Journal to get some HELP

[quotetrader]

Hello Everyone

Since my last posted trade I've made quite a few adjustments based on feedback from the forum and absorbing comments and tecniques I've seen here.

EliteTrader has been a big help to me- thank you for your comments

So that last FAS trade I posted was the last time I did a trade on my "old" system

I've since refined that technique into a "new" system that is based on price action, overbought/sold, support resistance, trendlines, being aware of whats happening in the stock from multiple timeframes, etc.

The new system has completely incorporated STOPS, which was lacking in my old method and was causing me to lose alot of money- between bad entries that went red fast, and turning winners into losers over time due to lack of stoppage.

I took a few days to study some setups, run some tests, and backtest some entries and stop settings.

I then ran a couple low-share-lot test trades to get a feel of how trailing stops work at TDAmeritrade, and how Quotetracker handles them.

These test trades also allowed me to see in realtime how easily I'd get shaken out of a trade using a 2% stop vs a 3%, etc.

I just bought a few shares and figured I'd eat the stop and fees just to get the tactile experience before trying it for real.. it was worth it

So after the test trades, I took it to the street today and had a succesful day.. charts and details will be posted shortly.


Today's P/L: +361.95 (341 after fees)

 

[quotetrader]

Here are the charts and details:

I have now added Full Stochastics as an indicator, switched to trading mainly off a 3 Minute chart, rather than a 1-minute.

I still used the 1-minute chart to get a zoomed-in view of what was happening as I prepared for entry/exit.

My Bias for the morning:

After yesterday's sell off under 800 and then boomerang rally back above, I figured that was a sign of strength that the 800 level couldnt be taken down, and figured that the SP500 would have up day.

The futures were confirming this and pointed to a higher open.

I also figured that it would gap up, and as is often the case, trade lower until it reached yesterdays close or thereabouts, and trend from there.

So it gaps up and I'm trying to determine a morning range so I can detect which way its breaking.

You can see the aqua blue lines on my chart- these are the hi/lo range lines I drew early on.

The tighter range in the earliest hours was broken to the downside- since I was figuring SP500 would trade higher today, this, along with the oversold indication on the Stochastics, made we figure it would do the ol' "trade to where we were" thing and then the real trend would start from where we left off yesterday.

So I waited to see if there would be some support at yest's closing level- and there was.

It also happened to coincide with the stochastics showing/nearing oversold
so things seemed to be lining up.

I got ready for a bounce, and put a line under the lowest low so far, and watched the pricing from there. This low was around 10:12am

My plan was to just enter the trade using a market order and a 3% stop (which I now realize is way too much for an entry like this- I should hand-enter a tight stop just below my suspected level of support)

I saw the stochastics bend up and start to cross, and got a big green candle... I jumped the gun a little bit and jumped in- figuring I had a trailing stop in place.

Entered SSO (2x long SP500 etf) at 20.95 / 10:18am

Turns out my support level was right, but not my entry timing.. it did the 5-6 candle jump and pullback before setting in a slightly higher low and then taking off.

Truth is, If I had waited for the second big green candle, after the testing of the lowest low, I'd probably have gotten filled around the same level.. the better thing to do was try and get filled as it pulled back to re-test the low.. but of course then you are nervous it will break it.. thus the tight stop.

 

[quotetrader]

SSO moves up nicely from my entry and trades along in a tight uptrending range

This trade was a 50/50 trade for me:

Half serious and half "test"

I wanted to see how long the 3% stop would keep me in the trend

so I actually walked away for awhile and even went back to bed for a bit (had been up all night) and got some sleep

occasionally checking the price of SS0 from my cell phone (real time quotes)

I'd keep calculating where my stop would have moved up to and was noting where SSO would have to go to trigger it.

Looked like it was pretty far away from it, so I snoozed a bit.


I got up around noon, and SSO had been trending along nicely to the upside the whole time. My 3% stop was way under it, so that didnt present a problem.

There had been one slide lower around 11:50 that allowed me to draw out a wider channel, and I got a pretty good idea of how everything had set up.

At this time I saw SSO was approaching the high of the day and I moved my stop up to 2%

At the next test of the lower end of the channel around 12:17, I moved my stop up to 1%

I then started looking at the Stochastics and saw SSO was getting in the overbought zone. I wasn't sure if I should ride out the next wave down, because I figured there was a good chance SSO needed to readjust and would break the bottom trendline as a result.. plus the HOD was coming up

So I used the hotkeys in QuoteTracker to quickly look at SSO from different timeframes.

I checked the 5min, 10min, 15 min and 30min.

the 5 and 10 were showing the stochs being in the high range, and the 30 was getting up there.

So I figured I was a good $360 in the green at that point and should call it a successful trade- SSO was bumping sideways and it looked like it was running out of juice under the top of the channel and a bit under the HOD too.

