ElecEquity's Active Trading Journal

Major Economic News:
  • Existing Home Sales tomorrow
Finished up about +$625 net today...missed a lot of signals..still virtually impossible to hit all of the signals that I get manually..in the process of automating a portion of my trading. Meanwhile, I'll still be 100% manual in my discretionary trading until otherwise mentioned.

- Traded HD very poorly at the open...should've murdered that trade..but I had my biggest loser of the day in that fade and it also diverted my attention from my primary strategy and it caused me to miss a few trades that I would've made money on. Either way, I should've traded HD better as a fade play.

- Still trading pretty small size and focusing on consistently holding my winners according to my exit rules (cutting losers is not a problem for me) --- I've recently noticed a few things in my big winners that I think will help me to protect more of my profits in those trades by watching RSI levels at extremes in conjunction with S/R. I've had RSI on all of my charts for years, but I've used it in the context of trend trading, only for RTM trades as a sort of alert (btw -- deciding to fade a stock b/c the RSI is at extreme levels intraday or overnight is a bad idea and when you're wrong you will be very wrong...I learned this from experience many times..just my .02 on that)

- Regarding my size for trend trading, I'm going to take it up just a little bit tomorrow with an additional few hundred shares b/c I've been doing a pretty decent job focusing on the process of my trades and I've been pretty consistent P&L-wise. This strategy is very liquid and size-wise I'm barely even tipping my toe in the water -- so if I'm right about this strategy's potential efficacy (still in early stages), there should be a lot of growth in the future only to be limited by any trepidation on my part to really press the gas -- which is part of the reason I'm using this journal to be held accountable for any such act of succumbing to fear of much larger size in a valid strategy.

- Today was a huge down day...and the largest down day since 8.11.10..long time. As anyone knows that's followed this journal until now, I've been a little skeptical/curious about how this approach will perform during pullbacks or bear markets. I had to do a little searching for shorts on my own, but I had a lot of valid short signals (and long signals today near the open) today via my filters which, is encouraging. Fingers still crossed.

- There's a lot of earnings to play tomorrow so I'll wait to see what beat big and missed big and guided much higher/lower than expectations besides HPQ which is already on my radar. I traded it like a madman post-market today (lost 700 than made 850 back...traded it very poorly)

Good luck tomorrow.

"A pessimist is one who makes difficulties of his opportunities and an optimist is one who makes opportunities of his difficulties." ~Harry Truman
 
Today's results: -Two hundred in something

Today I traded well and had a few computer glitches early on but I still managed to have some nice trades. I finished pretty much flat on the day---BUT after looking at some of the late day signals, I slacked off quite a bit in the last hour and missed a few signals that could've made this at least a $1k day. I really have no excuse for this.

I've done really well in taking my signals and confronting many of the fears of trading this new strategy. Seeing and catching late-day signals is easy...but I have to remain vigilant. Today, I became complacent towards the last hour or so of the day and I was a little drained. I'm not a huge coffee drinker, but it wouldn't be a bad idea to get up and have a cup when I'm feeling this way.

I was going to wait until the beginning of next week to raise size, but since it's the end of the month and b/c I've been very consistent with my process/results, I'm going to begin tomorrow. I expect losers to be a bit larger and the same for winners. I can't believe it's already March.

Here we go. Good trading to all.
 
Quote from lescor:

IMO, the number one trait that makes a good trader a great trader is the ability to let go of a mental attachment to money. It is very hard to do, and takes time. You have to be able to make rational, almost mechanical decisions based on what is the right way to execute your plan. Proper risk control relative to your account size is part of that plan, but you have to be able to think without letting where your p/l is affect you.

Everyone will have a dollar level, good and bad, for a trade or for the day, that is going to set them over the edge where they start to make poor decisions. It might be 50 dollars, it might be 50,000, but it's a curve that you try to work your way up as you grow your account. Many traders can achieve a certain level of success where they seem to hit a wall and either plateau or fall back and start the climb over again.

Another way to think about it is the range of what constitutes 'noise' for your p/l. When you're within that range, you really don't care. You'd call it an unmemorable or wasted day. Great traders have the ability to continually expand that range and not let the increasing dollar amounts affect their decision making.
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A great post....result of lurking on ET. It really hits home for me and is further confirmation that this is my #1 hurdle and has been my #1 hurdle even after having a great year in 2008 (who didn't?). Even when the people around tell me that I'm good BUT I've been risk-averse. I tried to overcome this issue in 2009 after having banked some nice coin, but being relatively new to the business, I traded too large of size and my RTM approach was inappropriate during 2009 and resulted in a large hole (I dug out in a few months). Then dug my largest hole ever in 2010 and subsequently dug out in a few months and completely out and back to the black on the day of the Flash Crash. Confronting this mindset is my primary goal of maintaining this journal.

Automation has certainly helped and I'm working on automating as many of my ideas that I can, but even still, the obstacle of considering the money in a trade is something that I must overcome to make the change from good to great.
 
