How I stopped making the same mistakes in 2010 and started to make more money

Day 2

Short OPEN -17
Short AIG +4

Had some improvements in my trading and some drawbacks.

As I was trading OPEN today, I was writing down my thoughts and it was like "out of body experience". I could totally see my old-self thinking "this stock went flat, most likely it'll go higher from here, it sure looks like that, maybe move stop to b/e" and then as I was typing it I told myself - "NO MORE, it's just a trade, and then it'll be another one, and another one, and so on. It doesn't really matter how this trade would work out as long as probabilities on my side over long term (which I believe is true). I have set of rules, I know my mistakes, I'll stick to my plan." I did stick to my exit rules on both stocks.

Once I had positions today I managed it very well. Both OPEN and AIG came back to my entry price and I didn't cover b/e. That's a HUGE improvement on my side. I was also good with exits, and wasn't looking at my p/l , just a chart and my exit target. Unfortunately both stocks didn’t reach my target but that's part of the trading, some work, some don't, I’m ok with that.

The "bad" today came from entries and position sizing. Apparently I have to work on that one also, just when I though I got it all covered.

I was shorting AIG several times and had a loss of about $900 until my last trade finally worked . Several entries were not according to my rules and position size was too big. My last entry was at 37.32 with 2K shares.

So back to Day 1 tomorrow for breaking my entry rules and back to excel spreadsheet.

Damn, this is hard.

-13 total
 

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Quote from BPtrader:

you did much much better than I did.

Just curious, how long have you been trading?
More...

About 5 years. I don't think it should take this long to develop good discipline, but it is what it is. I was always more concern with having positive expectancy system. But now I want to be consistent in self-discipline area also.
 
Quote from Ghost of Cutten:

Yes - don't look at your P&L. Don't look at it during the trading day, don't look at it after the close, don't look at it the morning after. Look at it at the end of the trading week only.

If there's a box on your screen with your P&L, turn it off. If you can't turn it off, put a bit of tape over the screen where it is, or get another broker with more customizable software.
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Thank you for your suggestion, I don't think I can not look at p/l for a week, but I'm getting better at it during the day. If nothing else works I might try to turn if off completely.
 
Quote from thinkfirst:

Damn, this is hard.
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Slow & steady TF


It is hard – probably the hardest thing someone can undertake – and have no doubt trading is more of a mind game than what most people think

Not giving you an out – just saying we all go thru it… or have gone thru it

I am rooting for you Sir – but it is one journey we must each travel alone


Never aim for trading perfection, always seek trading excellence


I have a saying - To make life easy, accept that it is hard... This holds for trading as well - imho


Good Trading Always

RN
 
Here is what I did (and still do) to overcome deviations from the plan:

I log both the system entries and exits and any manual overrides I may have done. This allows me to see how much the overrides cost and help me identify ways to improve my systems.

In general, overriding helps a little bit with respect to profit, but more important, it has helped me find system improvements.

When I feel strongly that I should override, i capture the reason for the override, code it up and test it against my data. More often than not, the override is a bad idea, but randomly I'll stumble onto a little tweak that is worthwhile.

For me, the continual improvement has been key to overcoming system deterioration.
 
Quote from Ghost of Cutten:

Yes - don't look at your P&L. Don't look at it during the trading day, don't look at it after the close, don't look at it the morning after. Look at it at the end of the trading week only.

If there's a box on your screen with your P&L, turn it off. If you can't turn it off, put a bit of tape over the screen where it is, or get another broker with more customizable software.
More...

+1

It's a well known trick but very important. ...and at the end of the week run a comparison between the P&L and how your played well (the process).
 
Hi TF,

Good work sticking with your plan and taking that last AIG trade. Obviously it made the difference for your day.

I think we were trading it near the same time based on what I recall in the chat. Last year I noticed a pretty consistent pattern with the degree of movement in relation to the daily MAs when searching for a retracement.

