End of Day Journal (4-13-2010)

I paper traded as fast as I could today.

I debated about whether or not try and be more judicious, and I decided not to. I ended the day about $800 to the negative. OSK kicked my butt. I look back at the chart and I wonder what the hell was I thinking. The flow and profit taking are right there for the whole world to see:

 I don't think I am going to trade on the live account until I get at least a good 3 days of not clicking sell when I mean buy. I might setup up distinct sell/buy hot key - click combos.

But I learned a few things today.

I think I am going to try and make it a point to chronicle my own personal definition of momentum, what it looks like, and what it feels like.

There are periods of excellent market momentum. When these occur, it is just a matter of jumping in and tagging along. Everything moves.

There is also intra-instrument momentums. Trends, reversals, and continuations. And a lot of it happens on the 5 minute candle (early morning insight via FnG).

Here is another FnG post that clicked home today after the close. OSK is an excellent example. Definite uptrend for the first hour, setting the tone for the day. The pull back at 10:20 with the near doji with strong volume at 11:00. The next candle starts green and ends green. This is a ~$0.50 move.

For the sake of posterity: I was watching OSK the whole time, but I waited to enter until the new high, missing most of the move (and to top it off, I clicked the wrong button, hence all of the other tightly packed entries and exits... I really need to setup that hotkey/click combo... silly me).

To recap - I should have been looking at the daily trend, watching and waiting for the continuation or the counter trend, and bought on the signal. Easy peasy - and back to FnG's notes: the stock is making up its mind at this time of the day - what is it going to do the rest of the day? It kind of holds this trend, and then towards the end of the day makes another decision. That is beautiful.

Another good example with SLG:

(Of course I flubbed it up very badly - something like 10 incorrect entry clicks until the end of the day... pfft.)

You can see I tried to enter the new high at 11:15, which is all well and good, but plenty of big green candles with stronger cumulative volumes before my entry.

It seems intra-instrument momo is more about expecting that a stock is going to move, and watching for the direction that it wants to go, usually after it takes a breath.

Then we have REG:

New highs. Breath. New highs, breath (and low volume breaths). Not selling on the high volume - near doji was a mistake, as evidenced by the 'Hi I'm red - nice to meet you' candle at 14:10.


Well anyhoo - it is just good for me to work these things out. Old news to experienced traders, but it feels like an epiphany of sorts for me. A lot of the stocks I traded today have the same type of clock patterns. I don't have yesterday's list of watches, so I haven't checked them, but I bet they did the same thing.

So tomorrow I will try to put this to practice. And trade out the gonzo again.