At the end of each week I tally up my winners and losers. I’m looking for two things during this exercise... my win rate and my P&L.
The week before last I had 11 winners against 13 losers, yet I was still profitable by $114. This past week I had a much better win rate, 12-7, but I made less money - only $37.
So here’s what that tells me... two weeks ago I did a MUCH better job of cutting my losers short and letting my winners run. Because even though I had more losing trades than winning ones I was still able to turn a decent profit. Now to this week... I managed my winners pretty well, however I let some losers get away from me.
And that made all the difference.
Here’s a look at my trades... I had 7 losers, but 4 of them were BAD losses. That means I let them expire worthless taking a MAX loss, OR at one point they were profitable trades and because I didn’t put a stop in they turned against me and I actually LOST money. These types of losses are UNACCEPTABLE!
RAD (W) - 20
SPLK (W) - 7
FCX (L) - (83) - had a chance to sell at 90% profit, didn’t do it
V (L) - (86) - profitable trade turned loser
PAA (W) - 115
RAD (W) - 11
OKE (W) - 52
BBBY (W) - 7
MRVL (L) - (35)
GM (L) - (18)
GT (W) - 39
INFN (W) - 65
WMT (L) - (117) - 100% MAX loss, unacceptable
TSO (L) - (50)
BABA (W) - 61
PPC (W) - 105
MGM (W) - 8
JCP (W) - 21
URBN (L) - (85) - profitable by 30% and didn’t take any OR put in a stop
FCX, V and URBN were all profitable at one point. Had I put a stop in I would have saved myself $254! The WMT play was never profitable, but I stayed in it with no stop “hoping” it would turn around. This too is also unacceptable. We’re talking about another $60 saved here had I placed a stop loss in the WMT trade. So basically I lost $310 I didn’t have to lose people!
STOPS! They truly SAVE a trader! You would think this is common sense, but it’s the hardest thing to do!
Anyway, the positive thing that comes from this exercise is seeing I’m literally a few decisions away from real profitability!