Best of Trades, Worst of Trades, Some of the Others too

This one, as the worst in a disastrous series, will have to be emblematic for an awful day.

For a long time now, it's seemed that I always get killed on big up days. And what could be worse? The whole universe seems to be holding a party, and I'm totally on the outs.

I've studied big gap up rally days, I've reflected on them, I've thought about how I might handle them differently. I COULD adopt a different approach entirely, or re-double my efforts to trade them properly - or I could just sit them out as soon as the first few terrible trades (hopeless shorts or late, poorly selected longs with overly tight stops) start putting me in the red...

Looking back on this trade in particular - an attempted fade - it seems rather obvious that I should have stuck to a tighter stop. Instead, I had adopted the idea of using a wider stop and sizing the position smaller. I had great confidence that, with the market rallying as strongly as it was, and with INTU selling to its 50 DMA and a support area on the charts, it would bounce... It did, eventually, but not until it had shaken me out and thrown in some bad slippage - and not just on this trade but on multiple attempts, despite some token successes along the way.

Just to complete the picture of frustration - the stock bounced nicely a couple of times when I was looking away; a couple of times I left decent profits on the table, partly due, I think, to some confusion involving AMEX participation (yeeeech); and there were, naturally, a couple of other plays that I turned down in order to focus on this GREAT one...
 

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Even on strong up days, even on otherwise decent looking "Rudd breakout" patterns, odds still are against breakout plays with entries below critical resistance - in this case a major high: Breakouts on APCC not just above the recent 15.15 but the major 15.25 might at least in theory have a better chance of paying off.

Seems to me that if anything can go wrong in this market, it probably will, especially for support/resistance or market structure trades. A different set of difficulties and obstacles confront traders using different styles: Trend-following, sector-strength "packers" should clean up on days like today, but can have horrible times, I've been given to understand, in the kinds of markets I do best in.

Mastery in trading may come in many different varieties, at least as many as there are different trading styles. One form would certainly be the ability to adjust one's approach to what the market was offering, to be able to trade trend and pullback/snapback strategies with the same fluency as s/r and structure strategies. It is said that, for various reasons, not many traders, even some very good ones, ever gain this ability.
 

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... bad, painfully bad trading today... confidence shot on repeated attempted gap fades on VRTS that didn't get anywhere... began to feel world was out to get me... something terribly wrong with thinking, approach, self... emotionally crushed by 0700 AM... got even worse when, as so often, noticed that alternative plays did fine... must be a reason, other than that at some deep level I'm trying to lose money, maybe the gap fades work better on less high-profile stocks... rest of the day followed the same course: trades with possibility closed at worst possible moments, stops closed prematurely by one tick, off bad-looking L2, out of fear of slippage experienced earlier... stock proceeds to move in correct direction... two great possibilities, a breakdown and a breakout either of which could have made me whole for the day instead closed prematurely on perceived but unreal reversals... coup de grace applied to self in the form of bad trades of the "make something out of nothing" variety...
 
...but am not getting much out of this journal, either... no feedback.. no idea who is downloading the trades I post... whether anyone else gets anything out of this either... starting to feel stingy... why even share this confession?
 
...now that I've gotten that out of my system... or at least have begun the process of doing so...

There's nothing wrong with my theory and my trade concepts... I'm aware that simply ceasing trading for the day when things are getting out of hand, or at least stepping away, is often advisable, but, performances like those today and yesterday notwithstanding, it has also been my experience that some of my best afternoons have followed some of my worst mornings. Quitting when you've hit a bad streak is arguably just another form of letting the last trade overly influence the next one - presuming that you are actually capable of trading like a grown-up.

Some alterations in approach are necessary, however:

1. After research and review, even including some testing, I determined that the gap fades and related set-ups (intraday "collapsars") are among the highest percentage, most profitable, and theoretically most scalable set-ups that I trade. I had decided therefore to trade them more aggressively: I increased size, loosened stops, and prepared to make repeated attempts when stopped out. I know going in that I was therefore also increasing risk, and it was just my luck that my major efforts hit the ol' "refuses to bounce" exceptions that do come along from time to time.

Though I believe my approach is generally sound, I am going to re-examine selection criteria - today, for instance, FITB was also a candidate, and made a beautiful, powerful bounce or two. I chose VRTS because I felt I knew the stock better - but it's possible that the tape on high profile, high volume, popular "vehicles" like VRTS, or like INTU yesterday, is inherently more deceptive, and that major directional moves on such stocks are more likely to be stubborn. I am at least going to keep in mind that, when well-conditioned attempts at a reversal fail, caution must be increased, and that the "secondary" alternative tradables may actually be better candidates - presuming that other factors are in place.

All that said, both VRTS and INTU might have been profitably faded today and yesterday. I'll have to research them in greater detail.

2. I do NOT need to question my overall strategy or my specific set-ups. I do need, however, to re-double efforts at discipline. Even with the VRTS and INTU losses, today's and yesterday's results, especially today's, might at worst have been mediocre if I hadn't let my approach later on get overly influenced by the sense of "being down."

Though I questioned catman's statement: "discretionary set-ups, mechanical execution," I cannot afford to neglect the truth underlies it. If I had simply stuck by my clear trade parameters, I would have been okay. I don't really expect to trade perfectly, but, then again, there's no real reason not to. It's not THAT complicated.
 
A profitable one - but one that should have been by far my best trade of the month...

Much more painful than any of my losses... If you have a weak stomach... don't download the gif.
 

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... that I allowed to infect my performance was "collect a few small wins in order to get your confidence back."

Getting the "small wins" on BLUD and CREE made me feel even worse.

The other thing that happens when I adopt that policy is that I'll take some marginal set-up expecting to accept just a "small win," and I'll end up, one way or another, adding to my losses.
 
Regardless of my final p or l, I'll have a good week because I'll follow all of my trading rules.

I'll not be posting any commentary on specific trades unless specifically requested to do so, though I will post trade gifs - with some new features, including the "hard stop" on each trade (a bright red dotted line for longs, bright green for shorts). Unhindered by extraneous impositions and inappropriate gestures, the trades (or lack of trades) will tell the story themselves.

Otherewise, I may post market overviews, thoughts on trading theory, or useful or inspirational quotations, and I remain willing to answer any questions and to discuss other topics.

Note: I may have to take most of Monday off.
 
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