End of Day Journal (7-16-2010)

Summary:

Finished positive at +$692. 200 share lots and all on paper:

A word or two about the trades. I watched the Q's and traded the ETF's today, bulls and bears: TNA, QLD, TZA, EDZ. Red arrows mark short entries or long exits, green arrows mark long entries or short exits, the red diamonds are stops (Q's):

I saw market weakness and had a short bias for the morning. The way the 7:35 was shaping up looked fantastic. I can't say that I would of called it any other way, but looking at the 15 gives me some pause. In fact, after the stop, I went long - and the wait on that exit was a bad read. The 15 minute is pretty clear on the exit, and I should have been looking for the chance to get out with all that indecision floating around. The 15 minute spinning top on the 8:00 called the short and I was a little late. I got stopped on a few of the ETF's but came right back in. Timing is so crucial, being late to the game lends itself to being stopped out too quickly.

The short on the 8:35  was looking good. I had some pause on the 9:05 rebound, but I stayed in and doubled up as it continued. Heh. It was one of those 'What would Scott do?' moments; we can debate the wisdom of that I suppose.

I exited on the 9:50, losing most of the profit, and right when things started to turn around. Unbelievable. Earlier I was thinking that the 9:05 should of been the signal to get out - a new low that finished green. But - perhaps the stronger signal was the new lows on lower volumes; specifically the 9:00, 10:05, and the 12:25. Could of pulled reverses on those, looking for a quick profit and waiting for the market to return to trend/bias. Much more in and out - but I think a more consistent policy overall (at least for today). I like it.

Ok - well this pretty  much sums it up till I get back from Costa Rica. I may have time for an early morning session on Monday, but not planning on it, depends how the weekend goes. It is nice to finish strong.

Details:

EDZ (+$148):

QLD (+$212):

TNA: you will notice that I got stopped out more on TZA and TNA. And on the 12:15 short, I actually set the stop way up on the prior candle high to avoid the stop - bad policy; I was negative 50 ticks at one point lol. Entry timing is critical. (+$209):

TZA ($123):

Extra charts:

I recorded buy/sell volume again today and I started trying to find some patterns after the market closed. Mixed bag. Funky strange beast, I think it would be wrong to read too much into this, but I still want to give it a little more time. It seems that the one side can be outnumbering the other side by a significant margin but the candle will still move in the opposite direction. The chart below with the Q's is a good example. I marked two doji's and a pretty solid red candle. Re. the doji's I would at least expect to be able to have some suggestion as to what was coming next via the buy sell. The first doji has more buy then sell - yet it was a classic short signal. The next doji shows quite a bit more selling than buying - and this worked out for the immediate future (i.e., the end of the doji would have been a good short for one silly low volume candle). The last marker shows a solid red candle with quite a bit more buy volume than sell volume. Again, this was a precursor, but only for the immediate future:

Q's:

Note: the first volume candle is invalid - the volume is about right, but I logged on sometime during the candle formation so it should be discarded. It would be kind of cool to see how the candles prior to that were playing out.

Again - I am beginning to wonder about the value of static historical charts (I corrected yesterday's entry). It seems to me that the real value comes from how the candle unfolds, or the speed with which the candle moves up/down. I don't know, just a hunch.

Fozzking posted this yesterday - we probably have the same readers, but thought I would pass on a good thing.

End of Day Journal (7-15-2010)

Summary:

Paper traded today and ended the day positive at +$368. 200 share lots and scaled up on the winners... and a few that didn't work out.

What a difference a day makes. I think I have been suffering the effects of cumulative sleep deprivation. My body is in some awful pattern of 4 to 5 hours a night, for something like the better part of the last 7 years. I hate it, but there doesn't seem to be much I can do about it (caffeine intake is down over 90% for the last 5 weeks with no results). I generally try to sneak a nap in during the afternoon, but I haven't scored very well on that front over the last several weeks. I came away with a 2.5 hour nap the other day and 7 hours of sleep last night. I woke up refreshed this morning for the first time in what has seemed like weeks. I felt right on the edge today - much better, but if I pushed it I could feel my body ready to fall back over into exhaustion.

