January Trading Journals

I start small because I don't want to go red (FEAR) early and play more conservatively and then later get hurt being whipsawed. I know I shouldn't do this, that's why adding to this thread is a help by putting my thoughts on 'paper' and receiving your feedback. I understand that I shouldn't vary my trade size much.

It goes to what I said about feeling good about your last trade (GREED) and hence feeling you've got the dog by the tail today when in actuality, each trade is independent of each other. If your red for the month and all of a sudden you start to think, OK, today's the day I can make up some of my losses. Then you start to chase and jump in the homebuilders and they all drop as if they all choked on a pretzel at once.

Mark Cook says 'Got to get smaller'.

I've been thinking on ways to do that and I'll let you know how it goes.
 
When I walked into the office and saw futures down as much as it did, I thought it would be a huge trading day as far as opportunities are concerned.

And instead of go immediately to my bread and butter game, I experimented with the open strategy I wrote about last night, afterall two of my friends at work are doing it every day and never had any problems with it, and I tried pretty much the same stocks.

What an awful way to start the second half of the month, this was a game that I wanted very, very badly, for just $300 would have put me in the black for 2002. It was like practicing new moves in the NBA play-off's, the way I traded the open. I was taken out of my comfort zone immediately and never recovered from there.

19700 shares each way on 8 of 21 shooting, -244 before commissions, -769 after, 2 bullets. My entire team is up and I blew this game. This was such an important game and I didn't have confidence in my own style.

My focus is not there, and I must regain it. There is absolutely nothing wrong with the way I trade the open, I can't put up 15 open orders and play them "on the fly". I have to see where the stock opens, the opening print, then go from there. Comfort, comfort, comfort, without comfort you can not trade profitably.

I gave away a huge game today, and I must win tommorrow's game and cut this thing back down to three digits.

Pre-Market: Futures down big, and after the kind of consolidation we had I expected a big sell-off day, the kind of day I thought I would do ok on with a lot of open shorts . . .

9:30: Got the big sell-off but I was filled on CRA and HDI. CRA squeezed 30 cents immediately and I covered for a loss which happened to be the intraday high. HDI hit me for a quarter as it ripped in my face. Actually went long in MO hoping the TOB index would go up but the daily was a classic Tony Oz reversal and I gave up 15 cents there. Bad defense, bad entry, bad everything, I was very frustrated.

9:45: I cancelled rest of my orders immediately and went with a LEN bullet (my bread butter stock last a few games). Shorted and got a quarter out at 47.25, covered half and sold more into a squeeze, home builders went up strong and hard and I couldn't believe how hard LEN ran up when the futures tanked hard, I went from +$100 to -$400 in the stock as I tried many times to short him but he was so strong, every time he broke down he squeezed back up and I really got frustrated. Got DNA on BTK move for a quarter. TRW had a horrific daily and I went short but he chopped and even rallied before tanked it at the end of the day. LEN/TRW were my bullets of the day and they combined for my top two losers.

9:55: Hoped for a squeeze and this was just a bad shot, went long CCU and lost 17 cents. Did catch WFT in the energy squeeze and got 30 cents out of that. Flat in EOG/DO/VTS/SGY after commissions.

10:30: By now I already took a heavy hit in LEN and had to go long in home builders as now the rally felt real (painful). Got a quarter in MDC and broke even on DHI/SPF.

1:10: WLL just gapped up and this market was so weak, golden bullet opportunity but I was just out of it today, went long on a pullback and out for flat.

2:00: Energy pop and I lost money in it, tried a number of energy stocks and lost about $100 after commissions (no big deal but when you are trying to get back in the game it really hurted). Went long LM and made 10 cents. I definitely had a bearish biase but my weak natural short game coupled with two horrific bullets killed me.

3:30: Went long PCL (S&P 500 addition) and got 20 cents, didn't sell it at the bell in time (too small of a position for MOC) and got stuck in it. Given the final print was 3 million shares I figure the specialist may be short and I can't risk a gap-down which will ruin my open tommorrow, got out for a $35 fee on the instinet so made a cool $50 after commissions.

Tommorrow I must re-group and come out strong, today I shot myself in the foot and it was very very painful to get a serious set-back when I desperately needed a win.

Stick to what works when you are in a losing streak, keep the scope narrow, reduce the number of shots. Now is the time to survive and grind it out, not learning new tricks and cool strategies.
 
Originally posted by qwiktrade
the time to add new moves to your game is not when you are in a slump.. when you are in a slump you practive free throws and layups.. not a spinning, off-balance, one handed shot 3 feet out from the 3-point line..
hitman, youll get your mojo back.. go back to the basics and take some easy shots.. it will all come back to you.. dont worry..
More...

Originally posted by Hitman
First of all, we are not talking about a huge change here. It is merely, a warm up routine for the open. Chances are by 9:45 I will be out of those positions and I will go into whatever strategy I have.

Secondly, it is a huge mistake to not look for new strategies, you never know when your current strategy will stop working (for example the death of CEX killed a bread and butter sector for me, while I don't have to trade it everyday, on days that it does give you a lift it is very very helpful)....

And it is not that risky, I removed all stocks above $60 and with the liquidity of those stocks, it should not break my day. I am used to trading 4-6 positions at a time and with tight stops it can't really hurt me. If it doesn't bounce immediately I am out.
More...

