End of Day Journal (10-22-2010)

Summary:

Paper trading 200 share lots:

I started trading this morning but ran into some technical glitches so ended up spending all morning on getting things straightened out again. I went for a quick walk then over lunch and came back for the afternoon session.

I plan on taking the weekend to make sure I have everything nailed down, but it is difficult in a non-live data environment. I am trying to develop something so I can see the chart trend info on a worksheet (NT's MA), which lets me ignore charts that are not trending (fast EMA is not over slow). I find that using the range bars forces me to pay more attention to a stock if I want to trade it, when a stock is in play, I have to watch it closely or I lose the opportunity - on the entry and exit. So I want to spend less time flipping thru charts and more time watching charts that are of interest. Creating the worksheet allows me to quickly weed out blah-blah charts with a glance.

Pretty much have it done, but still getting the occasional weird reading.

So many opportunities today.

It seems I still have a problem with winners becoming losers with this approach, especially on volatile stocks - but this approach helps keep me in big trends and I think it is worth the occasional +$0.80 gain coming back to a stop (I just need to believe - CMG was good for another $1).  I also tend to anticipate moves - which had me placing an early long on AAPL. These are the same kinds of problems I have using the 5 minute charts, however now I am only trying to trade trend, which kept me out of reversing and probably doubling my losses. Funky. The real variable is always me. Gotta believe.

Trade well.

Details:

I am posting snapshots from both ranges today for my own records. I forgot to turn off the test signal I was using to create the worksheet on the 15's so there is some extra noise.

AAPL

 AMZN

 CMG

FSLR

Today's trades on the 5 minute chart

Interestingly enough - while using these range charts I feel like I have no idea on what really happened during the day. I think it is because I am used to having the entire day on the chart at EOD. It is pretty funky - when I enter the trade I have very little opinion on what happened a couple of hours earlier.

For comparative purposes I brought up all of today's trades on the 5 minute - do the trades make sense on the 5 minute that I am used to watching?

AMZN

I am not sure that I would of taken any of these entries on the 5 minute, but they look good - breaking S/R. The attempt at a short in between was not a good idea - and not justifiable on the 25 range after I looked at it some more:

GS

Looks like this came off a doji, but prior chop has me saying no-way.

V

Looks reasonable - in fact looks like my stop was on the top of the 2:00 - which corresponded with a dynamic S/R that shifted at 11:43 on the range chart. Kind interesting.

Anyhoo - probably won't do this often - just puts the day in perspective - I had no idea whether or not the stocks finished down or up for the day on the range charts. Based on the 5's, I would say that it was a nice day to trade. I am wondering how I will do with the range charts on a sideways day.

Trade well.

End of Day Journal (10-21-2010)

Summary:

Paper traded 200 share lots today:

The charts and summary only reflect the afternoon trading. I traded the morning but forgot to switch the chart over to the 20 range bar. I ended up bouncing around some between the 15 and 30 range bars. By the end of the morning I was up about $100 on 20 something trades (per NT) and had decided to go with 2 charts: one 15 range for the smaller moving stocks and a 25 for larger moving stocks. I re-set the account for the afternoon trading to put it to the test.

I ended up watching NFLX ($8.36 using high of the day minus low of the day) and AAPL ($7.94) on the 25 and V ($2.3) and GS ($3.4) on the 15. For AMZN ($4.84) I actually referred to both charts, probably because I was in it so long - entering and exiting on the 25.

This seems like a good compromise so I plan on sticking with this setup for the next week and a half. I am trying to get some alert columns setup on the MA (general 'stock in play') which might be awhile.

Not much to say about the trades, I am still getting a feel for the range bar price action, but I really like looking at the data this way. Had some 'Do I believe?' moments while in position, but other than that, a stress free day of trading.

Trade well.

Details:

AMZN:

GS:

V:

End of Day Journal (10-20-2010)

Summary:

Paper traded 200 share lots today:

I traded using the new setup today. I have a few things to get used to yet, but I liked the way that I traded on it.

Largest stops:

DRN for $0.32/share.

Largest wins:

GS for $1.62/share.


For the new setup I am using range bars, a few MA's, and some dynamic S/R. For those who don't know (I had to look it up), range bars eliminate the time variable by forming bars based on the change in price. I am using $0.15 per bar after trying it out over the last couple of days. Subsequently, all the MA's and S/R are based on price as well. Pretty powerful, and personally, I think it is a better way to describe what is happening with the stock - everything I see is price.

Here is the big GS trade on the new setup:

What are all the lines??? Heh.

All the curved lines are MA's with different periods. The ones in the main part of the chart are very long period, and the ones on the bottom portion are shorter. The straight lines and shading are dynamic S/R - something that saves me from drawing lines on the chart for breakouts and breakdowns. The purple lines are a Donchian channel.

The trade on the confirmed trend (MA's) and either support or breakout. I ran across the basic setup on BMT.

Part of the setup included finding an appropriate range - if a stock moves a lot the bars can race by.  AAPL bounced around over $13 yesterday, today it was a little over $7. The 2:00 to 2:09 took up the entire chart width:

While DRN's entire afternoon fits on one chart:

$0.15 seems to a good compromise. AAPL could of been bumped up to $0.20 or maybe even $0.25 or $0.30; it is trade-able on all of them. After looking at a lot of the trades, I think I will try the $0.20 on everything tomorrow.

I am still becoming familiar with the setup and made two bad entries today, but other than that pretty much did what I was supposed to. I have a good feeling about this setup - as long as I keep doing what I am supposed to be doing, I think it will work.

Details:

I am posting the trades on the 5 minute charts because it takes fewer images. Not sure how I will work this in the future.

AAPL

AMZN

 BIDU

 CREE

 DRN

 GILD

 GOLD

 GS

MCP

Interim - Where is DTF?

I haven't been trading over the last few days - I ran across a chart setup over the weekend that I decided to experiment with. (Yeah - I know, Fozz is going to kill me...)

Anyhoo - same basic idea - trade with the trend but a slightly different way of looking at the info. I think I have everything tweaked now and I am planning on trading it and hopefully getting back to posting tomorrow.

Unless I completely fall flat on my face. Heh. 

Naw - even if that happens I will post. Nothing to be ashamed about here. It even includes a black chart background! Whoot! =)

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

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