NoDoji's Day Trading Log

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Quote from retire45:

I never knew you kept a journal here! Since lately I try to avoid ET as much as possible no surprise.. A brave thing I tell you... a public journal. One benefit I have gained from ET is knowing I am not alone in the emotional battles of trading.

Have you attempted the Douglas exercise of 20 trades in a row, taken no matter what?? I can't get to 5..! I think it has to be one of THE best exercises one can try as banishing you mental expectations and forecasts are key to emotional freedom, which is in turn the key to consistent profits. Not mentally accepting the cost to see if a trade will work is at the core of my trading troubles, next to impatience.

After your winning streaks the only reason I can imagine you lose is great setups simply don't occur that often and when you don't maximize the ones you get it becomes complicated to remount without falling. This happens to me so often I am close to simply accepting it as the way I am.. forever.. but then I would have given up..

This is THE only explanation. Consistently trading only great setups is bound to produce great result even with not so great trade management as such trades tend to work immediately. I once knew a guy that traded quite often without stops and was simply brilliant.. My trade management has not changed much in the past year yet my results suffered badly as I became very unselective (that a word?). It is simply amazing how good set-ups work.. No set-up no trade!

I'll be watching!
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The problem at least for me , is establishing a "great" setup.

There is a great deal of disagreement of what indicators to use to establish, entry and exit points. Currently I use MACD Lines, STOCH, and RSI.

I wait for the Stoch to cross below the 20% line, and reverse, The MACD to do the same and at least begin to flatten,. MACD is a lagging indicator, "crossovers" for the most part come to late.

Obviously I follow trends, I use a line chart, never got the hang of candlesticks. I use 1, 5, 10 minute charts for daytrading.

I follow news, mornings have been very sketchy lately, lots of trend reversals. I did get "bit" recently by being to cocky.

Its difficult to find consistency!
 
+ $450

Short HANS @ 36.40 on open. I was extremely patient in this trade, and covered @ 36.07 oversold near the round number for a $165 gain. Turned out to be .02 cents from the bottom of the move. Although I regret not adding to this position on the morning run up, the exit on this trade could not have been better.

Short ORLY @ 32.60 on open. Added to it later for an average price of 33.21. Holding for a pull back below 8-period SMA on the daily chart.

Offered $36.40 HANS and it missed fill by a penny. I would’ve jumped in at market, but was watching other charts at the time and missed it.

Short HANS @ 36.20 and added @ 36.46. I jumped the gun a bit on this one, not waiting for maximum overbought (%K stochastic was still climbing). Covered partial position @ 36.30 pivot from oversold for a $154 gain. Covered remaining position @ 36.02 oversold near round number for a $92 gain.

Short HANS 36.17 overbought, pullback from lower high. Target of 36.02 filled for a $75 gain. That 36.02 was the exact bottom of the move.

I want to thank Bob (1R) for a recent Aha! moment I had after he discussed the issue of taking profits too soon with another trader. He said something along the lines of, “You have to hold longer than it feels comfortable to hold.” That really struck a nerve with me. I was always closing my positions early, while he held on for greater gains and I finally did that today with my opening HANS trade. The fact that it ran against me made it especially difficult to do, because I think we all tend to exit much closer to break even after a trade has run against us than we would have if it had gone immediately in our favor. I really allowed this one to run the full course and it paid off with max profit on the trade.

By the way, SteveGee pinpointed a nice setup on GS late today and I delicately advised him to put on the trade on my behalf, because I still could not bring myself to do it. “DO IT!!!” is what I said.

Now he can buy a real dinner with his real profits, while I eat paper again.
 

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Hi ND and thanks for the HANS chart! You traded HANS from the short side today despite the bullish market bias. What was your idea behind that and where was your SL at the initial HANS trade?

Much thanks in advance!
saico
 
Quote from saico:

Hi ND and thanks for the HANS chart! You traded HANS from the short side today despite the bullish market bias. What was your idea behind that and where was your SL at the initial HANS trade?

Much thanks in advance!
saico
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saico, HANS moved forward to test and break through recent highs yesterday on (I believe) news of some new drink geared toward women. Being a woman who would never fall for that crap, I naturally wanted to short the stock. :D

OK, seriously: HANS is very overbought on the daily chart, and has pulled quite far from its moving averages. These conditions conspire to invite a pullback to the moving averages. Look at a 1-year chart and see how the price pulls back to the 200-day SMA each time it rallies to an overbought condition. Therefore, when the market rallied this morning and HANS joined in, I was comfortable putting it on as an intraday or a swing trade. That means when it ran against me, I was not worried, and in fact would've added to the position around 37.00 (it was close and I regret not adding). My trading plan on stocks fulfilling these criteria is to add to the position upon a break through resistance to a new high. Most of the time there is a pull back within a few days and I can take profits.

