is quite large. Then when I added I was in 100 shares; so similar mistakes to WTW yesterday. Underestimated the range, and was too large. Overall though the fundamental strategy was kinda flawed with the starter position; what was I gunna do, hold until zero? Keeping size small (or as in this case I made a mistake and was about medium size) isn't quite enough to control risk well enough.
To me a permanent adjustment to my starter positions is required. Kind-of had a brainwave with regards to this.
It is unreasonable to take away my start positions completely. I get them right 19/20 times and when they work they put me in a great position (with some profit to risk on sizing in) to crush the final move. The simple adjustment is that instead of having undefined risk, define risk really wide. Usually when you take a position you put a stop-loss above resistance or below support. For starter positions put it at the next level and allow for a flush of that level. At this point you certainly know you're not quite on the right track and if eventually proving to be right there would be an opportunity to redo the trade.
WTW finally nailed the short and rode it the whole way down... But I didn't have the same size on it I did yesterday which is a real shame. Wanted to short in main account as well but couldn't get shares. Really really happy with how I traded WTW. Reason for being so happy is having the right read and the conviction to hold until the close or until proved wrong.
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