End of Day Journal (10-15-2010)

Summary:

Paper traded 200 share lots today:

I had several errands this morning so I was unable to trade until the lunch session.

As I prepped for the day I was concerned about my state of my mind and whether or not I could tap into the perspective that I had yesterday.

Concentrating is difficult. I should say concentrating on what I want to concentrate on is difficult. I can think about one thing without a problem, but the thing that I am thinking about is usually whatever is the most pressing/urgent. In other words, what I am thinking about has nothing to do with what I want to think about and everything about my current environment/situation.

I try to get a morning run or walk in before trading. I usually spend the time trying to think about trading: visualization, mantras, etc. I don't keep track of my thoughts or how much of the time is actually spent thinking about trading. Today I tried a slightly different exercise. I tried to focus on how I was moving, specifically how my feet were moving, and what I was sensing: hearing and feeling.

Simply said, the experience is amazing. It is almost like coming alive. How is that for abstract mumbo-jumbo? But it is a completely different experience. Probably just due to the fact that I am using all my mental capacity to sense and be aware.

But it is also incredibly difficult for me to maintain for any length of time - I think I can hold a single thought for a max of about 5 seconds. I usually become aware of how good/different it feels and start thinking about that rather than what I was trying to concentrate on.

The reason I bring all this up is that I am starting to believe that concentration is central to this momo trading gig.  I know - I have read what Scott has written about it numerous times. Why now?

How can I explain this? Yesterday's perspective was new for me - I am struggling to explain the distinction. Prior to yesterday I saw patterns and traded them, but in a sense, I believed that everyone else already knew what was going to happen - like whatever happened next was already a foregone conclusion and I was the only one out of the know. It followed from this mindset that the only thing preventing me from making a consistent profit was my inability to read/interpret the price action correctly - I was missing something. Yesterday the price action became alive and dynamic - I was aware that no one knew what was going to happen and everyone was waiting for the price action to unfold - because everyone wanted to make money, so everyone was waiting to see what would happen, so they could get in, because they wanted to make money...

Pfft. I really suck at trying to explain this.

Whatever else it was, it was such a cool experience that I decided I am not going to trade unless I have managed to adopt that perspective. Right now that is measured by how well I am concentrating on answering the question of whether a stock has run out of buyers or sellers. My objective now is not to be profitable, or even consistent, it is to be comfortable with that new perspective. Right now it seems fragile, like a little seed tentatively reaching out new roots, and I want to foster/nurture it until it comes automatically whenever I sit down to trade.

Full of descriptive language today - well, descriptive for an engineer. Heh.

So - that was the goal today. And I think I did pretty well. Even though I didn't get every trade right, I was open to learning. And I had these really weird... err... 'feelings'. On the NFLX, CSC, JPM and Q downturns, I couldn't shake the feeling that there were more buyers waiting. I thought to myself - should I exit? I had lost most of the profit and I think that I normally would of cut the losses and kept what I could. But I couldn't rid myself of the sense that buyers were waiting on the general market and these stocks. So I bought more CSC and JPM. I wasn't brave enough to buy more NFLX.

Don't get me wrong, I made plenty of mistakes today - I wasn't tuned into everything. I was completely wrong on JPM. On ACL I did a definite no-no, I averaged my entry price on the wrong side (I did have this weird feeling that there were more sellers waiting). I missed prime exits on SLAB, TSL, and KDN, and read the wrong momo on JPM and the reversal a few too many times on SLAB. But I wasn't emotionally bent out of shape over the losses - I was able to keep the mojo.

Who am I trying to convince - myself or my audience? Pfft.

It just is what it is. I think it is important to document the things that are important to me, when I find them important.

Time will tell. At least I know what trading should feel like - and I know what I am shooting for.

Trade well.

Details:

ACL

CSC

JPM

KDN

MON

NFLX

SLAB

TSL