However, we must always have an exit plan. My stop loss plan is if the price then rallies to yet another new high, I will begin scaling out of the position on the next pullback. This leaves me with some of the position on in case it retraces as originally expected.

Now I took losses on some trades this year using this strategy, yet each of the trades would have been extremely profitable if held for a slightly longer time period. My account is small, though, so I felt more comfortable taking the losses than tying up my capital day after day.

HANS gave profits nicely today, and I was very tempted to put on another position at the end of the day, but ORLY held strong, and since I'm holding it for the larger retracement, I chose to keep a good part of my capital free for tomorrow's opportunities.
 
Quote from NoDoji:

saico, HANS moved forward to test and break through recent highs yesterday on (I believe) news of some new drink geared toward women. Being a woman who would never fall for that crap, I naturally wanted to short the stock. :D

OK, seriously: HANS is very overbought on the daily chart, and has pulled quite far from its moving averages. These conditions conspire to invite a pullback to the moving averages. Look at a 1-year chart and see how the price pulls back to the 200-day SMA each time it rallies to an overbought condition. Therefore, when the market rallied this morning and HANS joined in, I was comfortable putting it on as an intraday or a swing trade. That means when it ran against me, I was not worried, and in fact would've added to the position around 37.00 (it was close and I regret not adding). My trading plan on stocks fulfilling these criteria is to add to the position upon a break through resistance to a new high. Most of the time there is a pull back within a few days and I can take profits.

However, we must always have an exit plan. My stop loss plan is if the price then rallies to yet another new high, I will begin scaling out of the position on the next pullback. This leaves me with some of the position on in case it retraces as originally expected.

Now I took losses on some trades this year using this strategy, yet each of the trades would have been extremely profitable if held for a slightly longer time period. My account is small, though, so I felt more comfortable taking the losses than tying up my capital day after day.

HANS gave profits nicely today, and I was very tempted to put on another position at the end of the day, but ORLY held strong, and since I'm holding it for the larger retracement, I chose to keep a good part of my capital free for tomorrow's opportunities.
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Donna: If I am reading your chart correctly, RE: your initial short, prices went up quite a bit, before they came down? It would have seemed to pass a 1% stop?

Initial short at 36.40, seems like it went up quite a bit, before it came down?

Re adding to a position, I have been told it can be risky! But its been working for you so what do i know!
 
Quote from pstallone:

Re adding to a position, I have been told it can be risky! But its been working for you so what do i know!
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I have heard here recently that "Dollar Cost Averaging works...except for when it doesn't. And then it really doesn't"!

Sums it up pretty nicely.
P.S. I hate being sick :(
 
Paul, yes it went up to 36.96, but with only 500 shares, it was not a large drawdown.

And, yes, fading a strong move (counter trend trading) is no doubt risky and I just read yesterday in Alan Farley's book that traders should not try this at home until they have a lot of experience with more traditional trading strategies.

However, when I first started day trading I latched onto a particular trader in the ET community, watched what he was doing, liked it very much, and have become accustomed to trading this way.
 
Yeah, dollar cost averaging is risky, it has worked for me to, but someone once said, when your in a hole quit digging!

It depends on how risk adverse you are.

Sometimes, I calculate how many total shares I will risk, and go in increments. Rather than all at once.

250 in, wait 250 again etc.
 
Guys, your recent posts got me thinking deeply (don't worry, that burning smell should clear soon) about averaging a position when fading vs. keeping a tight stop and looking for a better entry. This has nagged at me a lot. When I short a stock that's not at or near major resistance, I'm very conservative in my stops. But when it's near major resistance (9-month to 52-week highs), I average the position and allow a larger drawdown before becoming concerned.

The reason I do this is because we're in a bear market and when price pulls far from the moving averages and becomes overbought, the correction is generally strong and fast. I'm well aware that in a bull market new highs are simply an invitation to buy more. But if you look at the high flyers in late 2008, the stocks that did well and pulled far from their moving averages hitting new 52-week highs (APOL, AFAM, HOTT and IDCC for example), they all had major corrections once overextended.

However, I'm leaning toward implementing tight stops on all my trades, even these special setups, because I believe that if I condition myself to ALWAYS adhere to specific risk management, no exceptions, I simply cannot fail.

For an awesome journal that demonstrates the power of strict risk:reward trade management please check out Geez's thread: http://www.elitetrader.com/vb/showthread.php?s=&threadid=148752&perpage=6&pagenumber=1

He works full-time and often doesn't have the opportunity to manage his trades in real time. Yet he's up over 10% this year. There's a strong lesson here for the full-timers: There's no reason to experience a net loss day trading.
 
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