NoDoji's Day Trading Log

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Quote from BostonKiller:

While I wholeheartedly agree, the thought process in fading (for me, at least), is that I don't want to chase and thus the price movement has to change direction for me to join the trade.

As in "it's so high, it has to come down" or "it's gone so low, it's bound for a reversal". Or something along those lines. You know what I mean.
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Agree, chasing a move is dangerous. The flaw in your thinking is you feel the trend will not continue and you want to get the reversal because price "MUST" come back because you missed the move. You are attempting to justify an incorrect mkt read (you failed to anticipate the breakout) by another incorrect assumption.

Try this: THINK CONTINUATION of the trend unless you get a solid gold signal to ring the bell for a reversal. Continuation signals are less common in many tool boxes than are so called reversal signals based on wishful thinking and osmosis picked up from false thinking of others.

What to do after missing a breakout: Wait for the retrace, it will come. If you missed a move, bite your tounge and please do not kick the dog. Let price settle down and chances are the retrace will allow you to get onboard. The problem with chasing (i discused this before) is you chase and get filled just BEFORE a NORMAL retrace and you get stopped out at the bottom of the retrace just before the CONTINUATION takes off. That is frustrating at best and at worst it costs you money.

FADING is guessing. Not cool.

Ok, back to less posts this year. Later.

PS: Rules matter, follow your rules in a game of chance..........that is the only way to win a super subjective game that has a trillion ways to destroy your game.

:eek:

http://www.youtube.com/watch?v=KF9mfwXAFgY

Nod, correct,,,,,,,,,,,,,, after the initial B out you can expect a second leg to lets say resist 2 on the pivots, etc. Many trends will have 3 legs to work with. The best trends have shallow retraces. Thats where the experience comes into play. Not all trends are egual. Plot the days pivots as a possible tool. Some days they work like magic. BUT, some trends have retraces wider ....depending on the length of the previous legs..........we canm have a 10 handle retrace after a 20 handle move. Not lately though. :mad:

THINK, if a retrace goes 50%, THINK continuation ..... play the odds of a continuation. a good spot to do an add-on if aggressive.
 
+ $77

Watched X move to test the HOD and offered .10 cents above it, missed by .03 cents and sold off pretty quick there. I didn’t chase because a) I was top picking and b) X was strong from the open, so I figured a more confirmed short entry would occur later in the day. The pushes higher were not being made with conviction once the opening run was over, so I wasn’t interest in a long entry at that level.

Short POT @ 119.29, pullback from 2nd lower high on the day, covered @ 118.85 for a $42 gain on 100 shares, just a dime from the pivot low of the move. I was very in sync with this trade after watching POT’s price action for a while, and only wish it had been 1000 shares.

Short X @ 59.47 pullback from HOD, 3rd push up, shrinking stairs; locked in commish and slippage via stop immediately because I was still top picking, and price was working hard to maintain the uptrend support at the 10-period MA in the .34-.39 range. Stopped out @ 59.45 for +$5.

Short AAPL @ 214.90 when a test of the HOD left a quick shooting star; trailed a stop pretty close near the MA in case the trend remained intact instead of a real reversal, hit for +$30. The MA bounce failed and then left another shooting star that I neglected to re-enter on, taking a break instead.

This turned out very frustrating. On one hand AAPL was swinging in a fairly narrow range, but the move I shorted was off a very mild intraday uptrend from the low of the range. So the reasonable options were to take profit right at the MA when support held there and then re-enter the trade, or trail a stop and hope for a quick breakdown, or take off half and leave the initial stop in play. This trade was later in the day; when these setups occur in the first hour they are generally stronger moves and not as much backwash because a true trend on the day has not yet been established. I also could’ve simply trusted the ride to stochastic oversold and ended up capturing a superb move to the downside. It’s very frustrating to take .15 cents of 3.70 of downside.

Later in the day considered shorting AAPL @ 213.25, when it was in narrow range consolidation, but I hesitated and it fell off a cliff again!

I really need to work on quick entries.
 

