Quote from macattack:
How many trades do you make on a typical day? How long do you wait between trades sometimes? Are you able to just sit there for multiple hours and wait if you don't see one of your setups?
What goes thru your mind when you see a huge move take place that you are not part of? I can't stand it when something I've been watching for an hour or longer just takes off big time and I'm not in it. It seems like the move is just relentless and is never going to end. I have to admit I usually lose my patience and discipline when this happens and I end up losing money. How do you deal with that in your mind when it happens?
On my most profitable days I take 1 to 8 trades. My biggest losing days over the past year (not counting my string of order errors and rogue positions while learning to use IB after switching frm Etrade), I believe I took anywhere from 40 to my all time record the other day of 110 trades.
Sometimes I wait hours between trades, but I sometimes sim trade during those down times just to test additional strategies. I'm also a guitarist and keep my Strat right next to me; I can't tell you how good I've gotten since I started day trading.
I've honed my strategy in sim to the point that I could effectively be in a trade at all times during the first 2 hours, but I haven't started doing that live yet. I've been picking and choosing trades and long/short bias, when in fact the first hour of the day generally includes at least 2 good strong moves long and short before a trend or a range is established. Yesterday I shorted AMZN right off the open on weak price action, and I missed an even bigger stronger move to the long side by not reversing my position after the drop.
I admit I feel some frustration when I miss a strong move. I returned to my desk late yesterday and the market had made another new low and about the time I sat down, it made that final push to 1040 (ES) and as that happened the price action had that "panic" look to it, but it held up. That is very strong reversal signal. Support was established and since the market had fallen so far and it was late in the day and all the reaction to the news was on the table, the path of least resistance now was a strong bounce. The big boys would be coming in for bargains and I've seen how strong the reversals are in the last hour of a strong trend day when the institutions make their moves.
But because I'd just sat down after being away, it didn't really register strongly in my mind to watch for the upside break through the previous support level (which I believe that was around the 1045 zone). Suddenly it happened and I was watching AAPL at that point and AAPL took off. All I had to do was jump in. When that buying volume hit and AAPL took off, there was nothing that was gonna stop it. But when it had moved almost .80 cents without me, I kept waiting for a pullback to enter. There IS NO PULLBACK in a strong move. You have to jump on the train!
At one point in my trading life I would've been trying to fade that move, but I learned how powerful end of day reversals are because they have the power of the institutional investors behind them. So I've come a long way from the days of trying to jump in front of a freight train. But I haven't yet learned to quickly jump ON the freight train. I often do it in morning moves, but I miss huge opportunities in the afternoon moves.
It's especially frustrating when I've stared at a stock that's been in consolidation during the doldrums and I've been watching it for nearly an hour, sometimes longer, and the breakout occurs without me. All it takes is a buy stop and sell stop just outside either side of the range, but I never do it.
So these are mountains I've yet to climb. Tell you what, though, it's a very good feeling to have risk management as second nature to me now as looking both ways before crossing the street.