Quote from EricP:


....One additional thought that I'd add to describe my personal trading... I view my trading as a casino, where I take on the role of the house. Look at it as the roulette wheel. Every gambler that walks up to my roulette wheel is making a 'trade' with me. Every chip that they put on the felt, is a bet where I know that the odds are in my favor. The only way that I can lose, in the long run, is if I take a bet that is larger than I can afford to lose (bad money management). That's why I have table limits at my roulette wheel ("If you can't afford to lose, then you can't afford to play"). So, I view my trading as taking thousands upon thousands of trades, and the individual results of those trades are meaningless to me. Some times, the drunk gambler will put $500 on the lucky number 7, and hit that number, costing me $18k. I just smile, wish him good luck, and let him continue to play, knowing that every bet he makes will net me a profit, on average. Anyway, that's my mindset for my trading... Don't get too concerned with the little picture, focus on doing your job (following your strategy) and the big picture will take care of itself.....
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Another great post. Although I've had one great year and two mediocre years during my career, (doesn't include the first year when I was barely breakeven) I never looked at trading as an odds game -- I always focused on the little picture (the individual trade) and never realized that I should focus on the big picture even while looking at the big picture. Over my Christmas vacation I did some reading regarding the mindset of great traders and how they view this as an odds game. In the past, I've never internalized that mental model.

The irony is, I've come to know a number of moderately successful to very successful traders and I've never, ever had this conversation with any one of them. Although in hindsight, it's clear that this is/was their mental model. I am focusing everyday to internalize this model.
 
Friday's take: -$2827.91

I raised my size a bit on Friday and I traded the same for the most part. The worst thing about the beginning of the day was that I ended up getting a disproportionate amount of losers early on than usual and I knew I was having a rough day without seeing my P&L. I pulled back on taking trades and of course as is usually the case, I ended up missing out on trades at the end of the day that could've either made my day less worse or possibly brought me back to positive.

My cents/share in losers was the same as it has been. So on Monday, I'll be doing the same thing I did on Friday...except I won't stop taking signals. In a few past posts, I talked about partially automating this new strategy. Instead, I've decided to forgo that route and completely blackbox this approach (easier said than done). I currently have two profitable intraday black boxes running and if I can black box this one as well it will free up my attention to focus only on swing trades, ideal intraday breakouts, and RTM stuff (especially if the market really breaks down here).

Good trading everyone.
 
Quote from gnome:

I'll save you some time and tell you what I know right here. It's not much. After all my years of trials, it boils down to "Take a shot. Use a stop."

1. You have to figure out "where" on the charts or "when" on the apparent sentiment that you can "risk a little to possibly make a lot". (One of my pet trades is on the 50 or 200 day averages... when they have positive slope and tested from above, expect them to be support. When negative slope and tested from below, expect resistance.... when the slope is horizontal and prices move across them freely, the MAs have no significance at all.)

2. Scalping is WAY to difficult, so go for swing plays.

There is nothing any of us can do to assure success. Also nothing we can do to guarantee we won't blow up. YEARS of success can be wiped out with one major error in judgement. (Trading lore is rife with examples.) The only thing we can do for certain is eliminate the possibility of a huge loss on one trade.

It's always been my philosophy... "If they are to get MY money, it's going to be like being nibbled to death by ducks."

Good luck.
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Another great post.
 
Quote from gnome:
I don't trade that way. I look for when the ST move might logically be done... like rally up to resistance, overbought oscillator or something. Sometimes the market turns down "early" and I don't get a shot at selling into my target. Then I have to just guess.
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Quote from gnome:
The only goals a trader should have:
a. Get better at identifying trade setups.
b. Get better at playing setups.
c. Exercise proper stop discipline.

Anything else is just mental masturbation.
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Quote from gnome:
"stops are arbitrary". Tight is good sometimes; loose is good sometimes. There is no correct answer.

A partial solution is to play "bigger setups".
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Quote from gnome:
Whenever there is a gap, there is a "gap play". The basic gap plays:

1. Gap-n-Go
2. Gap, Fill, Reverse
3. Gap, Half-fill, Reverse
4. Gap Up, Test low of opening bar, Reverse Up (or Gap Down, test high of opening bar, Reverse Down)... variations of Gap-n-Go
5. Gap, Continue a bit, then Crap
6. Gap-n-Crap

We never know for sure which it is... need to "play it by ear". It helps to have an idea when a Gap-n-Crap or Gap-n-Go are more likely depending upon where price is on the chart and/or news.
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Quote from gnome:
Stops... one of my favorite topics.
I'm a lonnnng time trader, so FWIW:

1. Wherever you put the stop, it's arbitrary. So either (1) put it in a logical place as per the charts, or (2) keep it small and expect to be stopped-out a lot... but at least you won't get nailed for one big hit, and you will capitalize on the trades that immediately run in your favor.

3. Your trading career will mostly be defined by the "losses you didn't take".

Just think, if the dipstick running Amaranth had used a stop, he'd still be in business today.
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Great insights.
 
Quote from gnome:
The market will give you every opportunity to turn a potential big gain into a small one... coping with that is always an ordeal.
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Quote from gnome:
.....I don't think in terms of "expecting an up move to short"... but rather, either (1) the up move has hit (or is near) a resistance point to short... in an effort to nail the swing top, or (b) it looks like the market has reversed enough down that the top is past.

You have to risk "X points" that one of those is correct.
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Last of the ET Greats insights for now. Good stuff.
 
Finished realized +$1547.33 (still open $119.00)

Good day. Decent finish to the month. Automated trading was good this month. Looking forward to tomorrow/next month after all that I've learned this month psychologically and strategically. Maybe the late Feb volatility will continue into March -- QE2 probably isn't going to end early.

May post a few of my daily process goals for next month later on. If not, good trading to all.
 
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