End of Day Journal (11-9-2010)

Summary:

Traded live on 100 share lots today:

Keep in mind the above does not include commission, which amounted to about $50 today.

The morning was fairly un-eventful. I didn't find many opportunities, or I was late in spotting them. This afternoon started off with an early long on EOG, then calling a bottom on DRN when there was clearly no end to the sellers (unfortunately I couldn't short DRN). Then some great calls on NFLX and a timid short on SLW put me back in the money.

After the timid short on SLW though, something happened. I remember thinking that the SLW exit was silly and I was playing it too safe. I then proceeded to try and not 'play it safe' on NFLX. The first entry came off a $0.60 swing and I placed a limit on the exit and missed it. I thought to myself 'It will come back' (hope). I then got stopped and frustratingly went long at the top of the range and sat thru the bottom again after I reversed. Anyhoo - out of the rhythm for the next several entries.

I was frustrated in the moment, but I took a brief time out and jumped back in for the last 30 minutes of the day and gained some back.

Getting out early on a runner - say I misjudge the exit and the stock keeps moving - sets me up to start acting stupidly. I would look back over the last 6 months and say that this is perhaps what I have struggled with the most - even more so than getting stopped out a few times. In fact - if considering how they both affect my psyche, I would say that the two do not even compare.

It is like this (and I wonder that I have been unable to think of it from this perspective before) - getting stopped without direction happens - just the way it is. Getting out early though causes me to begin to doubt myself - 'How did I miss that SLW was going to run another $1.50 and change? I must have been afraid.' Then I begin to doubt what I see happening. The next trade (in this case NFLX) goes something like 'Time to get out. Wait - remember what I did on SLW? I missed the big move. I must have been afraid. Give it more time.'  But that is the end - my focus has shifted away from price action and to myself - and whether or not I can be patient. This comes out as hope ('No one knows what will happen. It could keep moving - remember what SLW did?') which quickly turns to fear or frustration when my stops are hit - I set myself up for the biggest psyche drain of all.

When it comes down to it, this is about trusting myself - there is no way I can get every trade picture perfect and I was doing very well on my exits until SLW. Seeing how much was left on the table (after the fact) set me up for disaster. I need to be very aware of this.

To finish off the day, I had to remind myself that every moment is unique. There is no way to predict what will happen next. My decision to entry/exit has to be made on a moment by moment basis, depending upon what is happening now - not after I exited. My attitude has to be - I did exactly what I thought I needed to do at that moment - and it was the right call for the moment. I need to trust my ability to do what needs to be done. I am not going to get all the big moves and I need to be okay with that.

Fear that the price will come back or hope that a price will keep moving are sure signs that I am not trusting my ability to see.

Unbelievable as it may sound, I am still very confident in my readiness for this. I think these first few days have been the initial jitters associated with switching back to live trading. Did sim trading feel different? No. The fact that I went live - and that I post and blab about all this stuff - is far more difficult to handle than losing $85. I can think of two things to do - stop posting or start only posting my successes. But heh... The blog allows me to process, this is me, and this is real.

And it may eventually help some other poor sap trying to figure out how to do this trading gig for a living... that is, after I am successful and suddenly everyone finds I have something worthwhile to say...

Trade well.

Details:

Note - there is an extra 'indicator' on the 15's that I forgot to take off. I don't use it for trading - at all.I just keep forgetting to take it off...

DRN

EOG

FCX

NFLX

SLW

End of Day Journal (11-8-2010)

Summary:

I did the Meyer's-Briggs test over the weekend and tested as an INTJ. I began to wonder if my wife could still love me.

Live trading 100 share lots today:

Fantastic morning. One of the best considering the number of shares I was trading. The afternoon consisted of false breakout after false breakout, and I got hooked over and over. I could of easily made it up, but I got a little greedy. In fact - it was after I got out of one position too early and leaving a bunch on the table that I started going downhill. Remember this.

Incredibly long and busy day. Just got back from an afternoon/evening gig and exhausted. One of the great things about AZ is the time doesn't change, which gave me an extra hour of sleep this morning - but it left me hustling on my usual Monday afternoon routine.

Nothing to show on today's charts but a lack of afternoon focus so I won't bother. No greed tomorrow, only taking what is offered. I may drop down to 50 shares as a buffer until I get comfortable - I would rather not risk the emotional turmoil if a second day would go bad, but for now I am feeling perfectly fine on the emotional front. I refuse to judge my financial performance until the week is done. Sleep well. Trade well.

End of Day Journal (11-4-2010)

Today ended up being pretty much a washout (paper trading 200 shares). I had an excellent morning, catching NFLX twice on the downside and AAPL on the upside, and FSLR on the first swing up and then short as it dropped again. I was stopped out once on NFLX. I was up about $400.

