NoDoji's Day Trading Log

[NoDoji]

I traded my first stock about 5 months ago, then focused on swing trades and options. I learned a ton via the school of hard knocks and hours of self-education and chart study. I paper traded some day trading strategies for 3 weeks or so and last week decided to actively day trade. I've been keeping a trading journal since April and will share my daily adventures in the hopes it will help keep me from doing something really stupid.

Comments from wise old traders are always welcome

July 25, 2008:

First trade of the day, nice retracement on SPWR (qty 1000) that rallied hugely for a $1230 gain in 15 minutes. A looser stop would’ve allowed a good added bit of profit, but SPWR has tended to pull back more than I normally like before continuing. An entry later in the day that was signaled went past my target rather quickly, but turned out it would have returned another $1000. However, I am pleased that I stuck with my rule of not chasing, as that’s been responsible for many losses in the past. I prefer the security of high probability and quick lock-in stop set at break even.

Second trade was a JNPR short. They gapped up on record earnings and hit new highs all morning. Shorted 1000 shares at 26.22 and covered at 25.97 for a $250 gain in 15 minutes.

Shorted JNPR again not long after the first one at 25.72 and it stalled for nearly half an hour, so I covered at 25.74 for a $20 loss.

Next, I shorted BIDU after watching its chart carefully. A gradual downtrend with mini rallies set the stage and I shorted 200 shares as the next rally began to stall (figured out what “fading the move” means) at 333.20 and set a target profit via limit order to cover at 332.20. BIDU moves in frightening chunks and just when it looked it might turn against me and cause me to cover at a very small profit, it triggered my limit within seconds for the full $200 target profit in just 4 minutes!

Shorted JNPR yet again at 26.17, and it stagnated for over half an hour. I set a stop at the day’s high and grabbed a bite to eat. This time it rallied out of consolidation and the stop triggered for a loss of $200. LESSON: Don’t trade a stock that’s consolidating just because you THINK you know where it will go based on what it did a while ago. Wait for the actual break in one direction or the other.

Rather than leave JNPR alone, I shorted once more at 26.44 when buying volume dwindled and selling pressure began. Could’ve scalped $50, but thought for sure it was pushing a bit lower, then with frightening speed a rally began, triggered by institutional purchases (10K and 20K lots appearing on the Level II). I should’ve exited on the spot for a tiny loss, but decided to give it a bit of time. A secondary rally ensued and I quickly placed a stop at 26.84 that triggered a $400 loss. I was very pleased with my ability to cut the loss quickly without thinking, analyzing, or hoping. I had no regrets afterward. LESSON: Exit quickly large blocks start printing against your trade.

(Turns out the JNPR short of the day occurred almost at market close when it topped 27.00 and failed to hold that new level. It pulled back to 26.57 in just minutes.)

Good weekend to all!

 

[Robert Weinstein]

Best of luck to you and I will watch your journal.

remember that its more important to not lose money than it is to make money when starting out. ( you wouldn't let your 15 yr old drive a nascar car in a real race before they had a drivers license and trading isn't as easy or boring....LOL)

 

[NoDoji]

1R, in reviewing my day I am very pleased to have not lost money, and have tossed aside my regrets about missing CLF's second entry, as it could just as easily have dropped back to 98 :eek:


July 28:

Wanted to climb CLF this morning since they were trading on their lower end; used 1-min chart and got 1000 shares at 98.92 after a nice retracement off the low. Did not enter a stop, because this is CLF, always volatile in the early a.m. and did not want to be shaken out. Dipped to 97.36 and then did a real retracement. Set a stop once profitable and got stopped out 5 mins from entry at 99.13 as it pulled back. Made a mental note to re-enter if a pullback to 98 retraced. Pullback to 98.40 retraced and I missed it because I was investigating my other charts plus the hi/lo ticker. Once I noticed CLF again it was above 100 and I decided it was too high to go long at that point, leaving $4/share on the table. It's easy to know that in retrospect!

Mid-morning, V was looking good as it failed to make a new low. Got in a bit high at 71.55, then instead of setting my stop just below the day’s low (my common strategy on less volatile stocks), I set it tighter, because my ego didn’t want to give up my $210 gain for the day on CLF. Got shaken out at 71.78 ($270 loss), and it immediately rallied to 72.50. Put that one behind me and moved on.

Noticed CNC had pulled back sharply from its high of 22.42, tried to resume and failed at 22.27, tried again and failed at 22.10. I liked these lower highs and shorted CNC at 22.08. It was an extremely gradual trend of lower highs and lower lows for quite some time. At some point it was trading around 21.89, and I played around with my cover order trying to get the ask lower. That was an exercise in futility, so I left a standing order at 21.87 in lots of 200 shares, which eventually triggered piece by piece for a gain of $210.

