March Trading Journals
- Thread starter Hitman
- Start date
i had no semi trades yesterday either. Biggest move in the index in probably a year and i was not involved.
My only premarket order was to buy 5000 shares of TER limit $34.10 . It opened at $34.25 and never looked back, closed at 37.5. My order of course was not filled. I knew it would be good on NVLS news, but was to scared to pay up. This is a major flaw in my trading and i seem to repeat it constantly.
I had my worst week of my career. I was down 4 out of 5 days and lost $20k. The previous 3 weeks had been my best as i was up some $40k. I'm pretty discouraged about my trading and am wondering how much my last 3 months of success was luck.
The good news is that i learned more in the last week than in the previous 3 weeks. You don't really learn much from your victories. Its the defeats that you learn from. IMO what makes a good trader is your defense game. You don't learn defense when you are making money.
Sadly, i found myself making rookie mistakes this week that i already knew were wrong. Shorting stocks making 52 week highs. Shorting stocks with good news. I'm now keeping a list of common trading mistakes on my desk and glancing at it each morning. Hopefully this will keep me from doing things i know are bad in the heat of the battle.
My only premarket order was to buy 5000 shares of TER limit $34.10 . It opened at $34.25 and never looked back, closed at 37.5. My order of course was not filled. I knew it would be good on NVLS news, but was to scared to pay up. This is a major flaw in my trading and i seem to repeat it constantly.
I had my worst week of my career. I was down 4 out of 5 days and lost $20k. The previous 3 weeks had been my best as i was up some $40k. I'm pretty discouraged about my trading and am wondering how much my last 3 months of success was luck.
The good news is that i learned more in the last week than in the previous 3 weeks. You don't really learn much from your victories. Its the defeats that you learn from. IMO what makes a good trader is your defense game. You don't learn defense when you are making money.
Sadly, i found myself making rookie mistakes this week that i already knew were wrong. Shorting stocks making 52 week highs. Shorting stocks with good news. I'm now keeping a list of common trading mistakes on my desk and glancing at it each morning. Hopefully this will keep me from doing things i know are bad in the heat of the battle.
I am not aware of any top traders from last year on target to make what they made in 2001.
People who trade heavily news stocks are a little less effected, as this year so far we had TYC, ELN, KMI/P/R trio, etc . . .
The most consistent performer at my firm, someone who made 450K last year without a single down week, is up around 60K this year so far, held to 10K for February, throw the summer months in, probably a projected 250K finish.
The number 3 trader at our firm last year, who made 1.5 million with a shotgun approach (takes 30 positions at a time), is up "just" 100K YTD, probably a projected 500K finish.
People who trade heavily news stocks are a little less effected, as this year so far we had TYC, ELN, KMI/P/R trio, etc . . .
The most consistent performer at my firm, someone who made 450K last year without a single down week, is up around 60K this year so far, held to 10K for February, throw the summer months in, probably a projected 250K finish.
The number 3 trader at our firm last year, who made 1.5 million with a shotgun approach (takes 30 positions at a time), is up "just" 100K YTD, probably a projected 500K finish.
Hitman,
FYI, since you asked, yesterday's trading involved 8 s&p trades and 5 Nasdaq trades. The percentages of course remain the same. Since I'm trying to expand my stock trading repertoire by placing a couple stock trades during the day as well, this is very "active" trading style for me.
I respect what you are doing and the energy you dedicate to it. Yet, my main concern still remains: the high percent commissions you pros pay is a deterrant to those like me who are used to the 5-20% cost structure.
Also, the reasoning behind your statement that you'd take 10 trades that would give you a slightly better net profit than one or two trades, is unclear to me. Risk must be factored somewhere in your thinking, and, in my trading, risk is almost proportional to the number of trades I have to engage in (other factors like stop loss, etc being equal.) Therefore, I would always take the fewer trades' scenario.
In addition, your friend's story invokes a different question in my mind: how safe would it be for me to trade multi-thousand share positions, especially given the fact that I didn't recognize most of the stocks you mentioned (being used to daytrading liquid stocks like CSCO, AMAT, GE, MSFT, IBM, etc.)