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Quote from BPtrader:

reverse the order:

it fell off a cliff and you hesitated.
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Yeah first I hesitated when the price was stalled in consolidation, then I hesitated again when it dropped .50 cents figuring it fell too far to short.
 
BPtrader


Registered: Jan 2009
Posts: 341


01-06-10 03:22 PM



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Quote from bighog:



FADING is guessing. Not cool.


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one man's meat is another man's poison, it applies in all technical analyses.
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Well now, that is quite a statement to make to us all. Since we all intend to help Nod in her quest to defeat this difficult game and not throw zingers toward others we challenge you to explain that statement in the interest of helping us all. Are you up to the challenge?

I fully agree there are many different ways to interpret so called signals and have stated that resides in the "ART" of trading. I am willing to forgive you for saying "it applies to all technical analyses" ( deduct 5 points from your grade for not properly spelled), but lets drill down into your explanation of fading is your meat.

Please explain in plain simple english how you decide with consistent results HOW TO FADE A MOVE? We are on pins and needles in suspense about how to do that , a mkt mystery of the ages.

Be warned, saying it is private or priority info will get you a failing grade because you were the one that insisted on challenging the entire class. :)

Also be advised i will not get into a tit for tat flame war...........this is an educational thread for the young lady.

http://en.wikipedia.org/wiki/Tit_for_tat
 
Quote from bighog:





Well now, that is quite a statement to make to us all. Since we all intend to help Nod in her quest to defeat this difficult game and not throw zingers toward others we challenge you to explain that statement in the interest of helping us all. Are you up to the challenge?

I fully agree there are many different ways to interpret so called signals and have stated that resides in the "ART" of trading. I am willing to forgive you for saying "it applies to all technical analyses" ( deduct 5 points from your grade for not properly spelled), but lets drill down into your explanation of fading is your meat.

Please explain in plain simple english how you decide with consistent results HOW TO FADE A MOVE? We are on pins and needles in suspense about how to do that , a mkt mystery of the ages.
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the plural form of analysis is analyses, 5 points unfairly deducted. :)

ok, i'll explain, since i have a lot of time. it's freezing cold outside.

First of all, let's assume that all entries are random. That assumption gives us equal opportunities (sounds like a term used by Laquanisha Robinson in suing Home Depot for its hiring policies?) in selecting an entry.

This assumption defends the claim of "fading is guessing," which you obviously dislike. This assumption also puts all other entries in the category of "guessing."

Let's stand on the side of faders and think for a moment: the trend goes up and stalls and stays there for a while and apparently in distribution and looks like overbought and it is clearly a major/minor resistance level and what I see is an imminent drop to the abyss and it is perched dangerously on the edge of a cliff...... In the eyes of a fader, it's a reversal signal.

The fader may be interpreting in different ways: double tops, triple tops, rounding top, candle sticks, moving averages, some kind of indicators (hence, technical analyses, plural form).

On the other hand, in the eyes of a trend follower, a distribution is perceived as "consolidation"=the stock is merely taking a breath and will resume its rally (in the case of an uptrend).

Therefore, a trader's distribution is another trader's consolidation.
 
Well, i like that. Congrats, when you said a consolidation is what a 'continuation" trader sees i am willing to shake hands. :)

My way of thinking as a trend follow person is quite simple. I see a move either way and immediately think "TREND". Ok, i see the momentum stall and usually will grab that profit with the intention to get back in with the trend because experience has taught me the odds say a continuation is in order. Since a consolidation sideways move is considered NORMAL i do not give fading a thought. Many good trends might not even show much consolidation at all, but will show a retrace. I do not consider a retrace, as long as it does not surpass 50% of the previous legs move a reversal signal where by that time many other newer players will be filled in the opposite direction and get hammered when the odds work in my favor and the trend continues on for another leg before repeating the whole process again. Yes, i do stay alert for a possible reversal signal which will nullify the TREND. But i never look to just fade a move for that singular purpose.