I plopped in a market order and got a quick fill, exiting at 12:33pm for 21.333 a share.

No sooner had I gotten filled than a giant red candle appeared and the downslide to the bottom of the channel began It was like I had hit the "fall" button.

When SSO got to my lower trendline, it fell right through it and traded sideways just underneath it.. so I felt like I made a good call.

 

[quotetrader]

STOCHS IN VARIOUS TIMEFRAMES

 

[quotetrader]

Turns out SSO wasn't done- it ranged around under the trendline for a bit, hit oversold on the stochastics and blasted up really fast..

It had a ton of momentum and went straight up through the channel and out the top, past the high of the day.

The HOD then became support for a while, it ranged off of it, but couldn't make a higher high on the second wave up and then trended down and out of the previous channel.

I didn't see that coming at all and I don't really know how I would have taken advantage of it.

SSO had my original position almost twice as profitable at the peak of that blast upwards, but I later calculated that had I just let SSO trend along with a 2% stop, and left it alone- it would have stopped out at 21.26 which was actually lower than where I manually exited, so oh well.

How would one have seen that second take off at 1PM coming?

I welcome all advice, feedback and comments

Thanks for your help..

 

[quotetrader]

Well, its been a few months since my last post in the ol' journal.


Still trading, and its been a rough ride.


I did a bunch of test trades, and spent alot of the past 2 months or so learning a bit more about trading.

I guess I am getting better, but I'm still not good.


I'm still trying to scalp intraday.. based of oversold/overbought, market internals bias, and stochastics.

I ended up putting funds back into my daytrading account, only gave myself about $500 over the $25k limit though.

lost that, went back to the drawing board, tried to figure a few things out and funded it once more- with another $500 over the minimum.


I cant remember the exact details, but I was up, and was down, i was up again.

At one point, it was near the end of the trading day and I was under the minimum. I decided that instead of cutting the trade, and having to fund the account YET AGAIN, the hell with it, I'm just going to hold it overnight and wait until its back.

So I did that once or twice, and it ended up working in my favor.

One time, it took weeks, another time it took one single gap up.


But this is all a result of my overall bad trading.

Typically, I'll be up and bit, and just don't know when to stop.

Take today for example. I was up $200 for the day and told myself the day is over.

Well, guess what- around 3:30, I take a peek at the market and see what I think is a good setup- jump back in for just one little trade, and BAM it goes against me and before it sinks in, I've given back the profit of the day and then some.

So then I do what I always do- try to hold on, and just get back to b/e or something.

It went against me and i barely eeked under the damn minimum again, and now I'm once again holding the F'in position overnight.



Here's what I now know:

1) I overtrade. I should be happy not losing money and making a small profit each day. $200 seems like a decent goal. $200 up, I stop, $100 down, I stop.

2) Knowing what size to trade depending on how my P/L for the day is looking.

If I'm near my goal, I think I should trade smaller lots to risk a bit less. It really sucks giving back in one trade what took half the day to build.

I need to get a better instant understanding of how fast my lot size can move. Today on that last trade I used a smaller lot size than I had earlier in the day, but it was still too big and got bad too fast. I should have been using a very small size, since I had already done well. Or preferably I should not have been trading at all.


Here's some more things I've learned:

Stopping out a trade is complicated.

When I first enter a position, I tend to see red in the P/L. If I see green right away I know its a good entry..

but alot of times, my order gets filled towards the top of the candle, add to that fees, and I'm usually starting red.

So then you gotta set a stop. Well, you can set your stop to where you feel comfortable losing that amount of money- but thats based on your feelings, not so much TA logic.

If you set stops like that, and not just under the obvious support for the move you are trying to ride.. you will quite often see the thing wiggle down, hit your stop- make you eat a loss, and then find support, and trade up into the move you were looking for.

So logically, stops need to go under the support area.

So this is where a conundrum comes in.

You want some confirmation before you enter the trade. You dont want to see some basing and just assume this is where things will bounce.

So you wait to see a little strength, and then decide to go in.

Well usually this means the stock is trading a ways above its support (base) now. It can just be like .10 but on 1000 shares, thats a $100 loss and on 2000, you get the picture.

You get with a couple of those a day and you are really getting behind the 8ball.


So the trick is to get in real close to the support, so your stop can be TIGHT.

but that is much easier said than done- sometimes it just trades right back down to it, take a pause- lets you get in, and then takes off.

Othertimes, it trades down, pauses, you get in and the bottom falls out. Thats ok if your stop was tight.


I could put out limit orders near the support, havent really tried that yet, but it seems like alot of the time i wont get a fill and just watch things move on up.


So if youre setting these "logical" stops and you get hit with a few in a row, you can really F up your week. You'll be chasing your break even for a couple days.