Anyhoo - this made such a difference in the mental attitude. That and I wonder if I have reached the end: coming to grips with the idea that trading is a high performance art, requiring mental agility and a lot of screen time. I am willing to wait now, expecting it to take awhile, and content to paper trade until it just clicks. Stocks can only do a a few things: go up, go down, or go sideways; only so many ways for this to happen. I am planning on getting familiar with most of them before placing any more money on the line.

What's familiar? A consistent paper profit. A sense of comfort and confidence in what I am doing.

What's the plan? I am going to focus on the favorites, TI's high flyin' fast movin' screener, and the ETF's. Big basket -probably stick with the ETF's and favorites for the first few weeks. Entries when it looks like things are going to move, and exits when it looks like they stopped moving, after a big move, or when I would be crazy not to.

I expect to get better at this - meaning I will allow myself the freedom to not do as well as Scott does, yet keep his trades as the standard.... and daily inspiration.

I am still messing around with the TICKs and buy/sell volume; but I want to simplify as much as possible. I feel like the TICKs have been pretty helpful for market feel, but buy/sell volume shows no consistency yet at all. We shall see.

Also - I plan on watching real momo moves over and over again, e.g., today's EOD rally that I recorded. I want to burn these into my brain - distinguishing between noise and the big moves is what all this practice will be about. I want to get better and better at 'sensing' that things are about to change.

Silly me. What made me so special? Why did I think I could get this faster or easier than anyone else? Pfft.

That is the market - naive beginner's luck reeling the innocent in to suck them dry. Familiar to everyone who has tried trading. I plan on sticking around awhile...

Two years - if I don't have 'it' by then, then I will move onto something else. And still have my money.

Sweet tune. 

I am going to post the recorded charts for the record - I want to save the buy/sell volume for future reference.  Some of the charts will have trades, but I am not posting all the trades tonight; pretty much the same old thing I have been doing - seeing momo where there is momo - and unfortunately - where there is chop. I plan on processing/analyzing my trades more while I am in the moment, taken in the context of the entire market moment.

I am beginning to wonder about the value of static historical charts.

Details:

ABX:

BP:

BTU:

CLF:

EDZ:

GG:

LVS:

PCX:

QLD:

RIG:

TNA:

End of Day Journal (7-13-2010)

Summary:

Woke up early, got some exercise... started up the charts and was so tired went back to bed for a couple of hours. I ended up doing some paper trading but nothing to brag about.

Spent the rest of the day trying to get caught up with some book work and Costa Rica prep, and still at it. Anyhoo...

Found some some great new artists to keep me company with the bookwork:

Bon Iver

The Tallest Man on Earth

Up early for a round of Disc Golf and then I plan on paper trading. On a side note, that new visual on the buy/sell volume did not work out at all. I am probably going to scratch the whole idea, but for now I will keep recording the day's activity.

Summary:

Another day spent watching the markets unfold. I also paid attention to the live buy/sell volume on a couple of stocks - previously I had only reviewed them EOD. The day was also broken up with picking up my wife from the airport.

I have to say again, this is a new experience for me. As I mentioned to Fozz after market close today, I have only ever studied static historical charts, attempting to identify patterns before the big moves - or been actively engaged in and trying to profit from the events, via live/paper trading. Watching/listening to the market like this is lending itself to some objective perspective: I am going to call it a much sharper focus and even some market move anticipation; sometimes I feel like the market is going to do something. This is all new to me - and I am starting to think that this might be where master traders find themselves. If so, letting this 'feeling' develop and mature so it is familiar/strong enough to withstand the emotional live (and in my case even paper) trading gamut is probably the way to go.

Heh -  always the optimist, clinging to the idea of a turning point - but I like to call this progress. Time will tell. It is definitely different from any other approach/attitude I have had thus far.

I am going to post the charts and notes for the sake of posterity and my own personal later review; they are a little cumbersome. The most interesting one is the ABX which had a strange volume signal on the 11:20. Might be a misprint. Still not sure about this indicator - I like the concept (and it doesn't lag), but it looks like some big moves happen independent of the respective bid/ask trading volume. I found a better version of the buy/sell volume on the NT forums which should give a better visual and perhaps a better sense of market bias.

