Bugsy's Sim Trades

[Bugsy]

Maybe opening myself up to flames with a sim trader journal but I don't care. Going to be a while to build my bankroll for daytrading because I'm putting the finishing touches on my emergency savings fund so I bought a subscription with SimTrader and have been practicing frequently since I started.

I'm totally aware that paper trading and actual money are two different beasts as I've traded both, but my plan is to start off with sim and then once I've built up my roll (could be a few years) to properly day trade I will transition slowly. I hope I don't just stop journaling and trail off into obscurity. Also hope others might chime in with bits of wisdom and advice if possible on where I went wrong on specific trades as I post screen shots of the chart on entries, exits, and blunders.

My chart layouts currently consist of candlesticks, premarket support/ resistance lines, 9 and 50 exponential moving averages, VWAP, volume, Daily Average True Range, and RSI.

My current entry/ exit strategy allows about 30 minutes for initial market volatility to progress, look for a return to VWAP, enter, place a stop beyond VWAP noise, sell half shares at about 1.5 to 2 r/r ratio, bring my stop to entry level, and sell the remaining 1/2 position according to price action and volume.

Probably a very simple and predictable strategy that may get me eaten alive, but that's why I'm here, to learn from my mistakes and others.

Thanks

 

[Bugsy]

Having seen it's initial bounce and hold off VWAP in the first 20 minutes at just under $110 I set a limit order for $110, which was just above VWAP and had it filled about 5 minutes later.

I violated my own rule placing the stop at $109.15, well beyond the VWAP, afraid of short term volatility and thinking this would help counter any market noise from the algos. Had I followed my rule and put it at just under $109.80, rather than the $109.15 which I set it, I'd have save myself about .5% (or roughly $125) on the loss which actually triggered below my stop costing me more.

Also set my limit sell of 1/2 position below my 1:1.5 risk reward ratio.



Edit - Forgot to mention in OP, but I mainly use 5 minute chart while fluctuating between 1 and 15 minute for momentum and long term trend.

 

[Bugsy]

I messed this trade up pretty bad. Violated several of my own rules. My thinking in this trade is better shown on the 1 minute chart which shows the anomalies in greater distinction than the 5 minute chart.

To start off let me state I have a bad habit of trying to catch falling (or rising) daggers that clearly go against the current verifiable trend. In this trade it was still early after opening bell, and I violated my rule of not only trading in the direction of VWAP, but of also not waiting enough time for the post bell volatility to wane in order to get a clearer picture. I felt that it being early still, the true long term trend was about to begin as it crossed below VWAP. Obviously I was wrong.

I saw the price bumping it's pre-market resistance trend line I had drawn before opening bell, but what really pushed me was seeing the massive bearish divergence between price action and the RSI as shown in the chart. I sold short at the top of the long candle, and as you can see, a few minutes later it broke the resistance and never looked back.

The correct move would have been a buy when it bounced the 9 EMA/ new support level ten minutes later which would have been a roughly 2% ROI at its peak. Instead I lost .5% when I stopped out just above resistance.

I allowed the strong bias I have in moving on bullish/ bearish divergences to cloud my judgement and defy all of my own rules, rather than in conjunction with them. It's a painful reminder that we cannot expect irrational markets to behave rationally to the way we expect them to.

I clearly have a long way to go.

 

[maxinger]

There are thousands of stocks available for trading.

One of the most important thing about day trading stocks is filtering based on whatever criteria.
How do you narrow down thousands of stocks to CLX, DGAZ ...?

 

[Bugsy]

There are thousands of stocks available for trading.

One of the most important thing about day trading stocks is filtering based on whatever criteria.
How do you narrow down thousands of stocks to CLX, DGAZ ...?

TradingSim has a feature that shows what stocks are moving big (up or down) at any given time on any given day as shown in the image above. I look for stocks between 5-15% price fluctuations to previous day close at market open (as you can see DGAZ and CLX are in the image), pull up their premarket data, and find their supports and resistances. Pretty much gives me infinite stocks to practice with since I have all of the historical data throughout the calendar year.

Edit - To clarify, I also make sure they have a high enough float to outstanding share ratio, over 500k volume for liquidity, and a short ratio of less than 30% of their float

 

[Bugsy]

I stuck to my rules this time, but still lost with one caveat. I entered the trade where I circled the candlewhick at $119.79. I set my stop loss just above VWAP and a resistance at $120.17 which would yield a .3% loss. Sticking to my making at least 1.5:1 - 2:1 risk/ reward ratio would mean setting my half position of shares at .45 - .6% gain, or in this case $119.25 and $119.08.

As you can see in the half circle the price dropped to $119 which would have achieved both of those. However, I set my half position price sale to $118.57, a price I felt it could achieve just below a major support level, but above the rising 50 EMA which would have given me a 1% ROI.

As you can see in the chart the price closed above VWAP and both the EMA and RSI broke above resistance triggering my stop loss just above my stop out price $120.34 for a .4% loss.

Bear in mind, in reality, most traders will have many stocks with many price alerts setup and will determine whether to enter into the trade based on a number of elements, and this chart may not appeal to many since the price action around the EMA is so wishy washy, even if it is bouncing the VWAP.

Still trying to determine if traders play hard and fast to their rules or violate them on occasion such as I did by not selling at my 1.5:1 - 2:1 RR, even though technically I didn't violate this rule since that is just a minimum risk/reward and I can choose to push it further out. Reminds me of this clip from City of God when it comes to making exceptions to the rules.

 

[Bugsy]

Well I made my first profit today, but at a price. Everything was moving so quickly I panicked and sold at just above a 1:1 risk reward rather than the 1.5:1 to 2:1 R/R I should have. As you can see in the time stamps at the bottom right of the image, where I bought and sold the positions, everything happened within minutes around 15 minutes after opening bell.

I panicked trying to find a good entry just above VWAP when it returned as I wasn't sure how long it would stay there for, and wasn't sure if it would bounce again on the next candle. I got in at $45.34. Then as it began pushing up I quickly tried to come up with a reasonable stop price just below VWAP but also safe enough outside of short term market noise. I settled just under a round dollar amount at $44.93 which would be a .9% loss if I stopped out.

While it was on the candle I sold my first half position on I saw it was bumping a resistance line it had failed on several candles already and quickly came up with a figure that yielded 1% in my mind and set it at $45.80, just above a 1% profit. I quickly moved the stop on my second half position up to my entry price. As soon as I'd done this I noticed the candle bumping that resistance again, panicked, and just sold the other half position as well. Had I been a bit more cool, calm, and collective I could have set my price to my r/r rule set of 1.5:1 and I'd have hit the price just above $46 and then could have sold my second half position right at 2:1.

I did peek ahead, to see how prices progressed, which I shouldn't do, but I did and saw I'd have stopped out later had I not sold then. Made a sell out profit. At this rate I'll go bankrupt in less time