How do you manage this?

Have a daily loss maximum? You cross it, you stop for the day?

Does stopping for "the day" really even make a difference when you can just get stopped more the next day?


The flipside of this is being looser with your stops- using manual stops, etc

Theres nothing worse than trading yourself up +$500, and then seeing yourself down $450 in seconds.

I just DONT WANT TO REALIZE THAT LOSS. It means I've traded all day for a negative or zero P/L!

So I hesitate to cut it.

and thats when the bad ones can become REALLY bad ones. I just dont want to accept in a matter of seconds, that I just wiped out the day and have to start all over.

So I hesitate and then I'm really down.

and before you know it, you're where I am right now-- needing a day to a week of movement to fix my position.

And of course theres always the risk it will get so far away from me, I'll have to cut it for a SERIOUS loss.


So thats where I am.

I've made alot of good trades.

I've identified alot of good entries.

and i've made some good money.

But in the end I've dicked it all up with a few runaway losers, or multiple little stops piling up.

And I'm pretty much zeroed out, or eating a little loss for all my efforts.

Awesome.

This week i really felt like quitting this thing.

At what point do you just quit?

At what point do you tell yourself you should keep going - even fund yourself a bit to keep trying?

Ahhhh I dunno :/

 

[NoDoji]

Quote from quotetrader:

Here's some more things I've learned:

Stopping out a trade is complicated.

Well, you can set your stop to where you feel comfortable losing that amount of money- but thats based on your feelings, not so much TA logic.

If you set stops like that, and not just under the obvious support for the move you are trying to ride.. you will quite often see the thing wiggle down, hit your stop- make you eat a loss, and then find support, and trade up into the move you were looking for.

QT, I'm using a new trading platform that allows me to place stops anywhere (Etrade you had to be .10 cents away fro the bid/ask), and so the past 3 days I've been trying out a bunch of stop strategies, mainly because I encountered the same sorts of issues you describe here. In fact I started a thread not long ago to get input about managing stops.

What I found out over the past few days is there are no easy answers to this one, because every trade is different no matter how similar the setups.

One thing for sure is you need to get your plan ready while a trade is setting up. Let's say you want to catch a piece of an established uptrend, so you watch the price pull back toward an intraday moving average, or to the trend line. At this point the stochastic should be in oversold territory as well. Before you put on the position, you determine at what price the setup would be invalidated (for example if the price suddenly falls below the low of your entry bar, or if it falls through the moving average more than x cents). This will be your stop price.

Knowing your stop price and your max loss per trade, only put on a size that leaves you comfortable with the loss if the stop is hit. So if your stop price is .20 cents below your entry price and $200 is your max loss per trade, then 1000 shares is your max size.

Also take into account the "personality" of the stock or ETF you're trading. This week I traded URS a few times, which trades in the $50 price range with a fairly wide spread (often .07 cents or more). The price moves sharply too, sometimes jumping back and forth .20 cents in a few seconds. This means I needed to place a wide stop just to stay in the trade. As a result, I waited for only the strongest setups, and kept the size very small so I could put in a survivable stop. All my URS trades worked out well and were profitable, because I took care in planning well and only going in on the absolute strongest setups.

I wish I'd been as careful on every trade; I often traded anything that moved this week in my haste to test stop strategies, and burned a bit of cash, both with less than ideal setups, and a few order entry errors.

Quote from quotetrader:

This week i really felt like quitting this thing.

At what point do you just quit?

At what point do you tell yourself you should keep going - even fund yourself a bit to keep trying?

Ahhhh I dunno :/

Since you are still practicing and learning, either trade very small size until you find your rhythm, or use a demo account to practice.

Best of luck to you!

 

[quotetrader]

Thanks for the reply ND

I felt like quitting this week- not really due to losses, but upon realization that in months I havent really "made" anything.

I'm more or less in the same spot profit wise. If not a tad to the downside.

That is annoying, figuring all the mornings i had to get up early, and the evenings i spent going over charts, the stress, the time spent hunched over the computer, etc etc.

I've been screwing around with trading now for so long, I feel like I should be able to make and keep *something*

everytime i have a good stretch of trading, and I think I'm getting somewhere, feeling OK about my trading- i end up in some bad trades that tells me- "no you suck, dont think you have any skill here- youve just been lucky"


I guess i could attempt to try and control my stops better- but honestly, it like 6 of one, have a dozen of the other-

you either give it some wiggle room, and take larger losses on bad trades.. or you get stopped out for small amounts over and over and over.. because the stops are so tight.

aarrghghh

I'm seriously thinking of trying to do all the wrong moves, and try to lose money, cuz i think i could pull some decent profits that way.. heh fade myself.


there were a few trades today, though that i did the right thing on- got in when i shouldnt have, I knew my entry was no good.. (say, it was probably about to reverse from oversold/overbought, but my entry was at the top of a high candle above support, and a pullback was coming- i was too far from support, and it wasnt taking off, so i'd get out quick, take a tiny loss or b/e.

