NoDoji's Day Trading Log

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NoDoji


Registered: May 2008
Posts: 1252


05-19-09 09:01 AM



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Quote from bighog:

Scalping causes a single bad trade to wipe out a bunch of profits, effort, confidence and courage to move the trading to a higher level.
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I disagree. Now that I'm on a platform that even makes scalping possible, every trade I put on will begin life as a potential scalp (I use a tight stop based on invalidation of the setup, and I lock in a small profit as soon as presented, so I'm playing with the market's money, not my own.) _END_


Well i can see where you would disagree with my sentence if it is read as an all in one conclusive statement. But in the real world there is more inside than meets the eye.

Getting back to your post you said you take profits to early. I said that is because of a bad habit which seems to come from "fading" a move rather than going for the setup of a move to another level.

What i visualize in your taking small profits and missing the "best" part is because you are NOT looking for the "best" (best is used in place of meat because you do not like meat ). You seem to be looking at where and when price starts to lose momentum and that is your signal to fade. That is saying you do not believe the move at all and are willing to just get in on the retraces of the prior move. That is a bad strategy because retraces are normal and at best unreliable to trade until the 50% mark is touched.

Ok, back to the discipline part about scalping small profits in a game of chance. "Easier said than done". I revert back to my statement.............. How often do we see a bunch of small scalps wiped out by a single lapse of discipline? Throw in a couple instances of a news event that does not allow a well disciplined trader to get out at the desired price and gets their head handed to them on a platter. Takeovers when short, takeunders when long, fat finger errors, etc , etc.

The scalping mentality is flawed because it does not force the trader to focus on the "BIGGER" picture, it puts the trader in a mode of disbelief and contrary to what the majority of players are aiming for. Scalping forces a trader to play "AGAINST" the odds of the game.

EXAMPLE: A trend in place tends to continue rather than reverse unless a change in sentiment occurs. Since retraces are normal they do not constitute a change in sentiment thus the odds say the trend will continue.

Retraces are nothing more than mkt noise, they are like recess time in grade school, time to hit the can for a whizz, reload with more ammo for the next leg, get a drink of water, etc. etc.

I congratulate you on good discipline, that will keep you from losing. Now you need to concentrate on a strategy to load up the bank account. Directional trades with continuations, thats what we all want. Why not you?

PS: nod, at best you are looking to be trading ranges, thats a step up. next step up is directional trading, thats the gravy train. :)

EDIT: NihabaAshi


Registered: Jan 2002
Posts: 3753


05-19-09 11:20 AM



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Quote from hairdresser:

What is it that people always want to trade counter trend on ET?
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It's not that they want to trade counter-trend...

It's that they have reason (although incorrect) that the trend has ended or is taking a pause (pullback).

Then if the trade fails and trend resumes...

That's when it is observed that the trader was counter-trend trading.

However, if someone KNOWS they are counter-trend trading prior to entry...

They should use tight stop/loss protection, reduced position size along with smaller profit target due to the fact that they are most likely trying to catch a retracement prior to the trend resuming.

My point is that there are two types of counter-trend traders...

* Those that know the trend will eventually resume...they know this prior to entry and are only trying to catch a profitable retracement.

* Those that thought the trend has concluded to only find out in hindsight the trend has not concluded.

Mark

Mark


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maxpi


Registered: Nov 2002
Posts: 4716


05-19-09 04:45 PM

Counter trend is where price is trying to jam it's way through some sort of congestion or into an area where lots of people don't want it to go.... hairdresser should be able to relate.....




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- $36

Traded very small size today, 100 and 200 shares because I wanted to master managing multiple trades with the DOM, and wanted to try out various strategies; I traded anything that moved to get a feel for the various tactics I wanted to try out.

The main stocks I traded were ASIA, CYH, GIL, and URS, taking different kinds of setups and trying various exit strategies. I did make two mouse-click errors, one cost me and the other made me a bit of money. I finally figured out two things I’ve been doing wrong, and after those early errors I had no more problems.

My biggest regret today was early on STEC made a run to test yesterday’s high and I offered 16.24, a penny under that high. It hit 16.20 and fell quickly. I didn’t chase, and really regretted not jumping in even after it dropped .20 cents.

Interestingly, I realized that the strategies I used so successfully in the first quarter this year are ideal for me, and I will be going back to that with the slight modification of rock solid risk management. :D
 

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+ $59

Today I decided to only take my strongest setups and it paid off with 5 out of 5 positive trades. Traded 100 share positions and made no order entry errors for a change.

I’m still moving stops too soon and too close, leaving a lot of profit on the table as a result. On one trade I trailed a limit and also was too close, not moving it quick enough to take advantage of the further drop in price.

I’ll take another day tomorrow with small size working on ideal trade management and get back to my usual size next week.

Trades today (all short):

ASIA +$8

CYH +$15

INTU +$8

QLGC +$9

UHS +$19

Also bought ASIA June $20 puts end of day for $1.10.
 

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Nod

You need to regroup and rethink your stratagy. I have been trying to convince you that your plan is flawed. You yourself have backtracked on your trading because you have lost confidence with your plan. Do not be discouraged though because i would bet the farm 99% of new traders have traveled that same road and put the car in reverse and went back to the fork in the road and changed direction.

No one ever said the road first traveled is always the correct one. I was not going to post in this journal for awhile and was just going to watch but decided to post this message before the long weekend to give you some food for thought.

