End of Quarter Wrap up

As this quarter wraps up, I thought it would be good to re-cap the events and any lessons learned. First some stats.

Not a very pretty quarter account value wise: 1 month up in value, 2 months down.  6 weeks positive, 4 weeks negative and one half week at no gain or loss (this last week).  Largest single day gain of $1495.07. Largest loss: $2431.29, with an average of -$85.33/day. Overall the account is down 20%; at one point the account was 20% up.

Lessons?

Hope has no place in successful day trading. Probability wise, at least for the stocks that met the screener criteria I was using, there was a 75% chance that the stocks would see a 1% increase after the day of purchase. But when they didn't, I think pass successes - especially the great first two weeks in January - lead to some hopeful optimism about what would happen. After several bad days in January and a couple in February, the account had lost all of the profit and then some.

Greed has no place in successful day trading. I did fairly well for the next month and a half, but holding out for higher returns, based only on some misplaced sense of hope, led to one heavy loss.

Commit to a position only after I have quantified the acceptable amount of potential loss. I entered into ABIO early - and in too large of a quantity, without properly setting a stop. After I realized it was early - or perhaps wrong, there was a significant decrease in the value of the account.

Set definite criteria - how to know when/if I am right and know when I am wrong. There was a definite improvement in overall account performance when I knew when to get out of a bad position. For the implemented strategy, this was the 'one day of ownership' rule.

Where to from here?

Over the last few weeks, I delayed entering a position until I found what I thought would be a good return on the first day of ownership. This met with some decent first day sells and returns (and a couple of potential returns). The IRA account saw a 10% increase over the last month. I have decided that I feel more comfortable with the shorter time frames. Primarily in terms of decision time and judgment criteria.

I have spent the first part of this week organizing the logistics for some practical momentum trading implementation. I think I have everything set up after today, but we will see tomorrow. I will be paper trading until I am convinced that I have everything worked out.

Rawr.