Losing Trade #001 ECP

Hi traders! This is my first time making a blog post. And guess what? It's about my losing trade. Lol. Whatever. I know a lot of traders (especially those who hit jackpots) would only post something like 200% - 300% gain in 1 week or so. Medyo nakakainggit syempre. Pero bihira tayo makakita ng mga trader na nagpapakita ng mga losses. So I thought, that showing you losing trades would somehow open our minds that great traders don't win because they win big. They win because they lose small. Honestly, I'm not a great trader myself. Baka nga puro losing trade lang mabasa nyo. Haha. Anyway, this will serve me a lesson na rin for my future trades. If you know how to cut your losses without getting to emotional, you're already halfway of surviving this chaotic field. 

So, let's start?

THOUGHT PROCESS:

I'm a big fan of Bounce plays. Especially with stocks that recently rallied way beyond everyone's expectations. Below is ECP - A Classic Example

ECP Long term Chart

Looking at the chart, I thought: " Uy pwede for bounce." That's why I checked the chart. Then I applied one of the most commonly used tool for bounce plays - The Fibonacci Retracement tool.

ECP chart with Fibonacci Retracement

And Voila! Sakto! Oh diba, malamang tumatakbo na sa isip natin na kapag ganito, 

"Yes, ako unang nakakita nito!"

"Sa wakas, malaki laking bounce to!"

"Sakto sa guhit ko! Galing ko!"

Since i've plotted where I think the bounce support was, it's time to look at  the daily chart kung san pwede pumasok.

ECP Daily Chart with Support line

At this moment, I was so sure where to buy. So I made my RULES of Engagement:

Buying Rules:

1)Buy only above support (Red Line).

2)Buy only above support AND within 5% range only.

3)Buy only during EOD. Or atleast around 2:30pm onwards.

4)Buy on tranches: around Php 10,000 (approximate) per trade (para di masakit)

Selling Rules:

1)Sell only if the support breaks during EOD.

2)Sell intraday if you see signs of weakness.

2.1)Sell on tranches also.

3)CUT everything if support breaks at EOD

4)If the support breaks during EOD, your setup is already invalid. Never enter the stock using the same setup again.

5)Optional: You can cry. But you have to move on.

I bought everything during EOD for 2-3 days on tranches using my rules. But then, the bias goes against me. So I lost. 

ECP Daily Chart as of Feb 23, 2018

Sold all my positions around 2:00pm at Php42/share. I accepted the loss. And the stock went to a low of -13%! Though it closed at Php40/share (-11%). I've made the right decision because I've followed my rules.

Transaction

I don't know. I maybe whipsawed next Monday but who cares? I can sleep peacefully  for now. And I may re-enter the trade with different setup. And who knows may be I get a different outcome right? :)

MORAL LESSON:

May be there's something wrong with my setup. But that doesn't mean I'll be wrong again next time. Losing is part of the game. I'm not looking for a one-time-big-time trade. I'm looking for consistency. And with this  loss, I'll bounce back high! As I've said, bounce play is one of my favorites. :)

Follow your rules. Stick with it. If you don't believe in your system, no one will.

Now on to the next trade!

-tpt