No signal is perfect, thats well known. As traders we find our own way. I prefer to trade with a crowd of like traders and in my world that means the odds are in my favor. If the odds were not in my favor, how else could i assume i was playing the same game? Fading seems to be a game the second stringers like to play because they have yet to fully understand the mechanics of trend following. If it works for you, so be it.

Ok, i adjusted your grade. :D Good answer as it will give some others fodder to consider.

PS: Cold also in Michigan, but not to bad. The Holidays are over and usually after the Super bowl is over winter gets very boring. This year we have the Winter Olympics. That will be great watching, especially here because we get Canadian TV stations also and Canada is not about bragging constantly about how fantastic their guys and gals are. American tv, even in sports is a lot of bragging up some idiot and waving the flag instead of a sporting event to enjoy. :eek:
 
Quote from bighog:



Ok, i adjusted your grade. :D
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Thank you, bighog.

To tell the truth, I find all of your posts very pleasing to read and think about.

Keep warm, another cold front is coming this weekend. :)
 
I wouldnt beat yourself up over this trade. Hindsight is always 20/20, if AAPL had held there and not broken down, you would have felt stupid for wanting to get back into the same stock because you butchered the first trade. If anything, in my opinion, the fact you hesitated the second time is a sign of maturity as a trader. Obivously, you want to take as many of your signals as possible, but in a situation like this I know I have gotten my hand caught in the cookie jar 1 too many times over the years. I always go back and look at my trades throughout the day, and find where i totally screwed something up, (like the first AAPL trade) and where i did well. The tendency is always to want to get back into stuff where you missed out on some profit, as opposed to wanting to keep trading the stuff where you bought the low, and sold the high, and nailed the trade 100%. This tendency is totally ass backwards. I know I have watched stuff where I get stopped out by 1-2 ticks off the high or low of the move, and I sit there watching the piece of garbage wasting a half hour looking for a set up just so i could get back in cause i felt bad for not having my stop 4 ticks higher.... The flip side of the the way this could have played out for you is usually much more costly then what you would have earned had you sold the breakout the second time.

I think that the one area where most traders make a mistake is by looking at the first trade, (where you made 15 ticks) and wanting to find a reason to trade the stock again. I am always EXTREMELY overcautious when jumping into the same stock the second time when i screwed up the first trade, I need everything to align perfectly to go in with normal size, and even if everything aligns perfect I dont go in max size, for the most part just for my egos sake I grab a few hundred shares just so I can say I caught the trade and didnt miss the whole move. I would be willing to bet that Over time I am a net loser when I jump into something after hitting it once and screwing up on it the first time. Obviously if you have an XYZ system where if three variables align, you take the trade NO MATTER WHAT, but from what I gather though you are somewhat of a discretionary trader who takes multiple trades and just have a variety of setups in your head. (this not including the automated stuff you told me about) Hope what I said makes sense.

Anyways good luck in the New Year, I have enjoyed talking to you, and watching your progress, see ya in the chatroom.

Quote from NoDoji:

Short AAPL @ 214.90 when a test of the HOD left a quick shooting star; trailed a stop pretty close near the MA in case the trend remained intact instead of a real reversal, hit for +$30. The MA bounce failed and then left another shooting star that I neglected to re-enter on, taking a break instead.

This turned out very frustrating. On one hand AAPL was swinging in a fairly narrow range, but the move I shorted was off a very mild intraday uptrend from the low of the range. So the reasonable options were to take profit right at the MA when support held there and then re-enter the trade, or trail a stop and hope for a quick breakdown, or take off half and leave the initial stop in play. This trade was later in the day; when these setups occur in the first hour they are generally stronger moves and not as much backwash because a true trend on the day has not yet been established. I also could’ve simply trusted the ride to stochastic oversold and ended up capturing a superb move to the downside. It’s very frustrating to take .15 cents of 3.70 of downside.

Later in the day considered shorting AAPL @ 213.25, when it was in narrow range consolidation, but I hesitated and it fell off a cliff again!

I really need to work on quick entries.
More...
 
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