Journal 003: Riding a Momentum -- IRC

Momentum trade: Intraday
Stock: IRC
Entry: 1.88
Exit: 1.92
Result: Win

While searching and shortlisting for stocks that qualify to the eight criteria mentioned in the book "Think & Trade Like a Champion" while the market was open I noticed IRC popping up on my watcher board at Investagrams. So it caught my attention. That was on 16 April 2019.

I'm somewhat bored actually, from reviewing charts and companies that would fit the criteria. I'm very eager to enter the market at that time to really get my hands dirty, learn from actual trading.

The price of IRC was moving up at a fast pace. So I got curious and greed sits in. I wanted to ride the momentum of IRC. A quick plan developed in my head. I said to myself, I'll enter and exit right away. But I know this trade is fundamentally triggered by greed. I had no set-up whatsoever to at least spot a stock prior to its fast move.

Well, as greed sits in, I entered IRC with only a stop loss in my mind at 5%. At 1.88 I entered the trade hoping the price will continue to move up. I observed the price action and volume after I entered. Based on volume, I felt that this price will never go up any further as I entered somewhere at the peak already. So I watched carefully at a 3-minute chart time frame. Fear started to sit in. I didn't wait till my cut loss hit. I sold it at 1.92 at a very small profit (less than 1%). I managed to get out unscathed but that was too risky.

My takeaways on this trade:

• I will never do it again -- impulsive trading.
• If I will do intraday or riding some stocks momentum, I should condition my mind that this is what I'm going to do this particular trading day.
• I was able to establish my cut loss price, which is good before I decided to trade. This is the discipline I wanted to develop in me even by doing this impulsive move. 
• The risk is really high compared to reward in this type of move that I did. 
• It seemed Intraday not suits me. I'm very emotional, the entry was triggered by greed. The exit was triggered by fear although I considered the volume of sellers as my deciding factor during my exit.
• I still need to find the right setup type of trading that suits me. A trading time frame that will not hamper my day job and the time difference between the Philippines and Kuwait should not be a problem. EOD comes to mind. But I still need to learn and read about EOD trading style.
• Next trade: Hint -- it was careless intraday trading again. This time I learned my lesson the hard way.