Discretionary Equity Trading Journal

E

EquitiesTrader

I am starting this journal for myself to help track my trading, thought processes, and key areas on which I am working to better myself as a trader. Hopefully, some of you ET members may find this useful, as I welcome all interesting trading related feedback and discussions.

As for a quick overview of my style, I am a pure 100% equities discretionary day trader. A dying breed it seems, but the markets still give great opportunities every day for my style. The key areas for success with my trading style, and the areas which I am always striving to improve on are, only being involved with stocks that are currently "in play", being disciplined to wait for the risk/return setups that make sense (no chasing or revenge trading), sticking with my trading plan in order to capture larger gains rather than taking profit prematurely.

All of these areas are what I am trying to keep in mind each trading day as I battle myself and the markets. As a 100% discretionary day trader, the battle with myself is even more important than the battle with the market. The battle is against my emotions, opinions, habits, etc. as I battle to continually step back and objectively view the market, while rationally and unemotionally executing.
 
Today started out very rough, and I almost hit my max loss limit for the day. However, I caught a nice move in GPRO in the afternoon that made my day. I got whipsawed a bit in GPRO in the morning. I also got squeezed for small losses on two other shorts that squeezed me when the market ripped in the morning. Most of my stocks were not really trending today, so I did a nice job of staying away from stocks that would have chopped me up. I have room on my trading screens for about 9 stocks. Usually, at least one of these is "in play" at any given time, which seems to help me resist taking boredom trades when nothing is going on.

For a young volatile IPO stock like GPRO, I should have taken profits when I had them in the morning and then reinitiated positions as the opportunity presented. However, I was trying to catch the big move and ended up getting rocked twice. I knew the stock was strong overall, but I was trying to force things too early and not trading the way the stock was trading in that moment, which reversed from strong to weak to strong to weak, etc. However, I did reinitiate a good position in the afternoon and caught the big move with size to make for a nice day.

~$1,000 net day
 
EquitiesTrader said:
Today started out very rough, and I almost hit my max loss limit for the day. However, I caught a nice move in GPRO in the afternoon that made my day. I got whipsawed a bit in GPRO in the morning. I also got squeezed for small losses on two other shorts that squeezed me when the market ripped in the morning. Most of my stocks were not really trending today, so I did a nice job of staying away from stocks that would have chopped me up. I have room on my trading screens for about 9 stocks. Usually, at least one of these is "in play" at any given time, which seems to help me resist taking boredom trades when nothing is going on.

For a young volatile IPO stock like GPRO, I should have taken profits when I had them in the morning and then reinitiated positions as the opportunity presented. However, I was trying to catch the big move and ended up getting rocked twice. I knew the stock was strong overall, but I was trying to force things too early and not trading the way the stock was trading in that moment, which reversed from strong to weak to strong to weak, etc. However, I did reinitiate a good position in the afternoon and caught the big move with size to make for a nice day.

~$1,000 net day
More...

What is your max loss limit for the day?
 
I try to keep my max loss limit around $1000. It should be rare occurrence that I hit it, but trading a volatile IPO stock with too much size almost got me there in a hurry. $1000 is my max loss, since that is a number that will hurt my week, but still enable me to make it back within 2 average days of trading, enabling me to still pull out a positive week. My goal is consistency.
 
Hi ET,

Do you have a fixed list of stocks that you trade every day, or you scan for new stocks every day?

If you scan what are you looking for?

Good trading!
 
I try to trade stocks that I think will have significant moves that day. Therefore, I look for stocks that have a catalyst (news, etc.), or stocks that have been moving well, which increase the possibility of an oversized move. There is really nothing specific that i look for other than asking myself, "Is this news significant?" During slow news days like today, most of my stocks were carried over from the day(s) prior. Aside from news, I want a stock that is liquid enough to get into and out of as needed.
 
I use a combination of resources, including general sleuthing. Free resources can be anything from yahoo finance earning calendars, to Google News. MMarketwatch tends to be a good free news compiler. Most brokers have news data feeds that scroll, which can also give ideas. Looking at premarket movers is an other source. Sometimes a news article on one premarket mover will also mention another stock that may be in play. There really are no shortcuts, and no one source. It is more about putting in the effort and sometimes being creative to find ideas. I generally like to watch whatever stocks I am trading the whole day, so I tend not to reload my screens mid day. I just feel more comfortable if I have seen every print and developed a feel for how a stock is trading than just throwing it up on my screen mid day, because it is moving. Some people do opposite. Whatever works for you.
 
Was up all night with a sick kid, who I think gave it to me, because I feel like crap today. I only traded a little this morning, but am calling it a day to be with my kid, rest up myself, and run some errands. Trading is such intense work, that I don't like risking my capital when I am not 100% myself.

Today was also a whipsaw morning for me. I had a great entry on NFLX, but got stopped out twice in those crazy price swings. That price action was the craziest I have seen since the Nasdaq had issues last year with their bid/ask quotes. It went from 460+ to 456 and back on a few prints and did it twice. I made some of it back on its continuation move, but I had difficulty bidding for shares and didn't want to pay a 0.50 spread since that would have thrown off my risk/reward too much. It ended up being too small size. If I was feeling better, and still planning on trading for the day, I would hold this further. I had issues getting fills in a few other stocks today and didn't want to pay a spread that was too large for my comfort, so I missed out on some gains. Preserving capital though and only entering at prices that make sense to me from a risk/return perspective is more important.

I also made a nice trade on GPRO going long after it bottomed and before it traded up through the high. I probably would have bought this back as well, and held for a day long trend move if I didn't need to leave.

After being down again right to my max loss, and clawing back to positive for the day for the second day in a row, I am going to stop here and just be happy to be in the black.

About $250 net
 
Looking at the stocks I was trading, I am kicking myself that I stopped trading and didn't just put in stops and let NFLX and GPRO trend, because they both broke out exactly the way I thought that they would. It would have been the difference between barely making a profit (~$250) to making $2000+. Having a stock on my screen that make the kind of moves NFLX and GPRO made today, I really need to fully capitalize on it. Ultimately, I will have negative days, and I need maximize my outsized gains on days like today when it is easy money on the table.

I was really not feeling well today, but looking back I still could have just put in stops and let my positions trade.
 
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