Then NT's customer support called about a bug I reported (live PnL calculations of on the 64-bit version of chart trader) and he took over my computer and did several arbitrary round trips to try and pin the problem down. I re-set the sim account after we were done (with about 30 minutes till lunch) and racked up another $100 on NFLX as it came off the bottom (one stop and one profit).

I was feeling like I could take money at will from the market by the time I was ready for a break.

I then proceeded to get tossed around for the afternoon session. I decided to only post my losing trades to take a closer look at things.

I want to say something here. I am becoming more and more convinced of it's importance. This analysis is not about the charts, price action, or even about what was happening to me in the market. It is about what had just happened and was happening in the market. I got taken for a ride on some range bound bottoms because I ignored some clear signals. And maybe I was feeling a little cocky...

But - would anyone care to distinguish between healthy confidence and 'pride goes before a fall' cockiness? I think healthy confidence stems from a realistic evaluation of one's own skill - and that is what I was doing - taking money from anyone that was willing to offer it (well... on paper at least). There is not a shred of doubt in my mind that I can do exactly what I did yesterday and this morning every day. That is, if I focus and pay attention to what is happening.

And I think that is key - this new chart setup was so different that it forced me to change my perspective. I spent the first few days trying to tweak the TA (and some part of me thought that it was fun) but I recognized what I was doing and realized (thanks to all the good stuff I have been reading on blogs and books) that it was a fruitless exercise. I had no 'patterns' to go by on these charts but I believed in the principal behind them (price only), so I stopped messing with the TA and whatever, and began to look at the charts for exactly what they where - people's reactions to whatever it is that they are believing. The charts go from fear of losing, to running out of fear (i.e., people that fear), to fear of losing out. Dynamic. Completely unpredictable and moment by moment. No chart pattern in the world can tell me how far a stock will run. I need to get in touch with and understand what is driving that run.

Anyhoo - after the analysis it is evident that I did the same thing every time on these entries. I will strive harder to pay better attention.

For what it's worth, I ran across an interesting thought on Douglas' video the other day - the idea that 'accepting the risk' is more than consciously accepting the potential monetary loss, 'accepting the risk' is about finding good reasons not to make an entry. I think I forgot some of this this afternoon.  

Tomorrow is dissertation day, so no trading.

I am going live next week. I will be cutting down to 100 shares for awhile to condition myself. I am trying to recall why I was - and what it felt like - trading 1000 shares when I started this latest endeavor. It completely boggles my mind. Heh. I will try to update all the relevant pages this weekend... but it looks to be busy, so no promises.

I am sure I am in for a lot of surprises yet.

Trade well.


AMZN

I shorted on the 'new' low and let the stop run wild to see what would happen. Looking at it now, the 45, and the 15 for that matter, was showing some definite exhaustion.

BIDU

Assuming the same principal - nothing showed exhaustion to the topside on BIDU - I should not have been shorting. The 15 signalled exhaustion on the bottom side and I reversed properly.

CRM

I got hit several times on CRM. It had been trading lower all day and my first entry was on a new low. It continued more or less range bound - and again, turned right on my stops. I am still not sure how to avoid this. There was an exhaustion bar on the 45 just prior to my first entry which could of been a clue.

FFIV


Again... exhaustion showing up on the 45 on the new low.

FSLR

I had the right idea on FSLR - but early. Then I tried to short - frustration? Looks like it.

End of Day Journal (11-3-2010)

Summary:

Paper traded 200 share lots today:

I started the day very much aware of my fear, and finished the day pretty much on the same level. I think this is telling in several of my exits. More than anything else today, I tried to stay in touch with how I was feeling and how it was impacting my perspective. Then I just traded as it looked like a move was running out of participants. I also focused on fewer stocks, per yesterday's thoughts.

I traded on the 15 & 45 range, but am using the 5 minutes to chart because of the crazy action around the announcement.

Trade well.   =)

Details:

AMZN

FFIV

FSLR

 NFLX

End of Day Journal (11-2-2010)

Summary:

Paper traded 200 share lots today:

Not much to say today. Not much happening with the general market, but plenty of stocks were moving. I did a few things well, and some not so well. Perhaps the most regrettable trade of the day was on NFLX, I had direction and it got stuck in a range. Hard for me to recognize this when it is happening. I traded it on the breakdown and then started looking elsewhere after I squeezed a profit out. Of course, then it moved.

I may try to stick with one or two big moving stocks tomorrow and play the waves.

Trade well.

Details:

AAPL

APC

CF

CTSH

MCP

MHS

NFLX

POT

RAX

End of Day Journal (11-1-2010)

Summary:

Paper traded 200 share lots today:

Three-day weekend... at least 3 days away from trading.

Friday was a productive dissertation day, but given Saturday and then all day Sunday to wonder 'What if?', I was able to wrestle up a lot of fear and trepidation. What if last week was a fluke? What if I never get this? Etc., etc. Crazy stuff huh?

