End of Day Journal (5-27-2010)

Summary:

Another down day, to the tune of -$488.78. I traded 300 share lots today. Here is the summary:

After the review it is evident what did me in today: entries, stops, and exits.

Heh.

No - seriously, I think this is pointing to an underlying problem. The problem is fear and a lack of confidence.

I had some mind boggling good entries today. Perfect setups and great price points. And I had a few hesitant candle change entries which would have been awesome entries if timed correctly. I hesitated because I had gotten stopped the last time and missed the opportunities.

I need to approach entries differently. I need to be prepared mentally to take the risk every time. Every time. I know this - but I think I need to define the risk differently. The definition needs to include letting a profit retrace and come back for a stop. If this keeps happening then it is not the market to be trading in or I am picking the wrong stocks. The risk is the amount of money I am willing to spend to test my gut reaction to what the stock is doing: is it going to move the other direction? Is it going to move my direction and come back with a vengeance? Is it going to move the expected direction?

The retrace is incredibly difficult to handle psychologically. I am betting that a big part of dealing with this is simply recognizing it and declaring it. This might be a beginning of the day frame of reference - and something to re-iterate before every entry.

Entry - all about price point. With good price point comes the tight stop and minimal risk.

So - stop loss placement. I did pretty well today, but a few got away from me - primarily because I didn't consider the placement prior to entry. They need short term momo support. Psychologically - they need to be the point where I acknowledge that I made the wrong decision about direction and prepare to move onto the next opportunity. If I can't get the price point on entry for a tight stop - I missed the opportunity and need to move onto or wait for the next one. Plenty of them every day (I need to remind myself of this constantly).

And exits. I need to acknowledge potential entry signals as exit signals: immediate patterns, previous performance and market sentiment.

The exit is a tough bit, but I think adopting and accepting the risk model on the entry - visualizing and being prepared for a profit and retrace - will help.

Today was a perfect day for trading: letting the winners run would of far outweighed the losses. Yeah - I had a couple of goofy entries, but controlled stops would have kept everything in control. I am going to keep making goofy entries. Key I think is defining and being completely prepared for the risk. The market conditions for the last couple of weeks have been rough and I haven't been finding the best stocks - and the results showed up in today's trading. I simply don't have the experience yet to keep me in an optimal mental trading mode.

I read back over what I have written and for the most part it sounds like it came right off of Scott's blog. I am not simply re-iterating what he says though, I am looking at what has been going on inside of me over the last few days and trying to identify what has been happening. Today's trades reveal mostly bravado on the entries and scared silly exits. Emotions and attitude rather than reading or failing to read some technical signals.

Heh - I think that is new for me. I am not sure when it happened, but right now I see the problem and the solution as me. I have read it many times on Scott's blog, but today I own it. Go figure. Breakthru?

Crazy how much a guy gets involved in this game. I just spent two freakin' hours on this blog and psychoanalysis session.

Ahh well - in some ways it is fun.

With all of that, the details are below. I decided to stop grading the entries - they are what they are. Key is price point - within acceptable stop loss support. I am debating about whether to go back to the 12 tick default stop loss which would force me to time entries a little better, but I am not sure yet.

And on another note - I tried to more closely monitor the Q's and SPY for entry and I think I did ok with it - it was hard to discern the sentiment on the Q's this morning after the initial break thru.

Details:

Short on BIDU, didn't let the two longs go (50 ticks and 70 ticks) (-$0.26):

Long on CNQ and stopped. Long again as it turned green and stopped again. Short after the doji and stopped (-$78.84):

Long on CVE then later short (-$37.51):

Long on DE (-$31.78):

I noticed DV trending and waited for the bounce. The first three entires are actually a mistake - I was at my symbol ticker limit for IB and TDA and not getting smooth data and trying to figure out what the problem was. I finally closed everything. The first 'real' trade was on the 7:45 with a short entry at the candle change. I closed on the green. Later - the entry of the day, and I closed like a noobie - 11 ticks out of 170. I tried to short again later and got stopped both times. About 10 seconds before I was stopped on the last my gut was saying reverse. But I didn't and got stopped. It would have been good for another 70 ticks or so (-$113.50):

Shorted PNC (-14.74):

Late with the short on QLD, discretionary exit (-$12.43):

Long on SI with an exit on the candle change (+$84.58):

I noticed SLB rather late. I tried to get in with a long on the candle change which didn't work. I tried long a little bit later with another stop. I then went long on the next candle change and exited on the next candle change. I entered short 30 seconds later (too late) and tagged a little bit of profit. I came in late with another long at the 11:10 and got stopped before it went back positive. Shorted on the next change and rode it down and back up.

I want to say a few things on these trades. A lack of confidence killed me with late entries. Signs that I would normally use for entry signals I ignored for my exits. Part of the problem was that I got burned on that first long. It was the right thing to do coming off of that long wick. I should of either waited for the next candle change or reversed. Instead I had in my mind that it was going to rebound on this candle, so I went long again resulting in another bruise to the ego. This showed all showed up in subsequent delayed entries (+$59.59):

Adventures in TNA. Biggest loser of the day. Let's see if I can make sense of things.

Short on the first entry and stopped. Then long and stopped - with the stop way out of line at 20 ticks. Bad mistake on that one.

Then long at 8:45 with a candle change exit - I was content to rest with 28 ticks and left another 90 ticks on the table. Fear. Lack of confidence. Get out of my head already.

Short on the 10:10. Late but the market was driving it down. Scalped as it bounced.

Long on the 10:55 change with a stop. For some reason I went long right away again, I think it was because of the way the candle was looking. Turned out I was right for one candle - but I moved my stop and got hit for 18 ticks. This was a bad candle trading session.

Short on the 11:15 and stopped a couple of ticks over the previous high (15 ticks).

I went short on the 11:20 change and stopped on the prior high - with a reverse. I get the direction right and I scalp. and try to short the next candle. Stopped....

Shorted the doji and rode it down and back up for a measly 2 ticks out of 30 possible.

Long on the 12:55 because everything was going up. Stopped. Went short. Stopped. Went long and came away with a tick (-$218.54):

I caught V on the new low. Given the 12:20 market downdraft I shorted. I doubled down as it broke the low. Then tripled as it broke another low. Then I held it thru all the long wicks - until it came back up on that crazy green and hit the adjusted stop. Rawr. 7 ticks loss over a 49 tick potential profit.

I waited and went long on the next candle change and got stopped.

Long on the 12:55 candle change and exited on the next candle change - leaving another 34 ticks on the table. (-$10.75):

Long on VXX with the Q's coming off a doji. Then short as the market was heading higher (poorly placed stop).  Short on the 11:40 as it looked like things were turning around (-$114.59):