End of Day Journal (6-29-2010)

Summary:

A shout out to Scott's post from yesterday.

Timely - the emotional gamut accompanying the beginning trader's path can be/is crushing.

I think I am an average guy, successful in several areas; yet when it comes to trading I realize at times that I don't have a clue as to what I am doing. Very discouraging. Then there are times when I think that I have learned something and it all makes sense now; I have got this thing from here on out. This inevitably sets me up for another fall (at least thus far in my trading career). Those emotions are so real. It is strangely comforting to know that this is normal, and that I am not a complete idiot. The path is well trod, and others have found the way thru and can remember what it was like.

Scott writes about the ability to be indifferent to a trades outcome. I think this requires a couple of things (but better to read Scott's blog if you want an experienced opinion, this is my ownership process) :

1. A real edge
2. Enough experience to trust the edge
3. The realization that the market is overflowing with opportunities (abundance)
4. Enough disposable capital

Almost all of this hinges on experience - it is impossible to define, develop and own an edge without experience. It is impossible to understand the abundance of the markets without experience - without gaining enough experience to know what opportunities don't work for one's personality. Practice.

And the big theme of the post: personal investment - what does a trade actually mean? For me it is not so much about the ego - I am documenting all of the journey's mis-steps on a public forum. Personally it comes down to 'I gotta get this right so I can keep doing it.' I want to change career paths - as much as I enjoy engineering, I do not like the business aspect: clients, billable hours, budgets, employees, and employers. I want to trade. I want to work at home (where ever that happens to be) I want to work no more than 6.5 hours a day. I want to have the freedom to enjoy plenty of time with friends and family. Oh yeah - and I want to buy one more guitar. This raises the stakes for every trade considerably - is it just about the money? A big factor, but not sure how I would categorize all of this. I want to be right about trading so I can keep trading.

And I think I get it, then I am not so sure, then I am pretty sure, then I am ready to toss in the towel.

I seem to have exhausted some of the urgency over the past couple of weeks or maybe just this last weekend. That is, I feel more comfortable with letting the market do its thing and hanging out. Or perhaps I feel more comfortable with the idea that this will take time. 

I still feel like my future career is riding on getting this right, even the practice portion (feelings that came up on the early ETF exits - first trades of the day). An element of this may be healthy; perhaps running thru the emotional gamut enough times brings a sense of perspective and balance. 

Or maybe I will choke when I start trading live again.

Whatever else this new found sense of indifference is, I feel it is still very fragile... 

Ok - onto the day. I was positive at +$2272:

Here is the cumulative profit curve:

First 5 trades of the day were all positive. Primarily traded the ETF's on the market, with a few additional symbols thrown in.

The interesting thing is - the first trades could of easily been tripled, but I exited early. Strangely enough, I remember thinking as I was considering the exit - 'Hey - why not just let it go and see what happens?' But I didn't. If I can't experiment now - when can I? But I won't be too hard on myself, I did the best I could and I was reading an exit time. I can only get better.

Details:

CLF: wasn't meant to be, but this shows the value of a well placed stop; in this case previous open: I was not prepared to lose that much. (Or - after looking at Scott's entry - the value in a timely entry...) (-$28):

EDZ: yipper - early exit on the first entries. This was traded on the market along with TNA, VXX, and QLD. What to say? I did the best I could, and it was money in the bank. Easily could of tripled on all 4 entries (+$286):

GENZ: had some reads, but not the best captures (-$24):

NEM (+$90):

QLD: a series of stops on the 11:50, but managed to find direction and finished off well. QLD and TNA on the last sequence; NT needs basket orders... (+$591):

RIMM: direction and stops, nothing to be proud of (-$13):

TNA: again early exit on the first (+$1027):

VXX (+$343):