Around 3:06 I noticed SPWR failed to make a new low and retraced. After confirming the trend, I used a market order to get in at an average price of 72.84. I placed a stop at break even as soon as possible, because near the end of the day these rallies can be rather tired. It hit 73.26 and stalled, so I intended to raise my stop and instead entered the order as “limit” and it filled at market – 73.16 for a $320 gain. It didn’t really seem to have a whole lot more to give after that so I called it day.

 

[z0r]

Nice journal nod. You seem to have the right mindset for only trading stocks 5 months... an inspiration for a fellow noob trader.

 

[NoDoji]

Quote from z0r:

Nice journal nod. You seem to have the right mindset for only trading stocks 5 months... an inspiration for a fellow noob trader.

Thanks, z0r. I have to make this work, or I have to get a regular job, so I've put my heart and soul into it, and you wouldn't believe the mistakes I made the first four months.

 

[Jegnyr]

I am enjoying your journal so far. Thanks for putting forth the effort.

Keep up the good work, and best of trading/learning/living to you.

 

[NoDoji]

Up $1375 on the day, but things may not look so good tomorrow:

July 29:

APWR hitting new lows, so I went long at the retracement following the first failure to hit a new low (23.60). I set no stop because the price was solid and I was willing to hold overnight if necessary. It then dropped to 23.00 before rebounding and finding new highs. APWR generally behaves this way. It then rallied nicely and had a pullback from 24.18 and stalled for quite some time. Finally, I exited at market for a $400 gain, and it immediately surged eventually closing at 26.00.

TRA started pulling back after hitting a high of 53.40. Tried to test the high and failed at 53.23, then again failed at 52.79, so I shorted them at 52.62. The trend continued and at 52.25, I set a stop at 52.55, and damn if there wasn’t a quick shakeout out of nowhere that took me out. Net gain was $96.

BIDU was testing its highs for the day and seemed to stall there, so I bought 5 Aug 340 puts, figuring at some point it would do that BIDU thing and pull back to 335 or so. It then rallied thru the day’s high, and seemed to weaken a bit, then rallied some more, eventually hitting new highs all afternoon. Holding overnight, but will take the loss if it presses toward 350 tomorrow.

CLF had tanked from nearly 107 to 101-ish and started yet another attempt at a rally. It hit 102.22 and pulled back, failed to make a new low and retraced. Bought in at 102 and it quickly dropped to 100.50 and started a nice rally from there. I didn’t set a stop because I’m willing to hold CLF overnight. It failed to make a new low after the rally from 100.50, which was encouraging. After much gnashing of teeth, it began its gradual ascent. When it climbed to 102.65, I set a stop at 102.35, later raised it to 102.40 and left it at that level when it climbed to 103, figuring a retracement back to 102.40 would be a sign of too much weakness. It climbed to 103.80 and I moved the stop to 102.97, figuring a drop thru the 8-period SMA would trigger a selloff. Ended up stopped out on a pullback to 102.90, before it continued its eventual climb close to 106.00.

In restrospect (where all trades are successful) I should’ve left the stop at the 20 SMA. This held true for my APWR trade as well. The 20 SMA would've kept me in the trade for a significant additional profit.

CNC testing 22.70’s three times and failing, so I placed a short order at 22.67, which I then forgot about because the stock hovered around 26.63 and I left my desk for a while. Suddenly I was short CNC. Tested .70, failed again, then out of nowhere a break to the upside, testing 23.00 and settling at a close of 22.90. Holding overnight.

 

[NoDoji]

-$1994 on the day.

Set a buy stop on CNC prior to open at 23.07. Immediate rally took me out with serious slippage for a $527 loss. Must’ve been market-on-open buy orders lined up for that surge.

Set a stop on BIDU puts because they were gaining in pre-market and I needed to cut the loss to less than 2% of trading account (my max loss per trade). My 10.80 stop did not get triggered even with the bid sitting at 10.60, so I cancelled the order and moved the stop up gradually as the stock moved down from open. Eventually it rebounded hard and took me out for a $2400 loss.

Saw CSIQ hitting new lows and I got in at 29.33 after the full retracement confirmed a failure to make a new low. There was a small pullback and a strong rally. I placed my stop low and then tightened it significantly when the price had pulled quite far from the 8-period SMA. Got stopped out at 30.32, taking some sting off my $3K loss.

Later after a long pullback, noticed CSIQ fail to make new low and entered upon a confirmed retracement at 29.34. Small movement upward and I set a tight stop at 29.38 because these setups later in the day can fail abruptly. It failed abruptly and I got taken out at 29.33 (slippage) as it tanked in less than a minute to 29.05.

