Who are you and What Have you Done with our Trader?

I think someone stole my ID and entered a stupid trade in my trading account today. Either that or I temporarily took leave of my senses.

We were watching several stocks this morning to buy them as day trades. One of the stocks was WYNN, which had dropped on the opening. We thought it might bounce back, so we kept our eyes on it.

We got distracted doing some personal things around the house, and then noticed that WYNN had begun trading up off of its lows. Quickly I threw a buy order into the market and got an execution. You can probably guess what happened next. Sure enough, the stock begins coming down, giving me a quick loss. Since the drop looked like a correction in an intra-day uptrend I held the position.

I looked reasonably good (lucky actually) when the trade became slightly profitable about an hour later. I drew a trend line at this point and vowed to close the position on any violation of the trend line.

Around mid-day, the stock was trading sideways and broke the trend line simply by trading sideways through it. If I had closed the position immediately, I would have taken a small loss. I decided to hold the position to see if the stock could get a second wind in the afternoon. About an hour later, the stock started coming down on light volume.

So I held it, for the rest of the day and got lucky enough to have only a small loss just before the close. I finally obeyed one of my trading rules and closed the position at 3:59 (the rule is, all day trades are closed out by the end of the day).

So I broke a couple of my trading rules today:

1) If you miss a trade do not chase it. Wait until the stock pulls back to a proper entry point. If it doesn't pull back, then forget it and go on to something else.

2) When the stock breaks a trend line, sell it!

The only rule I obeyed is my rule about closing out day trades by the end of the day. It would be ironic if WYNN gaps up on the opening tomorrow. That would mean that the only trading rule I followed today would deprive me of a profit tomorrow!