One thought that I have here is, if the leverage that the firm offers is what attracts you to this type of professional trading, have you ever considered trading futures? Assuming that you like "active" daytrading that is. Friends of mine who prefer swing or position trading, focus on stock and futures options instead. I am not saying that it's a better or easier or safer way to trade - all I'm saying is that leverage is easily available in those instruments by definition.
This thread, enriched by your real trading life stories, is of great interest to me - please continue and I'll contribute what I can.
FYI, since you asked, yesterday's trading involved 8 s&p trades and 5 Nasdaq trades. The percentages of course remain the same. Since I'm trying to expand my stock trading repertoire by placing a couple stock trades during the day as well, this is very "active" trading style for me.
I respect what you are doing and the energy you dedicate to it. Yet, my main concern still remains: the high percent commissions you pros pay is a deterrant to those like me who are used to the 5-20% cost structure.
Also, the reasoning behind your statement that you'd take 10 trades that would give you a slightly better net profit than one or two trades, is unclear to me. Risk must be factored somewhere in your thinking, and, in my trading, risk is almost proportional to the number of trades I have to engage in (other factors like stop loss, etc being equal.) Therefore, I would always take the fewer trades' scenario.
In addition, your friend's story invokes a different question in my mind: how safe would it be for me to trade multi-thousand share positions, especially given the fact that I didn't recognize most of the stocks you mentioned (being used to daytrading liquid stocks like CSCO, AMAT, GE, MSFT, IBM, etc.)
One thought that I have here is, if the leverage that the firm offers is what attracts you to this type of professional trading, have you ever considered trading futures? Assuming that you like "active" daytrading that is. Friends of mine who prefer swing or position trading, focus on stock and futures options instead. I am not saying that it's a better or easier or safer way to trade - all I'm saying is that leverage is easily available in those instruments by definition.
This thread, enriched by your real trading life stories, is of great interest to me - please continue and I'll contribute what I can.
It is difficult to say, from a mathematical point of view anyway. It would be hard to "handicap" silk based solely on this performance.
That is why it is so much easier to handicap someone like hitman, who takes or has taken so many games - statistically, you _can_ make some guesses to his game, even long term.
I have seen traders at prop firms who's trading account fluctuates by $30,000 to $40,000 a day, and this is "normal" for them. The question is, is this recepie either for Barrry Bonds type years, or two outs, two strikes bottom of the ninth, and you are down?
nitro
Yannis:
***Yet, my main concern still remains: the high percent commissions you pros pay is a deterrant to those like me who are used to the 5-20% cost structure.***
I don't understand what does having a low profit to commission ratio has anything to do with being pro? You took 15 trades on Friday, I took probably 300, if I don't give up a high percentage of my profit to commissions, something is wrong.
Just because you are pro doesn't mean you have to take so many shots, if you are so confident about your trades and can make a living with just 5 trades a day, that's fantastic. I don't have that level of confidence in me, and I don't want to make or break my die with just five trades, so I take fifty.
And my comment was, a lot of people seem to look down on people who pay a lot of commissions (oh you are working for your broker). Guess what, it is THE MOST CONSISTENT way to make money from the market, it will NEVER EVER be the most profitable, but it will be THE MOST CONSISTENT WAY to take money out of the market.
For a new trader, or any trader in a tough market for that matter, that means survivability. I know I will never make a lot of money with this kind of defense, but I know it has to take some really really bad luck trades (like my friend's unfortunate KMI accident) for me to take a huge hit. Wherea if I use say quarter point stops, a stop out will probably cost me 30-40 cents depend on the fills, and off 1000 shares that is $300-$400 dollars, 3 bad trades I could be down a grand. I don't open myself up for that kind of damage, if I take 1000 shares the second he takes out the BID I try to lean on I am out of 500 shares already, sometimes I will be the one to hit that BID myself if I don't think the trade is no longer valid. For example when futures started to rip I will take a lot of positions but if they don't move when the futures are ripping what do you think they will do when futures are coming back in (especially for bottompick's)? I dump them all for a 1-2 penny spread loss as soon as futures show even one down tick.
No I will not make a million dollars a year with this kind of approach, but if I take a large hit, it better be something I had absolutely no control over, like the HI 75 cents spread on 1500 shares with my stop 1 penny above the offer kind of crap. Then, when I feel I am in sync with the market, I can loose it up, just let the winners ride, etc . . .
