January Trading Journals

The week ended on yet another loss as I simply could not break that cold spell. The good news is that I definitely see the value of a 30 minute chart as additional confirmation to filter out approximately half of the trades.

The lone good news is the market may finally force me to greatly cut down the quantity of my shots and improve the quality, and I will eventually reach the level of highly concentrated shots that Tony was talking about.

The firm is most definitely struggling, the way I see it, half of the traders that are here now won't last through this year. This year make 2001 feel like a walk in the park. I have no idea where my desk will be, a lot of team leaders are down big time this year.

14900 shares on 7 of 17 shooting, +249 before commissions, -138 after, 1 bullet. Gave back pretty much everything I made last week and facing a $1600 deficit.

My profit : commission ratio is too low, I did notice that people with a low score in 2001 are suffering quite a bit more than with with higher scores, eventually that number does have to go up to ensure long term survival. Focusing a little more on the quality of my shots is the first step. Spending a lot more time on 30 minute and daily charts every night is a second step. An alternative would be to trade a basket of stocks every day which is still the most consistent way to make money but I have never ever found a bunch of stocks that I like so much that I can trade every day.

Pre-Market: Oils price up substantially.

9:30: Shorted HDI off the open and covered for flat as the stock tanked hard (positive earnings but stock ran up too much last a few days and the earnings was not THAT impressive, broad market was weak and I figured it was worth a shot). Tried NE and DO on OSX strength, bulleted HP when I thought it was a gap and trap on OSX, and ended up lost $100 across all 3 after bullet cost and commissions. I am getting no production whatsoever from my bread and butter sector, and today the home builders didn't do anything at all. Shorted CRA off the open and got 40 cents. Tried to go long on DNA on BTK squeeze and got out flat.

10:00: XAL move and I went long AMR, very annoying specialist, he had a big, moving offer stepping up and down which literally killed my tape game, and he didn't do much in the end and I broke even in him. Tried bottom pick DOX/NSM and stopped out for 5-10 cents losses. Shorted TDW on OSX sell-off and stopped out on intraday high which was actually a resistance level from 2 days ago.

11:00: Went long in PX on chemical strength and got 20 cents, got just 10 cents out of FD on RLX pop. Tried EMN and stopped out for flat. Got TYC 10 cents above what was a 5 million print that actually marked the stock's intraday low. Stopped out for flat, oh well that was a crap shot anyway.

2:00: Went long ACF (solid looking 30 minute double bottom) and got a quarter out after quite a few tries and it all ended up in commissions. I actually went short when he failed to break that half but flipped when I saw the future rip in the end. Tried to short ABI/CRA on BTK sell-off on news and stopped out for flat.

Hopefully next week will be better, 8 games left, I must avoid a down month which hasn't happened since May 2001 . . .
 
Hitman,

Im glad to see you are using the bigger time frames. It will open up a new world to you and help you with your trading. I'd like to give you a quick forward looking idea of how I use them. Attatched is a chart of the Utility Index. The bear flag on the 120 and 60 minute charts are fairly obvious, so what I will be looking for in the sector are stocks showing relative weakness and topping patterns. I will look for this on the smaller time frames, thus keeping a smaller stop...but the potential I will have is what is being offered in the bigger timeframe.
 

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Brandon:

Since I never do overnight (well what hell I will try 100 shares if I really really like something, until I become proficient anyway), would you say it is a good idea to place the most emphasis on hourly charts? (And use the daily chart as additional confirmation but base the primary entry and exit criterias upon the hourly charts?)

The reason I completely stopped looking through 200 daily charts a night is because I have never ever been able to find something that works for me consistently off the daily's for intraday trading.

I just did one session with hourly charts and I find it to be, for the most part, noise free, and it seems to be far more useful than daily's.

The stocks are pretty much stocks I already trade so hopefully this will give me a much smaller active watch list and stop me from shooting everything that moves . . .

I did realize that as powerful as tape reading is, the overall trend is still important when you are trying to get a better risk and reward level. And I don't think I can survive this year if I don't address the flaws in my game. I spread myself out too thinly as far as number of positions is concerned and when the market is as choppy as it is there is just no way I can get any decent shooting percentage as I am exposed to too many sectors. Reacting to a stock on an index move just doesn't cut it in this market as everyone is trying to take those 20 cents profits when a stock moves.

