40% in 2011

I

In2Deep

I'm starting this journal to keep myself accountable to my goal of 40% ROC in 2011. A lurker for a some time now, this is my first time posting to ET but I've read a number of journals on this site that I found pretty enlightening which is what inspired me to do this.

A programmer by profession, I am relatively new to trading, gaining experience as I go. I did pretty well swing trading US equities in the latter part of 2010 but I'm less comfortable doing that in this market where value is getting harder to come by.

So still focusing on the US equity market, I'm introducing intra day trading techniques into my repertoire. Specifically what I've come to understand as RTM trading, or exploiting price distortions.

I've done reasonably well trading intraday under my paper account using this method so it is time to hit the market for real with a goal of 40% in 2011. I think that is a pretty aggressive goal for an arguably inexperienced trader like myself so I'm not sure what to expect.

This will be especially challenging since I am sitting at just a little better than break-even so far for the year. Today was my first day of serious intra day trading and I got my ass handed to me trying to fade the bullish EBAY news, taking a good chunk out of some swing trading profits I've managed to accumulate since the beginning of the year.

Also, in this thread I will probably talk about the performance of my automated swing trading system which I just finished developing (I am a programmer after all, it would be silly of me not to have an ATS). Currently I'm testing it under my Interactive Brokers paper trading account and it has about one week of paper trading under it's belt and its modestly profitable.

I'm hoping my publicly exposed trials and tribulations will illicit commentary, good or bad, from the more experienced traders on this board. At the end of it all hopefully I will have at least learned something. Thanks for reading.
 
Wow. My username says it all. Got schooled again trying to fade bullish news. This time it was WYNN. Lesson learned--don't go against multiple upgrades and good earnings no matter how distorted the price gets because just when you think it can't go any higher it goes up yet another couple percent. And just like EBAY yesterday, when it finally does peak it just levitates there so even if you timed the top perfectly you'd be lucky to pocket half a percent.

This puts me at a loss for the year so far... bleh
 
Quote from In2Deep:

Wow. My username says it all. Got schooled again trying to fade bullish news. This time it was WYNN. Lesson learned--don't go against multiple upgrades and good earnings no matter how distorted the price gets because just when you think it can't go any higher it goes up yet another couple percent. And just like EBAY yesterday, when it finally does peak it just levitates there so even if you timed the top perfectly you'd be lucky to pocket half a percent.

This puts me at a loss for the year so far... bleh
More...

Don't fade news. It increases the probability that you will lose. The best fades are at the open during the first 30 minutes of the day. The only news-related fades I would consider are earnings moves that are overextended...but manage your risk, because sometimes they continue to overshoot. That "it has to come back" mentality will end your career pretty fast. Just some advice from experience.
 
Thanks. I may be guilty of forcing that WYNN trade 'cause I didn't see any opportunities off the open. Should have just side-lined it on Friday.
 
This is pretty pathetic but my screw ups last Thursday and Friday brought my account below 25K so I can't even trade this week. I don't quite understand why but IB won't even let me open a new position whether I it's a day trade or not. So I'm just going to practice paper trading this week.

I have the money to get my account back over the pattern day trader requirement but I'm just going to use this as a good excuse to take a break and observe for a while.

Attached are some paper day trades i did today (Screenshot is attached).

MXIM Short 1.28%

I thought this rally was way over-extended so I entered this trade betting on a price correction of at least a percent or two. I was prepared to hold it over night but the correction came a lot sooner than that.

ROST Long 0.17%

This is a low-margin style of RTM trading late morning to mid-day, much less lucrative than trading off the open volatility. Basically I have signals that indicate when a stock makes a significantly greater-than-average move. Most of the time it is nothing i would trade off of but a lot of times as with this ROST trade it is a result of a large sell order or something else which causes the stock to get knocked off its trend. When it corrected back to it's general trend i sold.

ILMN Short (0.05%)

I saw the price jump significantly along with a big volume spike. I thought it was just a large buy order or something because the volume went back to normal pretty quickly but the price didn't do what I thought it would so I got out. I keep tight stops on these types of trades which seems to be working as long as I'm very picky about my entries and do it in a relatively low volatility environment.

