End of Day Journal (6-1-2010)

Summary:

I managed to stick to the rules today - well, kind of. I am not sure how well my exits measured up to the plan, but I did the best I could. Positive at +$15, paper trading on 100 share lots.

I was exhausted today, seems the 3-day weekend wore me out. I was not into trading this morning and took quite a bit of time off.

I had a couple of great entries, and a multitude dumb entries. I would get analytical here, but I will save it for the TNA chart. Fact is I was tired this morning and should not have been trading.

Details:

Rather than look at all of today's trades, I selected a few - the best and the worst. I caught some good action on OII and WLT:

I can live with these kinds of trades.

But then I get back into TNA:

I would attribute a lot of this to being tired today, but the fact of the matter is, I do this kind of thing a lot.

Scott traded TNA today as well and he did very well at it.

What am I thinking?

Let's take a look:

For the sake of evaluation I thought I would try and keep track of the correct/incorrect reads: correct meaning that the direction expected lasted at least one candle. Then compare where I differed from Scott.

The first trade came on the candle change. I went long, expecting a return to the upswing. It looked to me that the market was showing some signs of heading back up: the Q's were showing some indecision and SPY was actually green. I was prepared to lose 18 ticks on the trial, and I did (0/1 correct reads)

Same thing on the next candle, but not timed on the candle change. 6 ticks on that one - which was acceptable (0/2 correct reads).

8:15 saw me trying again (on the change) but when it didn't work to the tune of 9 ticks (0/3 correct reads), I went short (1/4 correct reads). Doubled up on the 8:20 (1/5 correct reads). And then paid for it with the discretionary on the 8:25, which turned into a long (1/6 correct reads). And I got stopped.

Ended up long on the 8:30 (2/7 correct reads) with a discretionary for a small gain.

Long on the 9:00 candle change (3/7 correct reads)  with a discretionary and a short as it retraced and the market went red (3/8 correct reads). This got stopped and I reversed (4/9 correct reads) with another early discretionary.

I went short on the 9:25 candle with the market showing indecision (4/10 correct reads) and got stopped.

Short on the 9:40 with a stop (5/11 correct reads).

Short on the 10:20 (6/12 correct reads) thinking that  all the green was too much of a good thing. Stopped.

Long on the 11:45 because of the alternating green/red everywhere (6/13 correct reads).

Short on the top of the 11:55 (7/14 correct reads). Which ended with a discretionary and a reverse which got stopped (7/15 correct reads).

So I was right about 47% of the time. Without commissions, the largest loss was at $18 and the largest win at $49. Total profit was negative at  -$17.

Scott traded TNA today as well. Assuming he posted all of his TNA activity, he had 4 entries, and was right 100% of the time.

2 of my entries corresponded with his, the 8:25 long and the 11:55 short. I made money on the 11:55 but left a lot on the table. I didn't make money on the 8:25, but caught some of the move on the 8:30. It looks like he must have entered after I did on the 8:25: I got stopped on the wick, and it appears that he covered and went long after the wick. (Perhaps the 'failed' down trend and retrace, along with the market turning green was his prompt?)

What can I glean from this?

Looking at some of my correct entries, I would of encompassed 4 of my entries by letting my correct entries run, bringing the number of entries down to 11.

I tried to time reversals on the candle changes 4 times without success. Looking at TNA's chart, this only occurred once today on the 7:00 to 7:05 change. These types of reversals may require stronger candles. Adopting a stronger candle criteria would have brought the number of entries down to 7.

This leaves entries that were stopped and in the right direction, entries on other signals and stopped, and correct non-stopped entries. I had 1 of the first and 2 of the last, leaving me with 4 entries on other signals and stopped: 8:15 (long), 8:55 (long) (twice), 9:45, and the 11:45. The 11:45 is the only rather stupid one (alternating green/red), all the others are indecision based.

Assuming TNA is representative of a lot of my entries, adopting these guidelines may improve entry numbers tomorrow: discretionary exit only when it appears the stock is turning around (exhaustion volume, change in volume, candle play), don't expect reversals on the candle change unless there is strong candle action, and no stupid entires - or more specifically, entries without price action signals.