End of Day Journal (5-7-2010)

The day turned out positive at +$685.65.  But - after my first four trades this morning I was at ~+$2000. Heh. Let's figure out what went wrong.

Seems like NT has a bug - account performance is way off again today. It is showing trades from today and yesterday and positions held over night. The date filter is set for today to no avail.

Here is the latest Excel:

I had to move the legend and notes due to yesterday's performance. =) The chart is getting a little hard to read.

Again - most positions are 500 shares except where noted. Traded new lows and highs from the MA list (mostly). More positions than yesterday but I don't feel like counting on IB.

AIG: new high, closed too early, should have waited for five minute bar. I tried to re-enter and got stopped out. Later I tried to play it off of the high with a short. I closed and went short again (all in the same five minute bar), then stopped out two bars over. Shorted on the next bar and another stop. It looks like I came out -$151:

New low on ANF, timed it pretty well. Unfortunately I didn't reverse (+$345):

New low on ANR, with a pretty good exit. Again, I did not reverse (+$256):

I had been watching BBY on the new high, but I was late. As it came down I went long after the second long red. I was wrong, so reversed and exited late on the next candle (+$45):

BHI on a new low and long red. I was $0.18 positive at best, stopped out (-$28.60):

BID offers a lesson in what not to do - a bad mistake. I shorted the new low and was +$0.65 at best. Then the candle turned green. I didn't believe it, and decided to double up. I had it in my head that this was a rest of the day trend stock. Rode the green candles all the way back up until I was negative. I tried to short on the five minute mark on the third green candle. I was wrong and stopped on the next candle (1000 shares - two entries). By then I was a little perturbed. I thought to myself: 'I am going to show BID'. I really did think that. After I realized that I was getting too emotional about this I exited and took a 15 minute breather. It dropped the rest of the day. (LOL!) I tried again later on the new low, stopped out, reversed, stopped out. Short again, stop again x2 (-$1021.17):

Shorted a new low on CAM and got spooked when it touched twice without breaking. Shorted again as it broke the low and missed the excellent cover (+$35.02):

Shorted the new low on CLR and it completely retraced and then some, and I stopped out. Should the large green volume spike at 7:40 have been a warning? The stop was poorly placed (-$219.52):

I was watching EXXI coming up for the new high, When the red started developing I shorted. It retraced almost completely, but the stop was set at the top. Exited on the green. The five minute mark would have been better, but this was not moving very fast (+$270):

FAS was bouncing. I bought just after the new candle. It went negative at first but my stop was on the doji wick. Exited on the spike and close to the end of the marker (+$254.07):

Shorted a new low on HAR, exited on the stubbornly persistent green ($-15.80):

Shorted a new low on ITMN. Red, green, red, green (-$15.00):

Long on MEE's new high (late on the entry). Exited when it turned red. Shorted on the next candle but somehow was not convinced it was turning around. In retrospect I should have collected at some point on the upshot and as it was turning around, but it sank right at the end of the candle. More green volume than red volume maybe should have been a sign? Not sure (-$159.95):

Shorted  the breaking low on NAV. Exited as it turned around (+$20):

SNDK on the new low. Timed the exit pretty well (nearly $2). A late entry on the long with a little bit of profit. Tried to reverse on the end of the next five minute and called it wrong:

New low on VRX. Doubled up on the 5 minute mark, exited as it turned green. Shorted as it broke again and exited on the 5 minute mark (+$688):

WBC as it broke the low again after a slight bounce. I didn't believe the green and doubled up only to go negative and exit. Shorted at what looked like the top and stopped out at one tick over the candle open - I should have been using the previous candle open. This fiasco happened at the same time BID was going on - I was holding and watching both positions. I did the exact same thing on both stocks - I thought WBC was a rest of the day trend as well. Silly me. I shorted later on the new low, a little bit late, and got stopped out. I shorted again as it broke and stopped again... (-$408.11):

I realized two things today:

1. This method is playing off of other people's fear and greed. I think it is safe to say from my prior trading experience - that I understand and am well versed in those emotions - all too well... I hate trading from that perspective. This method is a release from that. Thinking about that on the entry - what is the guy on the other side experiencing right now - helps to time the entry and also gives clues to what the position is supposed to do. When it works it works very well. And when those emotions are in play, as realized by the stock movement, expect the bounce.

This was evident in the ANF, ANR, BBY, BID, SNDK, EXXI, MEE, SNDK, VRX, WBC trades. If I would have reversed right away, I would have nearly doubled on all of those trades. The thing about it is, if I reverse and I am wrong, I can reverse again. I think it is worth the risk given the probability, the trick is to keep some sanity and not go click crazy. Not sure if I can do that yet.

CLR rebounded, kinda. Not as strong, but no hesitation when I realized that I was wrong would have helped.  Can I jump in and out that quickly? Naw. I was wrong to begin with. Too much jumping. FAS did something like a rebound, but the first candle covered the entirety.

I usually wait too long for confirmation or move onto something else. Emotionally charged stocks move fast so I don't think I have to wait very long for confirmation on the reverse. I actually did a reverse on BBY when I was wrong, albeit somewhat slow: I closed and re-entered. NT can do the entire thing with one click - if I can muster the cajones. Be ready to think and act fast in those conditions.

2. Don't ever not believe what I am seeing - and don't double up on a bounce.

BID and WBC were decent entries. I went wrong when I looked at them and thought 'rest of day trend settling in'. For some reason, despite what I was seeing, this is what I believed. I think about it now and I have to chuckle - I mean the candles were green with volume. What else do I need? Those trades killed the day lol.

Setting the stops graphically on the five minute has kept me out of a lot of the bounce. Yes the potential losses are heavier, but I think these market conditions warrant the breathing room.

Ahh - but still...  ~+$700 is an unbelievable day - almost 200% of the target daily. This seems doable. Just for the record, and to give some idea of the day's range: after the $2k figure, I did two bad trades and was down to $1.7k. At one point the day's gain on the account was something under $300. Lol. By then I was feeling wounded and took the breather. I got it back up to just under $1100, but the last few trades refusing to break thru the lows cut in rather deep. Quicker on the entry - or -  not following, which is what I did on a few - would of helped quite a bit.

Still a lot to learn. But - THE FIRST PROFITABLE WEEK SINCE JANUARY! =) And the most profitable week ever.

Notice something I haven't? Feel free to let me know. Have a great weekend and best of luck next week.