This kind of defense cost a lot of commissions, and it is like I am running a business while paying a premium for insurance (so that a slump will not send my equity curve downward, hopefully it is just a consolidation, I mean since I had my first profitable month in Jan 2001, I had just one down month and it was a $500 loss). It minimizes the volatility on the equity curve, but if my shots start to fall (last two months I am shooting 45% versus 50%, 5% may not sound like much but when you take a large number of shots it matters, I am sure the turtle will win race over a lot of rabbits.
***Also, the reasoning behind your statement that you'd take 10 trades that would give you a slightly better net profit than one or two trades, is unclear to me.***
Well my point is I rarely go for full point moves, most of my winners are 10, 25, 50 cents, and I always get out with 5-10 cents loss at most. Therefore, I take a large number of shots and go for a lot of singles, rarely doubles, and almost never home runs. When the oil moves I try to take 2-4 oils instead of 1 to diversify my exposure.
And that minimizes the risk. If I take just 5 trades a day and I go into a losing streak, I would think all the successes I had before was because of luck. When I take 50 a day, I know I have a large sample of data to evaluable my overall ability as a trader. My personality requires constant confirmations that my style still works.
The more you are trying to get out of individual trades, the more risk you have to take, as simple as that. That said, to make top tier money you have to loosen the stops and just let it ride, but I am not looking for home runs right now, I am just trying to squeeze out a living.
When I feel confident about something I will let it ride, that's how serious money are made. But I just don't have that kind of confidence in my shots right now.
As I said, if you want to try equity trading, give Worldco a try as you can start with little to no money down. If you do what you do on Friday all the times, I am going to pass my leadership position to you and ride your coat tail to my dream condo in Manhattan. And I am serious about that, currently no one on my team possess any legit threat to beat me this year, but that can change as soon as one of them break out, and just because I am a team leader doesn't mean I will always be the best trader on my own team (kind of like in soccer where the stars are not neccessarily the captains).
It is basically two different mentalities out there. There are traders who will never lose to the market (last year I had a 86% winning days against the market, and I started October 2000), will only go down against commissions. There are traders who look down on that, and say if I am going to lose, I will lose to the market instead of churn myself to death. Two different schools of thought, I believe the former is better for newer traders, latter is better for those trying to push it to the next level.
Now, I have never seen anyone making SIGNIFICANTLY MORE MONEY THAN ME WITH MY LEVEL OF CONSISTENCY ON A PURE INTRADAY BASIS without paying a large amount of fees. No, message board claims don't count, I need to see people in action blow by blow on a daily basis to learn to trade their style. I have seen people from the "I don't lose to commissions" school in action, and I just can not stomach that kind of thing. The guy trades 4-5 stocks a day, he is bearish on them and he is going to short/short/short/short and short some more and basically hold on to it all day. In the end he has like one huge winner for like 5-6K and a moderate winner for 2K and 2 losers 1-2K a piece. He is up like 7K. Next day he shorts them again bam he loses 5K. Meanwhile, I probably made $500 a day on those two days. (Last year, the trader I mentioned above made exactly twice as much as I did, hence the comparison)
I can't handle the "my winners are going to be so much bigger than my losers" (this applies to winning trades/days) mentality. For me what if I don't get that big winner? Then I am dead in the water with some really painful losers. Just like the swing trader I described, he can go on a huge winning streak and a huge losing streak, and his left over's are going to be bigger than my 3 month's work.
I can't handle that Dallas Maverick mentality (I am going to score 120 points on you so what if you score 100), I would rather play defense and grind it out, and hopefully my offense will get better over time.
***Yet, my main concern still remains: the high percent commissions you pros pay is a deterrant to those like me who are used to the 5-20% cost structure.***
I don't understand what does having a low profit to commission ratio has anything to do with being pro? You took 15 trades on Friday, I took probably 300, if I don't give up a high percentage of my profit to commissions, something is wrong.
Just because you are pro doesn't mean you have to take so many shots, if you are so confident about your trades and can make a living with just 5 trades a day, that's fantastic. I don't have that level of confidence in me, and I don't want to make or break my die with just five trades, so I take fifty.
And my comment was, a lot of people seem to look down on people who pay a lot of commissions (oh you are working for your broker). Guess what, it is THE MOST CONSISTENT way to make money from the market, it will NEVER EVER be the most profitable, but it will be THE MOST CONSISTENT WAY to take money out of the market.