Kept CSIQ on watch for retest of day’s support to trade again, and the setup came on another retracement off a higher low. I got in for 29.06, and it rallied. I wanted to be more patient this time and set the stop at 29.15 after it rallied to 29.44, and ended up taken out on the pullback almost to the penny – just a $70 gain after all that.

Very frustrating, so I’m rethinking this: I trade a lot of stocks I know very well and I believe I should trade them swing instead of intraday when they play off S/R levels. I put on CLF yesterday at 102 and considered holding them overnight, but ended up taking a $1000 profit and leaving a lot on the table. Today CLF continued to rise and then at its recent support of 110 it experienced a triple play breakout: break out of consolidation, break through the convergence of its 8- and 20-period MA’s, and break through the 110 support. It rocketed to 116 after that, and I missed the move. Had I held overnight, I’d have had a $14K gain today.

Same with CSIQ, rebounding after an inexplicable selloff, I knew the stock was going to reach for at least 35 again in the near term, yet I played it intraday for small moves. It not only closed at what would’ve been a strong 2nd profit for me, but then hit 31 in after hours. I need to consider playing these stocks swing off S/R levels, and save intraday trades for the rangers like AAPL, which is traded so heavily by everyone watching the same signals you can pretty pick direction accurately 80% of the time

On a side note, I was preparing an order to short 500 POT on a failure to top 212 and lost internet, missing the $2/share move. It looked too strong to short after that. Time for a faster backup connection; my thanks to Stu for recommendations!

 

[NoDoji]

Quote from NoDoji:

triple play breakout: break out of consolidation, break through the convergence of its 8- and 20-period MA’s, and break through the 110 support.

Clarification: through 110 resistance, not support.

 

[NoDoji]

+3400 day, one of my best ever

MA reported good earnings, but a huge write down due to a lawsuit tanked them in pre-market and it continued down at open until it tested its near term support just below 238 and pivoted. This is one of those rare gifts the market gives traders, like when POT kept testing all its support levels over the past few weeks and you can put on beautiful longs on the bounce. On the retracement off support, I quickly snapped up 10 Sept 260 calls (paid a bit more for Sept instead of Aug to give me time to let the trade play out). The rally was thorough and rewarding. I kept moving my stop up to lock in profits, but kept the stop very loose as the bid/ask spread was wide due to volatility. When I saw the rally stall, it would’ve been best to take the profits right then ($6K), but my greedy self kept seeing what it wanted to see (retracement to 260) instead of what the market was showing me (stalled rally). That’s the difference between me and a seasoned trader. The rally very quickly reversed and triggered my loose stop for a gain of $3800.

Shorted DRC at 39.10 when it pulled back from its high, made a lower high, and continued down. I set what I thought was a very loose stop at 39.59, got a bite to eat and came back to find my stop triggered for a loss of $490, after which it reversed and continued down quite nicely. What a waste, but that’s what stops are for, I guess; they could’ve headed back to 42 the way the buying volume had heated up.

NLC gapped up from a previous day’s huge rally and continued on to new highs on what I considered rather weak news (analyst upgrade). It pulled back, failed to make a new high, and retreated some more. I shorted it on the next rally at 23.58 and it behaved appropriately. I took profits too early at 23.43 during a slight stall, as there was still strong selling pressure. Patience, patience... Gain of $150.

I had awakened this morning with a plan: CSIQ swing trade (enter in the 30’s, initial target 32.50; secondary target 34.50). After the crazy first 45 minutes of the day settled in, I went long at 30.92 on a nice retracement off a failure to make a new low. When they quickly became profitable and then reversed sharply all day, making new lows, my day trading self kept trying to annoy my swing trading self with rude comments :eek:

VRTX hitting highs all day, in fact trading not all that far from its 52-week high, and the rally stalls, unable even to test 35. The streaming news reveals my dream setup, which I’ve seen occur four times in the last three months and which produced massive returns for savvy traders (obviously not yet me). The setup is a stock trading close to its 52-week high, that’s had a strong fast runup leading into earnings and whose insiders have been selling in the 2-3 weeks prior to earnings. So there was VRTX with the CFO selling a huge chunk of his shares (86K), and a couple VPs selling as well. Then streaming news shows the CEO selling 12K shares late in the day. The reason I find these trades to be very high probability is because trading so high ahead of earnings, the company has to dazzle the street beyond belief to continue the rally, and the insider selling (especially the large CFO and CEO shares) gives a hint that maybe earnings will simply meet, or even fail expectations. Just look at LNN, ANAD and CPHD to see the devastation that follows. I bought 10 Aug $35 puts at 2.20, so my total possible loss assuming the stock were to rally far above its 52-week high after earnings tonight, is significantly less than my day’s profits, making this a very comfortable trade.

They are pulling back nicely in after hours.