Well, the morning went pretty well profit-wise, but I could tell that I was not in the 'zone' that I was in last week. I felt in tune on the NFLX, BIDU, and POT trades (maybe because these were moving relatively fast?), but out of sync on the others. I debated quitting for the day, but I thought it would probably be best to get as much time as possible if I want to go live eventually. I took some time out and tried to re-focus before the afternoon session.

Things went so-so. I felt beat-up by mid-afternoon. Definitely not in the place I was last week. I couldn't adopt that 'other end of the trade' perspective that I have come to realize is so important. Should I of stopped trading? I am thinking that part of being successful in this business is knowing when to stop. Do I give this up in order to put in more screen time while in training?

I don't know. There is always money to be made on the markets - always. This afternoon it just happened to be on the other side of most of my trades. I think I need to learn to adapt to every market scenario.

But - the primary piece of equipment in my trading business is me, and if I am not feeling up to the task, I probably need to stop. Feel free to offer some opinions on this.

This afternoon was marked by some interesting positions - positions that I have taken numerous times in the past: trading what I saw as breakouts/breakdowns but ended up only being ranges. Part of this is automatic for me - I see it and I think I need to trade it, even against my better judgment sometimes. I would like to take a closer look at the CTSH and POT entries.

Here is the 15 on CTSH (afternoon):

Here is the 45 range - and what prompted the initial afternoon short:

When I entered the afternoon short I was seeing higher volume on the 45 with a red candle and nice topside wick; ideally my preference would of been to see either a big volume on the 15 doji, or very small volume (buyers are exhausted), but nonetheless, the entry was the thing to do (maybe a little early). Anyhoo - after I got stopped, I tried to short 3 more times. In hindsight it is very clear that the sellers were running out of steam (the wick disappeared on the 45 and the candle went nicely green). I forgot to stop and re-assess the situation. I finally had to agree with everyone else, but by then I had lost 30 ticks of stops three times and was mad at everyone except the guy running the show. (Thanks to Tarigal for processing this with me EOD.)

Here is the 15 on POT's afternoon:

 
This was my typical 'feed-the-winners' range ploy. We had new highs on volume, I waited to see what would happen and entered as we had a drop on no volume. I thought I had my stop out of the way, but it still got hit. I was thinking that all that volume had to mean something so I opted to short. I ended up selling to the winners and got stopped again. I went long on the new high and got stopped again.

Yikes... and this is all sim trading. The thing is, it looks as if someone was thinking the exact same thing that I was. POT was not going anywhere very far, but it is almost scary the way that my stops called the turn around points. This tells me that I was holding hands, looking both ways, and crossing the street with all the losers; I was on the wrong side of every one of those trades. What was I thinking? How can I change my thinking? How can I exploit it? I could move my stops further away, give it more room to work itself out. But I can get in trouble with that as well. I forget what the spread was on POT. Opinions?

I am getting a lot of exits spot on, which is pretty cool. In fact, I am tuning into much more of an intuitive feel with respect to some trades - e.g., this morning I knew CTSH was not going anywhere long before it came to my stop; it was almost as if I could 'sense' the shift in order flow. Reversing on more of my entries and trying to dial into what was going on would of left me sitting very well, e.g., on NFLX's morning reverse I had enough of a 'sense' to continue watching and reverse, but I only guessed at a target and didn't bother considering that this could of been the LOD. NFLX, BIDU, CTSH, and POT all had good reverse direction after I exited; I need to start making myself more aware of the possibility.

Another thing that I noticed today, on some of the morning's entries and the afternoon's range bound plays, I sometimes trade simply because there is a 'sign' and I think I need to. This morning for example: I set the market analyzer list up to flag exceptionally high and low volumes on the long and short range bars - theory being a change in volume often signals a change in order flow. My intention was to pull these up on the charts and watch them to see what would happen - but often I found myself 'just trading' because the signal was there and I 'needed' to trust the signal. Likewise with the afternoon's 'breakouts/breakdowns'; they were there, so trade them. I think this is a huge mistake and speaks to the core of my bad habits - it is looking at something outside of myself to make the trade/not trade decision. I need to maintain that control - I should not be handing the responsibility to trade off to a signal. That is my 'old' (so two weeks ago =) ) approach to trading. I choose when to participate - not the signal. 

Well - despite the weariness with which I approached today, and some mistakes, I convinced myself that last week wasn't a fluke. Crazy mind games. I am going to try and keep my blog entries shorter because this takes a lot of time, but I feel that today's blog time was very productive.

Taking one week at a time on the live trading front.

Trade well.

Details:

AEIS

APC

BIDU

CMG

CTSH

DRN

IPXL

NFLX

POT

UPRO

V