For a new trader, or any trader in a tough market for that matter, that means survivability. I know I will never make a lot of money with this kind of defense, but I know it has to take some really really bad luck trades (like my friend's unfortunate KMI accident) for me to take a huge hit. Wherea if I use say quarter point stops, a stop out will probably cost me 30-40 cents depend on the fills, and off 1000 shares that is $300-$400 dollars, 3 bad trades I could be down a grand. I don't open myself up for that kind of damage, if I take 1000 shares the second he takes out the BID I try to lean on I am out of 500 shares already, sometimes I will be the one to hit that BID myself if I don't think the trade is no longer valid. For example when futures started to rip I will take a lot of positions but if they don't move when the futures are ripping what do you think they will do when futures are coming back in (especially for bottompick's)? I dump them all for a 1-2 penny spread loss as soon as futures show even one down tick.
No I will not make a million dollars a year with this kind of approach, but if I take a large hit, it better be something I had absolutely no control over, like the HI 75 cents spread on 1500 shares with my stop 1 penny above the offer kind of crap. Then, when I feel I am in sync with the market, I can loose it up, just let the winners ride, etc . . .
This kind of defense cost a lot of commissions, and it is like I am running a business while paying a premium for insurance (so that a slump will not send my equity curve downward, hopefully it is just a consolidation, I mean since I had my first profitable month in Jan 2001, I had just one down month and it was a $500 loss). It minimizes the volatility on the equity curve, but if my shots start to fall (last two months I am shooting 45% versus 50%, 5% may not sound like much but when you take a large number of shots it matters, I am sure the turtle will win race over a lot of rabbits.
***Also, the reasoning behind your statement that you'd take 10 trades that would give you a slightly better net profit than one or two trades, is unclear to me.***
Well my point is I rarely go for full point moves, most of my winners are 10, 25, 50 cents, and I always get out with 5-10 cents loss at most. Therefore, I take a large number of shots and go for a lot of singles, rarely doubles, and almost never home runs. When the oil moves I try to take 2-4 oils instead of 1 to diversify my exposure.
And that minimizes the risk. If I take just 5 trades a day and I go into a losing streak, I would think all the successes I had before was because of luck. When I take 50 a day, I know I have a large sample of data to evaluable my overall ability as a trader. My personality requires constant confirmations that my style still works.
The more you are trying to get out of individual trades, the more risk you have to take, as simple as that. That said, to make top tier money you have to loosen the stops and just let it ride, but I am not looking for home runs right now, I am just trying to squeeze out a living.
When I feel confident about something I will let it ride, that's how serious money are made. But I just don't have that kind of confidence in my shots right now.
As I said, if you want to try equity trading, give Worldco a try as you can start with little to no money down. If you do what you do on Friday all the times, I am going to pass my leadership position to you and ride your coat tail to my dream condo in Manhattan. And I am serious about that, currently no one on my team possess any legit threat to beat me this year, but that can change as soon as one of them break out, and just because I am a team leader doesn't mean I will always be the best trader on my own team (kind of like in soccer where the stars are not neccessarily the captains).
It is basically two different mentalities out there. There are traders who will never lose to the market (last year I had a 86% winning days against the market, and I started October 2000), will only go down against commissions. There are traders who look down on that, and say if I am going to lose, I will lose to the market instead of churn myself to death. Two different schools of thought, I believe the former is better for newer traders, latter is better for those trying to push it to the next level.
Now, I have never seen anyone making SIGNIFICANTLY MORE MONEY THAN ME WITH MY LEVEL OF CONSISTENCY ON A PURE INTRADAY BASIS without paying a large amount of fees. No, message board claims don't count, I need to see people in action blow by blow on a daily basis to learn to trade their style. I have seen people from the "I don't lose to commissions" school in action, and I just can not stomach that kind of thing. The guy trades 4-5 stocks a day, he is bearish on them and he is going to short/short/short/short and short some more and basically hold on to it all day. In the end he has like one huge winner for like 5-6K and a moderate winner for 2K and 2 losers 1-2K a piece. He is up like 7K. Next day he shorts them again bam he loses 5K. Meanwhile, I probably made $500 a day on those two days. (Last year, the trader I mentioned above made exactly twice as much as I did, hence the comparison)
I can't handle the "my winners are going to be so much bigger than my losers" (this applies to winning trades/days) mentality. For me what if I don't get that big winner? Then I am dead in the water with some really painful losers. Just like the swing trader I described, he can go on a huge winning streak and a huge losing streak, and his left over's are going to be bigger than my 3 month's work.