If you take a look at the 60MA 90MA and 200MA you will see that yesterday was "far" below all of them. My experience has been that if I try to fade a stock that has been beaten down that hard and shows a lot of strength that I need to be very careful and adjust my entries and exits. I raise the level of entry, spread between adding and I also lower the target amount as well as the number of shares total.

Someone in the chat was scalping it long and in hindsight it looks like if it would have been bought when it broke above yesterdays highs it would have been good timing based on looking at the past history. Although I think it was on my second time trading it (I had two series with it today) and I do not know how he ended up doing. (at the time he said he was scalping long I thinkit was near the high up to that point so he could have done real well but I don't know.

Now if I can figure out why I entered BIDU the second time I I might be able to actually do myself some good.

Best to you TF

Robert



Quote from thinkfirst:

Day 2

Short OPEN -17
Short AIG +4

Had some improvements in my trading and some drawbacks.

As I was trading OPEN today, I was writing down my thoughts and it was like "out of body experience". I could totally see my old-self thinking "this stock went flat, most likely it'll go higher from here, it sure looks like that, maybe move stop to b/e" and then as I was typing it I told myself - "NO MORE, it's just a trade, and then it'll be another one, and another one, and so on. It doesn't really matter how this trade would work out as long as probabilities on my side over long term (which I believe is true). I have set of rules, I know my mistakes, I'll stick to my plan." I did stick to my exit rules on both stocks.

Once I had positions today I managed it very well. Both OPEN and AIG came back to my entry price and I didn't cover b/e. That's a HUGE improvement on my side. I was also good with exits, and wasn't looking at my p/l , just a chart and my exit target. Unfortunately both stocks didn’t reach my target but that's part of the trading, some work, some don't, I’m ok with that.

The "bad" today came from entries and position sizing. Apparently I have to work on that one also, just when I though I got it all covered.

I was shorting AIG several times and had a loss of about $900 until my last trade finally worked . Several entries were not according to my rules and position size was too big. My last entry was at 37.32 with 2K shares.

So back to Day 1 tomorrow for breaking my entry rules and back to excel spreadsheet.

Damn, this is hard.

-13 total
More...
 
Short PM +165
Long MAS +240
Long ASF -29
Long SWM -14906

-14,531


This is by far my worse trading day ever, but somehow I'm still breathing and still positive. Did I break my rules today, oh yeah, big time. Deep down I feel like this is exactly what I need to get it wired into my head "trade according to rules, not some of them but all of them". Time will tell whether because of this SWM trade I'll be a better trader or doing something else for a living. I'll be writing about it here.
 

Attachments

Quote from thinkfirst:

Short PM +165
Long MAS +240
Long ASF -29
Long SWM -14906

-14,531


This is by far my worse trading day ever, but somehow I'm still breathing and still positive. Did I break my rules today, oh yeah, big time. Deep down I feel like this is exactly what I need to get it wired into my head "trade according to rules, not some of them but all of them". Time will tell whether because of this SWM trade I'll be a better trader or doing something else for a living. I'll be writing about it here.
More...

Ouch. It hurt just reading your post.

Dial it back. Don't give up. But MAKE SURE YOU LEARN A LESSON FROM THIS EXPERIENCE.

Without knowing ANYTHING about your trading style. The above numbers just don't add up. You have three trades that are +/- three figures or less. And then you have a loser that is 5 FIGURES!?!?!?

That should NEVER happen.

You don't need me to beat you up. You will do that all by yourself. Take tomorrow off. Enjoy the 4 day weekend. Spend Saturday or Sunday morning reassessing what you're doing. And put together a plan. A real plan. Write it down.

Best of luck.

Sean
 
Looking at SWM, it went down due to poor earnings. Then it went down some more due to poor guidance. For those that don't understand, technical analysis is the study of price. Price is a reflection of FA and can be impacted by reports. So what you should have done before trading a stock based on TA is to see were there any reports released or being released. If so, the best option is to not trade the stock during the release of these reports unless you are gambling based on buying call or put options which at least will give you a hard stop that the market can not break.
 
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