RIMM Long 0.20%

Just like the ROST trade. I saw the price deviate momentarily from its general trend and made a bet it would make a near-term correction back to the trend. As you can see I was a bit impatient with this one.

CTXS Short (0.15%)

I had a change of heart on this trade and cut it off quickly after seeing the sheeple on twitter babbling about bullish stock patters, 52 week highs, blah blah. It was a bit too reminiscent of the terrible EBAY and WYNN shorts that blew me out. I'm realizing that people are just rushing into and chasing anything that hits its 52 week high. I'm done trying to fight the crowd.

I also dabbled in trading spy today and was pretty good at predicting micro trends and managed to grab 45 points. I don't really know if that is considered good or not. Probably not.
 

Attachments

Still just practicing but not too bad a day I guess. WCRX popped way beyond its average range right off the open. This is what I would classify as an RTM trade although I could be totally off base. Everyone seems to have their own interpretation.

Anyway I didn't see any news other than the company reported inline guidance and I didn't see anything technical or fundamental that would warrant such a drastic move based on that bit of information alone so I wen't ahead and entered a short position.

It happened to work out this time. I have been setting my profit target at approx 1.5% for these types of trades but in this case I could have made a lot more if i had remained patient. Still working out what to do about that.

CEPH looked like it was setting up as a good short but it just hung there so i got out.

I also traded some SPY somewhat successfully again today but I don't know if it's just luck or not, so I probably wouldn't make those trades outside my paper account. I wouldn't be comfortable using a strategy that essentially involves making seat-of-my-pants "educated guesses" on what the market will do next.
 

Attachments

Haven't posted here in a while since I haven't made any trades in my discretionary account in about 2 weeks. Waiting on a funds transfer so I can get back to trading for real.

I mentioned at the top of this thread I would be focusing on RTM-style trading but I have been getting less and less comfortable with that. I have been having a lot more luck trading WITH the news, not against it, but only in cases where the volume increases by many-fold and liquidity is very high. For example there was the PCLN orgy this morning. I don't understand why people are so apeshit over that company but the price action said to go long and that would have been very lucrative. Another example was CHK earlier this week, also a winner if you picked the right time to enter.

Fortunately I sold most of the long positions in my retirement account before this sell-off. I'm averaging back into positions as it continues downward. My retirement account is pretty conservative, mostly long-term value stocks, no day trading BS.
 
After a self-imposed hiatus I am back to working my intra-day strategy for real. I will start posting more consistent daily P/L figures along with current YTD Mark-to-Market performance on my account as a whole.

I have been enjoying the market action recently and I'm getting a kick out of the analysts' rationale for the various moves we're seeing. Today was no exception. I made some money on a couple short trades off the open and some more off a long trade later in the morning.

I'm still working on fighting emotional issues like adrenaline spikes when I start trading size for real. I do just fine in paper trading mode, and the fills I'm getting in the real world are not too dissimilar from what I got in simulation mode (in fact im getting some fills at prices better than the posted bid/ask) so there's no reason I can't do just as well in real life. I'm still negative on the year although a lot of it is unrealized losses on some longer term positions i'm in the process of accumulating as we work our way through this choppy period.

Today P/L
$174.77
YTD ROC
(6.5%)
 
Not a good day. However I am not too disturbed that today's losses exceed yesterday's profits because the majority was from a fat-finger this morning. Just human error, not an emotional breakdown. Not that I traded unemotionally today. My lizard brain took the reigns on a number of occasions, and I'm still suffering from adrenaline spikes. This can't be good for my health.

Any tips for limiting emotional stress, or remaining calm, would be appreciated.

Today P/L
($182.76)
YTD ROC
(5.98%)
 
Crazy market. Traded horribly today. I know those who know what they're doing are making a killing in this volatility. I liquidated all of my long term positions in my discretionary account--all of which for a loss--which made up half of today's realized PL.

I told myself that if i dip below the pattern day trading limit again I will not re-fund my account so I'm just focusing on trying to stay in the game at this point. For this reason I cannot risk massive draw-downs in my discretionary account. However I was buying today in my retirement account.

Today P/L
($1,703.46)
YTD
(7.42%)
 
You must log in or register to reply here.
Back
Top