End of Day Journal (10-14-2010)

Summary:

Paper traded 200 shares lots today:

I traded very well today. I felt tuned into what was happening.

As I mentioned in today's earlier post, I focused on two objectives this morning: Sell when a stock runs out of buyers, and buy when a stock runs out of sellers.

Not entirely sure what to make of all this.

But some interesting and new things happened today.

For one, I was aware of some reason to add onto positions, I added because it looked to me that my initial assessment was correct and there was more on the way... Does that make any sense? FSLR worked out, GRMN didn't. Every time I have added in the past it hs felt like a shot in the dark.

Second, I reached a point where I knew it wasn't good to be trading. This started happening on the FSLR position after it reached the +$0.50 profit mark. I started asking myself whether or not I should get out rather than if the stock was running out of buyers. I noticed that my attention was shifting from the stock to my PnL and how it would make me feel to cash in, or what I would feel like to have it come back and stop. There was a distinct difference in my thought patterns and I was aware of the difference. I had to work to re-focus. The trade came back, but it didn't look like the buyers were done... based on the price action in FSLR and what was happening with the Q's (they were dropping nicely)... or something like that. By the time it got to the +$1.00 I had managed to re-gain some focus and objectivity. When +$1.50 came along I was back to being a mess and knew that objectivity was a lost cause. Before I exited the trade, I knew that I had to take a break after I closed this position in order to re-focus.

I am not sure how long it would of taken until I felt comfortable and objective again, but I decided to stop on a good note and think about it the rest of the day. Stopping today was about me and how I changed rather than the PnL. Usually I keep trading because I don't know what else to do. My perseverance is about 'shut up, stop thinking, and trade - things will work out'.

Third, I felt a distinct shift in buyers and sellers today. This happened on the GRMN position. I was long, and added; I had the impression that buyers were waiting on the sidelines. In fact, I still believe it - go figure. It was like the 11:30 mark was a tipping point - people were watching and waiting to snatch the stock up. I think that if I would of put in an order at the right time the ball would of started rolling and it would of shot up. But the moment came and went and the tide shifted to the sellers. I am not explaining this very well. I am trying to say that it felt like a deciding point - things could of gone either way and the momo shifted. The moment was less about the pattern and what was supposed to happen and more about what was happening... and I felt a shift - and exited before my stop. This was after the FSLR trade and my decision to take a break, so I didn't even consider a reverse.

Pfft. How abstract and bizarre is this stuff??

This feels important, but it might be a fluke or today's market conditions; this might be another groundbreaking 'real-deal' milestone only to come back to another fizzle. Meh. But.. the experience is something new and different. And it is something to objectively strive for; I know what I should be feeling/thinking while trading now.

It is crazy - this was not a new idea or something unfamiliar - or complicated. But as mentioned on the earlier post, I have been working so hard on the charts and everything else that I completely forgot what all the metrics are supposed to represent in the first place. The 'other side of the trade' question has been nagging me - and I just found it confusing: whose side should I be on? Should I expect patterns to fail or hold? Am I trying to do what everyone is supposed to be doing or the opposite?  Asking the buyers/sellers question was objective and incredibly simplifying. And, perhaps more importantly, I could tell when my focus was directed towards something else.

Well. I think I beat that to death. I am going to spend the rest of the day catching up on some neglected items (namely my dissertation). Let's see what happens tomorrow.

Trade well.

Details:

FSLR

GRMN

JOE