That does help. If i dont feel good about a trade once entered, or if im thinking "maybe i shouldnt have pulled the trigger on this one"

im just backing out. I've held too many simply becuase i was in it. I know now that you get a few seconds to a minute to change your mind with a reasonable loss before a trade like that goes real south on you.

Also today i found myself doing what i often do.. trying to stand in front of a downside avalanche because the stochs are showing as extremely oversold, and theres a slight pause, consolidation, then it just keeps blowing out, pushing the stochs to the floor for another 20 minutes.

No more of that for me. If the stock has given back more than 50% of its previous run, and the downward angle is anything more than 45 degrees, im not going to try and catch a bottom bounce.

I think i try too much to catch reversals.. sometimes trading with the trend scares me. i think it can't keep going this way for much longer.. but usually it does.

 

[Set your stops]

Quote from RAY:

I didn't read everything you wrote. The fact that you wrote so much, points to that you have it all wrong.

I saw the some RSI "and stuff" in one of your paragraphs.

I will throw a few things out here. many may not make any sense to you. I am not trying to be aggressive, just showing you a glimpse of a different view.

Let me tell you something about me. I have been intimately involved with financial markets for a quite a while now.

I know what the acronym, RSI stands for. But that is all I know of it. It sure sounds cool. Relative Strength Index!

So, I am not disparaging it (them). I am sure there are many people who have been dominating the financial markets with the RSI. I can only assume they maintain very secretive lives...

Now, I see that you into reading some trading books. Tony OZ (Tony was a participating member @ EliteTrader, in the good old days).

I will list every book that I have read about trading (I might have forgotten one or two as this spans well over a decade):

Complete Reads:

Market Wizards
Market Wizards 2
Liar's Poker
How To Trade In Stocks (J. Livermore)
Just so you know, it is thought that JL's favorite book was: http://en.wikipedia.org/wiki/Extraordinary_Popular_Delusions_and_the_Madness_of_Crowds

Half reads:

Mind Over markets
Way of the Turtle

Quarter Reads:

The Education of a Speculator (read this if you like stories about squash and Brooklyn).

Next up, I figure I'll have it read by the end of the year:

Phantom of the Pits

I have read some papers that pertain to this topic: They encompass game and market theory. AND MONEY MANAGEMENT. <hint!

Some of your quotes (they are BOLD): that there WAS a "logic"

There is logic. My logic for the short term trader is that the market has to FUK enough people to pay for itself. Then that logic continues on to how is the market going to FUK me?

Think of the first FUK as entries, and the second FUK as exits.

...showed me that before I was waiting way too long. I wasn't taking quick profits

Taking quick profits is not part of the plan, unless you are scalping for the change dropped on the floor.

I make a series of small winners-

Where are the series of BIG winners? (Big means substantially bigger than any loser)

I'd hit some trade that went bad and it would get huge on me and wipe everything out.

AHHH.. Here is your big trade, good job! Oh Wait, you were on the wrong side of this trade... I have never heard: 'let you losers run, and cut your winners short'. But then again I am not that well read.

Guess what? You are on the road to getting your face ripped off.

Often these trades I'd end up in the position where I just wanted to get back to break-even and get out

So you were Hoping? Hope does not belong here. The rare time I feel "hope" I look to close the positions (UP or Down).

"I don't want to sell when its this low, I'll just let it correct back to breakeven, or at least reduce my loss somewhat"

Face Ripping Statement /\. Imagine a big starving Polar bear (Damn global warming) ripping your face off of, well your face.

...now times that by ten.

It's not like I havent made some good trades.

Well, not to be insensitive. You have not described a single "good" trade. All of your descriptions and logic have pointed to you eventually getting your face ripped off.

I found this setup, shorted and proceeded to watch the most baffling rally I had seen in some time- SPY just kept running up with superpower right in the face of its daily range and RSI.. I couldnt accept that it wasn't going to correct and just held on like a tool.

A real trader, one better than me, would have closed that loser out quickly and hammered the long side. Even if it was in the face of the great RSI.

I am trying to be constructive with you. By what you have described, you have to change many things ABOUT YOU before this can work for you.

I wish you the best. Watch out for those Polars!

This person seems logical.

In an enclosed environment with finite resources, someone has to lose in order for another to gain.

The markets are a zero sum environment.

Don't play in a poker game where everyone else is better than you.

 

[Set your stops]

Quote from nysestocks:

It can be very beneficial to see what others do not know!

This person seems to be one of the better players, but perception doesn't always correspond with reality.