Also of interest, I ran across an article this morning (somewhere on my iGoogle page) about the dying language of trading hand signals. There is a guy documenting all of this over at http://tradingpithistory.com/.

Anyhoo - he found a 1989 copy of a trading lesson presented by Charlie D (the 'Michael Jordan of the Pit') and posted it on YouTube. I started watching it during some of the more boring market moments today and couldn't quit. Fascinating - trading venues have changed, but the basics of making money haven't: add to your winners and cut your losses. He spends about 70% of the video talking about pit position and how to get your orders filled (BE LOUD), but I found it worth the sit thru. Timeless: 'I have known successful doctors, lawyers, and teachers; they all at a certain point in time want to give it up and do something else... I don't know anybody that is good at commodities trading that ever gave it up.' Best business in the world.

Details:

End of Day Journal (7-9-2010)

Summary:

Another day spent watching the markets unfold. Primarily this consisted of the TICK, TICKQ, and the Q's. I charted the 5 minute and then the 1 minute Ticks against the 5 minute Q. I made notes on the 5 minute version throughout the day:

Yes  - a lot of stuff on the charts. The advantage that I see with the one minute Ticks is that it is much easier to see overall market sentiment. For example, just looking at the 5 minute today, the fact that the market was bullish for most of the day is not quite so easy to pick out - the 5 minute candle dips, perhaps shooting right back up, but for the casual observer, it could have been negative for most of the 5 minutes, without him/her ever being the wiser. The one minute is more reflective of where all the action is.

It is a little hard to tell on the chart above as I was trying to squeeze the entire day in, so here is a condensed version:

(On all of these, the navy blue line marks the '0'; the lighter blue line marks the 'average' levels; 600 and -600 on the TICK, and 400 and -400 on the TICKQ. The 600 level is more or less supported from various internet sources; I threw the 400 line on the TICKQs yesterday just because it looked about right.)

The Ticks rarely got down to the average low level at all today, and you can see in the 1 minute, that they did not hang around negative much at all.

Interestingly, a mixed bag on the signals. Some of the extremes or new high/lows presented good fade opportunities - in fact nearly all did if you were very quick, but it would have been tough betting against the bulls.

Also - All the bullish side action lends a lot of support to the 11:55 market breakthru.

Another thing I did today was record the buy/sell volume on several stocks. I had one chart set up especially for the Q's:

I got in a little late on this chart, hence no buy/sell until 8. It is clear to see that the trade at ask volume far outweighs the trade at bid volume - very bullish. This may offer some indication of when to get out of a trade.

Interestingly enough, the buy/sell volume showed some interesting action later in the day. I just took snapshots for later review:

Of interest here are the far right candles - notice how many trades are filling at ask, the first two are of the same candle, the next two are of a candle ten minutes later, and the last is end of day. Strong buying, but the Q's dropped like a rock; it didn't keep up though.

Based on that sequence, the buy/sell volume looks like a strong indicator. However, I recorded several additional stocks as well, and kind of a mixed bag. I will post BP first - Scott traded it and I marked his entries. You can judge for yourself, but I am reading bullish on the buy/sell volume on BP for most of the day; it does start evening out when Scott shorts, but I am not sure that I would of read it well enough to call it - perhaps with the doji at the top printing. That might be key - buy/sell volume within candle context.

(Of course, Scott just nailed it.)

I actually tried a little experiment - limiting the view to only the buy/sell volume, I tried to determine what the price was doing (as checked by the candles): bullish or bearish sentiment. I got surprisingly close on all of these. I may post these over the weekend.

Well - I am feeling braver. I think this has been a healthy exercise - watching and trying to learn from the market without even paper trading; it puts me in a completely different place mentally: pure focus. I wonder if this is where I should be while I am actually trading? I think so.

The plan is to do this another day; then I am scheduled for a paper trading conference - going to spend half the morning comparing observations with Eric on Tuesday. I hadn't been doing the affirmations - strange how quickly it can come to seem routine and mundane. I picked them up again today and plan on keeping at it. I think the affirmations probably play a much larger role than I ever acknowledged.

Have a great weekend.