I can't handle that Dallas Maverick mentality (I am going to score 120 points on you so what if you score 100), I would rather play defense and grind it out, and hopefully my offense will get better over time.
Hitman,
Thanks for your response.
Your discussion of the way you trade is great. What I would still like you to explicitly consider is my basic question: why do you trade pro?
For leverage? More than what's found in trading leveraged instrumaments like futures and options?
For consistency? I think you said that you value that aspect of your trading, but I wanted to make sure. But, consistency is not only found in proprietary trading, nor in rapid-fire, large position trading of equities alone. It is a question of risk and money management, primarily, imo.
For faster connection to the market and therefore more successful trading? Don Bright made that point in his seminar in NY a few days ago.
For capital - if you didn't have $25-30K to start a daytrading account? Worldco does seem to be kind to new traders and patient without asking them to put up too much capital to start with.
For getting an edge through the firm's training and/or mentorship? Was that succesful in your experience - ie, did Worldco give you uniquely valuable training?
Something else? You are obviously happy there, there must be something - or, maybe all of the above.
The fact that you describe your trading experience the way it happens and the way you feel about it is valuable to me, and possibly others as well, as I mentioned before.
My suggestion is that you remain open to others' experiences, because they may help you see some things from a different perspective. After all, as Richard Bach said, "argue for your limitations and they are yours!" (Yes, I was there in the sixties and the seventies...) Let me clarify, however, that you do not seem not to be open - I always make this suggestion to friends who present their position with lots of conviction and strength.
Having seen these numbers, I do believe that more gains are possible, through intraday trading, with similar if not better consistency. I know others who do it, but are usually reluctant to say too much in public. In this vein, as I mentioned before, if you want more details about my trading, feel free to contact me privately - no big secrets here. For the most part, however, percentages do the trick for this type of discussion, imo.
Thanks for your response.
Your discussion of the way you trade is great. What I would still like you to explicitly consider is my basic question: why do you trade pro?
For leverage? More than what's found in trading leveraged instrumaments like futures and options?
For consistency? I think you said that you value that aspect of your trading, but I wanted to make sure. But, consistency is not only found in proprietary trading, nor in rapid-fire, large position trading of equities alone. It is a question of risk and money management, primarily, imo.
For faster connection to the market and therefore more successful trading? Don Bright made that point in his seminar in NY a few days ago.
For capital - if you didn't have $25-30K to start a daytrading account? Worldco does seem to be kind to new traders and patient without asking them to put up too much capital to start with.
For getting an edge through the firm's training and/or mentorship? Was that succesful in your experience - ie, did Worldco give you uniquely valuable training?
Something else? You are obviously happy there, there must be something - or, maybe all of the above.
The fact that you describe your trading experience the way it happens and the way you feel about it is valuable to me, and possibly others as well, as I mentioned before.
My suggestion is that you remain open to others' experiences, because they may help you see some things from a different perspective. After all, as Richard Bach said, "argue for your limitations and they are yours!" (Yes, I was there in the sixties and the seventies...) Let me clarify, however, that you do not seem not to be open - I always make this suggestion to friends who present their position with lots of conviction and strength.
Having seen these numbers, I do believe that more gains are possible, through intraday trading, with similar if not better consistency. I know others who do it, but are usually reluctant to say too much in public. In this vein, as I mentioned before, if you want more details about my trading, feel free to contact me privately - no big secrets here. For the most part, however, percentages do the trick for this type of discussion, imo.
and she said any guy who tries to be so poetic sounding is gay. no wonder you can't get your princess.
Who is this princess anyways?
Also, how could you sign a 7 year contract? Do you know how fast this business changes. 7 years is a long time to be someones bitch. Anyways, quit sounding like such a puss and maybe you can nail "the princess."
Who is this princess anyways?
Also, how could you sign a 7 year contract? Do you know how fast this business changes. 7 years is a long time to be someones bitch. Anyways, quit sounding like such a puss and maybe you can nail "the princess."