Originally posted by Hitman
And instead of go immediately to my bread and butter game, I experimented with the open strategy I wrote about last night...

...19700 shares each way on 8 of 21 shooting, -244 before commissions, -769 after, 2 bullets. My entire team is up and I blew this game. This was such an important game and I didn't have confidence in my own style.

...My focus is not there, and I must regain it....

...Stick to what works when you are in a losing streak, keep the scope narrow, reduce the number of shots. Now is the time to survive and grind it out, not learning new tricks and cool strategies.
More...

Hitman..

my purpose in copying those old posts isnt to say "i told you so" but just to reinforce what im saying.. i havent read all of your journal but ive been following it for the last 5 months or so.. i dont think you have ever experienced a bad slump.. i have been through one.. i literally went through a period of months where everything i touched turned to crap.. and it cost me a huge amount of money to learn how to get out of it.. for me, my slump was caused by a combination of ignorance and a loss of perspective.. at first i lost because i didnt have a clear strategy that i could apply consistently and confidently.. but then i continued to lose because i had lost perspective.. when you have a 1000 dollar day, you feel great.. its a nice win and something to be proud of.. the problem is that when you come in the next day its very hard to get the same "feeling" of accomplishment from a 300 dollar day.. logically you know 300 dollars is alot of money.. logically most will agree that 300 dollars is not a bad days work.. but you and i arent wired logically.. for the most part, we feel and then we construct logic to support our emotions.. thats just how humans are.. this is quite a dillema for us because our emotions dont influence us to think "gee, i think ill flush this 300 dollars down the toilet".. it works in two more subtle ways.. the first way this works against us is by compelling us to find trades when really the setup that we normally trade is not present.. in other words, we become less selective about the setups we choose.. because of the inner desire to reproduce the feeling of winning, our mind masks the fact that certain elements of the setup are not present.. this leads to losses and frusteration.. then something else happens in our thinking.. and i think this is especially true if your self esteem is heavily influenced by what you are able to achieve, win, or produce.. i am definitly wired this way.. basically what happens is you find it difficult to focus on what you are doing.. you become prone to chasing rabbits, looking at what someone else is doing or daydreaming instead of concentrating on the trade at hand.. i think this is the minds way of avoiding responsibility for the outcome of trades that might damage the self image.. something of a self preservation instinct..

i also want to say that it took me a very long time to realize what was going on inside of me.. if someone had told me what i just told you i would have said "thats not my problem.. i just gotta figure out what im doing wrong..".. but ill tell you, i wish someone explained to me earlier before i lost so much money.. i was sabotaging myself and didnt know it.. only after reading some books on psychology and listening to some other traders talk about overcoming their struggles was i able to identify the real problem..

ive found that there are certain things that i can do to pull myself out of this.. first of all, you have to prepare yourself emotionally for a small win.. dont go into the day thinking about how much you are down.. dont think about making 1000 dollars.. you have to get humble and say i just want to come in and make 100 or 200 dollars.. its not enough just to tell yourself this.. you have to really mean it.. second, you have to force yourself to double check every setup to make sure that all criteria are present.. third, you have to force yourself to focus on what you are doing.. dont think about something new.. dont think about the weather.. dont think about what you will do after work.. force yourself to concentrate on what you are doing.. then you just go in and take the easiest trades you see.. the goal is to build up a string of small wins..

the reason you want a string of small wins is because its emotionally satisfying, even if it doesnt mean all that much p&l wise.. it will help you regain confidence for one, but the primary benefit is that your trading is no longer a threat to your self image, and you will stop sabotaging yourself..

that said.. i can honestly say that i still fall back into my old slump alot.. the thing is that now i can recognize it and correct it before it does serious damage to my account and my frame of mind.. today my P&L looks almost exactly like yours.. a big loss for me.. why? because of the reasons i just described.. but i know tomorrow will be fine, because i know how to get myself out of this.. when i figure out how to spot this cycle within myself before it occurs, ill be one happy trader..

anyway.. i hope this is in some way helpful.. good luck..

-qwik
 
Today was a tough day for me Hitman. Since I mostly sell stocks one would of thought it was a great day for us shorts but I got caught in a couple of squeezes myself. Sears destroyed me, I got squeezed out right before it collapsed. Oh well.
 
What I was extremely upset about was the fact that I actually had a small four games winning streak going coming into this game and I actually averaged $350 a day in that stretch and I was less than $300 away from seeing black for the first time in 2002.

Then I got fancy and tried something new and was smacked back down, hard. I gotta stop looking at other people's P&L until after the close. Sometimes it really puts a lot of mental pressure on me when everyone on my team is up a little bit, somehow I always forget the days I am up and others are down, and I always remember the days I am down and others are up. Maybe I have been too unforgiving of myself.

As far as taking a vacation when I desperately need a win is concerned, that is a luxury I don't have, the only way I know of breaking a slump is to shoot my way out of it.
 
Yes, the days with least volume is when I get everything right, off the open, very little losers and very little churning. I stop trading by 11AM and I spend the afternoon playing 100-200 share positions unless I see something really really good, as a matter of fact on some days I take off early (no longer an option with the team leader position).

Those were the days . . . Unfortunately lately it has been more like me facing a deficit at 11AM and have to claw and scratch my way back . . .

Before it was like icing on the cake, nowadays is more like cake in the face . . .
 
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