Rethink why you are willing to take large risks for small profits. I fully understand you seem to have risk under control, BUT, do you have it under to much control? To much risk control works both ways. Frustrating to get out of a winning trade to soon just to ring the register or avoid a loss. Trades need room to work, thats a fine line we all struggle with in early trading.

Ask yourself a question: Am i so concerned about not losing is it not allowing me to allow the trade to work? Am i missing the bigger picture by having so little confidence in my plan? Should i do less trades for more? Should i quit thinking it is easier to take tiny profits from otherwise good trades because i feel good taking any profit? Should i keep thinking if i can perfect scalping and can make a lot of money be perfecting a flawed strategy by increasing size later?

Should i ask myself this question: How can i expect to make more money with larger size later if the strategy itself is not changed?

Should i trade for whole numbers or continue to scrap fractions off of an otherwise good trade?

Hang in there nod, but change the strategy, the one you are using has not been working. Thats the good news, the bad news is you need to tell that to yourself.

Have a good day, good long weekend and take a step back to visualize where you need to make some changes. Visualize success, visualize the ball inside the goal, NOT bouncing off the posts and not going in. You are close but need to move a few players around.

PS: might i suggest you follow this thread..........from amt, inventory alert grab.... levels, thats what you shoot for. Regardless how you visualize price getting to the NEXT level thats what you want to shoot for. Trading is about anticipation and speculation, visualize the price traveling to your level before entering.
 
Thank you, Hog, for you post. You make many valid points. I am guilty of trying to lock in profits too quickly instead of leaving my original stops until the trade plays out. I no longer risk much on my trades. I enter the trade when it sets up and place stops where the trade would be invalidated.

My biggest problem (still) is only taking a few of my setups each day. Trading is a probability game, and I need to stop picking and choosing (which means I'm thinking and forming expectations), and just put on every trade that sets up.

Here's an example: I had four setups at once this afternoon: ARO, BUCY, GIL, and YUM. I chose one of them, even though with the position size I'm trading this week I easily could've entered all four. All four were profitable off the bat, but the one I chose was the slowest moving and turned out to be least profitable of the four. So I end up thinking, "Why did I have to pick that one?" I didn't have to pick; nothing prevented me from trading all four except my own laid back approach.

(Like Hermit, I did have an excuse today, though; platform freeze every half hour it seemed. :p)
 
+ $84 Day
- $279 Week

We have two internet providers because last year we discovered that every time it rained, Comcast internet would die. Not good for day trading. So we added Qwest last fall as a backup and it’s worked pretty reliably for quite a long time. Yesterday and today it’s been raining and of course Comcast was down, that was expected, but then Qwest was losing it too, leaving me with constant lost connections. Qwest repair arrived late in the day and hopefully repaired things.

So, ASIA puts opened higher and I bracketed an order with a stop @ 1.25 (didn’t want a profit to become loss like I did back in April with NFLX) and a target @ 1.50. The price spiked suddenly taking me out for a mere $54, before moving just past my target.

Short STLD @ 13.26 pullback from a lower high, stopped out @ 13.31, just above the lower high: -$16.

Short GIL @ 15.88, pullback from a lower high, stop just above the lower high. Price action stalled and found support around 15.85, and I no longer liked the trade, so I covered @ 15.84 and somehow ended up long half a position which I set a stop on, and the whole thing ended up exactly b/e.

Just about to short ARO @ 34.17 and internet went down. Got connection back a few minutes later and it had already dropped over .30 cents, so I did not chase, because although it was near major resistance when I went to short it, it was at the 20-period intraday moving average when I got connection back and if the uptrend was intact this would be the “bounce price”, which it was.

Later scalped a bit of ARO, short 33.94, covered 33.88: +$10

Short YUM @ 34.34, pulled back from a new high, covered @ 34.27 when it found support at the moving average line telling me the uptrend was still intact: +$12

Was about to short YUM again @ the same price when it again failed to break higher and lost internet connection again.

Short YUM @ 34.28, covered @ 34.20, moving average support: +$14

Scalped GIL on the 4th failure to break 16.00. Short @ 15.99, covered @ 15.87, which about the entire move: +$10

Tried to short OGXI, no shares available with either broker.

Short BVN at the close @ 28.64.
 

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Hi NoDoji, I know that you are primarily a day trader but wonder if you looked at or had a thought on the (I think) topping tail hammer on the SPX daily chart (Tue or Wed). For an intermediate (weeks may be summer) it looks like the SPX has made a top. Failure to go over the last high. Two weeks with 3 or more red days....etc.

Do you look at over-all market conditions and longer term time frames?

thx and good trading. RR
 
Quote from RichardRimes:

Hi NoDoji, I know that you are primarily a day trader but wonder if you looked at or had a thought on the (I think) topping tail hammer on the SPX daily chart (Tue or Wed). For an intermediate (weeks may be summer) it looks like the SPX has made a top. Failure to go over the last high. Two weeks with 3 or more red days....etc.

Do you look at over-all market conditions and longer term time frames?

thx and good trading. RR
More...

Yes, topping tail on Wed ("shooting star" was my usual term for this until BostonKiller introduced me to the delightfully descriptive "F.U. candle"), and a lower high from May 8th.

Longer term you'll see that this is actually the 3rd lower high from early November's failed bounce, with March lows being a lower low, maintaining an intact downtrend overall of lower highs and lower lows.

A bull market is based on economic growth and there is still fallout to come from last year's blowup.

If you're looking for longer term plays, short the rallies, IMHO.
 
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