And yes, Brandon was absolutely right when he says that I buy into a lot of what looked like perfect breakout's for the day but really consolidation moves stucking in a multiple day range (I actually do look at yesterday's high's and low's, but nowadays a consolidation can last 3-4 days). It is impossible to get quality winners with those plays. When the market had momentum run and gun worked great as those consolidation moves were big enough to make a serious profit off, when the market is narrow and choppy I have to play stuff that trends on a hourly chart as I need to take less shots not more.
 
I can't remember the last time I held overnight. I'm too tired to type a lot right now..but the idea I use is simply that a trade and an execution are not the same thing to me. I will try to find my trades on the Daily, 120, 60 and 30 minute chart, then use the 5's and 2's for short term trades in that direction. Hope that makes sense. If not let me know and I will try to be more clear.

Brandon
 
Can I throw my 2 cents in?
I trade overnites. Ten plus years. First I like to state the last 4 trading days have been tough for overnites. But from experience I know the harder it is to make money trading my system ,like the last 4 days,the other side of that is coming . Usually sooner rather than later. Whether its a 1 or 2 day stretch or more ,I know trading is going to get better.Just like when I'm in a zone and making good profits everyday ,I know the market isn't that easy and it will take some back.That's what is happening now. My biggest fear is liquidity and lack of players.......without those ingredients its very difficult for me. I tend to trade sectors when I pick my stocks. Since you tend to concentrate also on sectors I think this might help you. First, look at daily charts on the indexs for sectors you trade(I look at them all),use what ever overbought/oversold indicators you like(stoc.,macd are the ones I like).Plus a moving avg. is helpful to go by....5....8....20 day is good.Right now most sectors are in a down trend but some are getting close to over sold.Knowing the trend is down on a daily basis I will trade that trend ........so when the end of the day market tells me to go short I will be more aggressive because the trend is with me...now THURS. market was strong into the close and lots of green were showing on my screen but I didn't go long aggressively because I knew the daily trend was down.BTW......I use 60 min. charts for stock selection at the end of the day....the stocks that nite all met my criteria for going long but I did less than my normal size because of the bigger picture. And wouldn't you know it yesterday the market gapped down and I never had a chance with my longs. I think its very important to know the daily trend of all the major avgs. and sectors. From their you find individual stocks that you like and play those with the trend ....use 30 min. and 5 min. charts to pick your entries and knowing the daily trend should influence your size and profit targets.Their is so much more than what I posted but bottom line is,just when you think you won't make money anymore trading you will have a big day or a nice winning streak.As long as you are there everyday and stay with what you know its just a matter of time.
 
I was re-reading "Market Wizards" and "The New Market Wizards" about two months ago. As you know, most of the people in there are futures/commodities traders - but what you may not know is that there is a great similarity between the "Great Bull" market in equities and Commodities market of the 1970's. Most of the people interviewed in the Wizards got their start in the 70's when everyone was becoming a professional commodities trader. The difference between them and every-one though is that they made it. Through out each of the books there are numerous comments made about the difference in behavior of a market dominated by amatures vs. one dominated by professionals and the adjustments that need to be made. It might provide some useful insights to anyone having trouble now as many of the "semi-professionals" are being tossed out.
 
Hitman--It seems to me throughout this journal several good traders have offered(taken the time) to provide you with good solid advice. Yet you don't hear a thing. You basically ignore them and continue along in your own personal hell- which you have masterfully created. I don't know why people respond to this journal-you don't listen man. You think you have all the answers.. you don't- and your numbers suffer. I've said this before-I'll say it again--Take the pressure off-you are in a pressure cooker--wound up SO TIGHT trying to prove greatness everyday. I was pleased to see you responding to some of Brandon's advice last few posts. Again- I see it all as a problem of self-examination--find something-some method- to cool you out.
 
Originally posted by Brandonf
It might provide some useful insights to anyone having trouble now as many of the "semi-professionals" are being tossed out.
More...

Well said, Brandon....

Yup... the last year or so has been brutal... in addition to standard discipline, trade selectivity is paramount... I know of several traders making $500,000 during the bull who didn't even pull in 6 figures last year... there's your historical perspective for you >> same traders, 20% of their bull market net profits... God help the newbies, but its a great training environment for the better times, if newer players trade small and VERY carefully... the shotgun approach just ain't gonna work...

Spray painting your trades worked in the bull market, but not in these times... its only good for the broker, who is smiling all the way to his bank with those juicey commissions from the 'overtraders'... trade small, trade carefully, and be selective... be a cheetah waiting patiently for a lame baby deer.

Just my 2 cents,
Candle
 
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