NoDoji's Day Trading Log
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Had a nice run with the dog at the park, and returned to review my day, because it was somewhat of a landmark day in that I caught myself very early slipping into that "insane overtrading mode", and I stopped. I actually recognized a state of mind that's been detrimental to me in the past and I stepped away from the computer.
My first trade was solid as a rock, shorting a lower high during the early momentum move and exiting on a round number pivot near yesterday's close. This is where my tactic of using a 1-min chart to catch an opening move, combined with referencing my 3-day 15-min chart to choose a good exit zone paid off. Since the market was gapped up, I didn't expect price to break down yesterday's close; I expected buyers to test that round number as support, because that's what traders do when the market favors the longs and a low-risk long entry is reached.
I then tried catching various moves and the action at that point became choppy and indecisive, and anyone who trades AAPL & AMZN will agree that choppy action is NOT a recommended trading environment for these stocks unless you have an automated system handling it. After quite a few trades with tiny profits and tiny losses that, with commissions, started to eat into my opening gain, I stood up and actually talked to myself out loud: "One strong setup is worth far more than 50 little scalps. Take a break, leave the room."
When I returned, I saw that I missed a significant bounce off the market's test of support. A new high was put in and price was consolidating. In the past my first inclination would've been to start trading right away to "get" some of what I missed. Instead, I talked to myself out loud again: "There's already been a large move up from the low. Wait for a lower high and short. A lower high after a strong move like that will be a confirmed trade with an expected retracement of 35% of the total move up. This market's been selling every rally and price falls faster than it rises on average."
The patience paid off and I got the added surprise of a 50% retracement. It took the market just a couple minutes for price to retrace a move that took nearly an hour to build up.
So I was pleased overall with the day; I handled a few trades well and stopped myself when I realized I was about to repeat an old mistake.
Then I did repeat an old mistake. I let my previous trades (my P&L to be exact) and my position size influence a brand new trade. I shorted X on a pullback from a failed breakout through the HOD, leaving an approximate double top behind. My risk was small, with a .14 stop put in, but I was in full size (500 shares) and as soon as I saw green I moved my stop just near b/e, enough to cover commish and slippage. This thought actually went through my mind when I did that: "There, locked in! I am NOT going to lose one bit of my day's profit." Yet by doing that, I cut myself off from an additional $150 on the move that transpired.
Now, I ask all the seasoned professionals here to tell me that they NEVER do anything like that. Please convince me that this kind of madness will truly end some day!
My first trade was solid as a rock, shorting a lower high during the early momentum move and exiting on a round number pivot near yesterday's close. This is where my tactic of using a 1-min chart to catch an opening move, combined with referencing my 3-day 15-min chart to choose a good exit zone paid off. Since the market was gapped up, I didn't expect price to break down yesterday's close; I expected buyers to test that round number as support, because that's what traders do when the market favors the longs and a low-risk long entry is reached.
I then tried catching various moves and the action at that point became choppy and indecisive, and anyone who trades AAPL & AMZN will agree that choppy action is NOT a recommended trading environment for these stocks unless you have an automated system handling it. After quite a few trades with tiny profits and tiny losses that, with commissions, started to eat into my opening gain, I stood up and actually talked to myself out loud: "One strong setup is worth far more than 50 little scalps. Take a break, leave the room."
When I returned, I saw that I missed a significant bounce off the market's test of support. A new high was put in and price was consolidating. In the past my first inclination would've been to start trading right away to "get" some of what I missed. Instead, I talked to myself out loud again: "There's already been a large move up from the low. Wait for a lower high and short. A lower high after a strong move like that will be a confirmed trade with an expected retracement of 35% of the total move up. This market's been selling every rally and price falls faster than it rises on average."
The patience paid off and I got the added surprise of a 50% retracement. It took the market just a couple minutes for price to retrace a move that took nearly an hour to build up.
So I was pleased overall with the day; I handled a few trades well and stopped myself when I realized I was about to repeat an old mistake.
Then I did repeat an old mistake. I let my previous trades (my P&L to be exact) and my position size influence a brand new trade. I shorted X on a pullback from a failed breakout through the HOD, leaving an approximate double top behind. My risk was small, with a .14 stop put in, but I was in full size (500 shares) and as soon as I saw green I moved my stop just near b/e, enough to cover commish and slippage. This thought actually went through my mind when I did that: "There, locked in! I am NOT going to lose one bit of my day's profit." Yet by doing that, I cut myself off from an additional $150 on the move that transpired.
Now, I ask all the seasoned professionals here to tell me that they NEVER do anything like that. Please convince me that this kind of madness will truly end some day!
I'm reading Trading in the Zone now and he talks about how a trader needs to view each trade as a discrete event, unaffected by previous trades or the state of one's P/L for the day. So in that sense, you should have executed your final trade with a less tight stop.
But at the same time, the goal is to make money. And money is evaluated at the end of the day, week and month. And for someone whose results have been less consistent than desired, when sitting on a nice daily gain, I think it makes sense to trade a bit more carefully at the end of the day. Your bottom line needed the positive result and your psyche needed the confidence boost. There's nothing wrong with that.
Sure, when you're running good and you're in a groove and consistently making good trades and good decisions, then you can look at a missed opportunity like that and focus on how to not miss it the next time. But from the way it sounds, you needed a good win under your belt.
Consider it psyche management. Just as important as money management because it will affect how you trade tomorrow.
You need to take away the positives from an excellent day of trading and forget about beating yourself up over a missed trade at the end of the day. I bet I could look at the charts and find 10 other trades that you missed. It happens and it will always happen. Time to look forward to the next day's opportunities.
Congrats on a great day of trading.
But at the same time, the goal is to make money. And money is evaluated at the end of the day, week and month. And for someone whose results have been less consistent than desired, when sitting on a nice daily gain, I think it makes sense to trade a bit more carefully at the end of the day. Your bottom line needed the positive result and your psyche needed the confidence boost. There's nothing wrong with that.
Sure, when you're running good and you're in a groove and consistently making good trades and good decisions, then you can look at a missed opportunity like that and focus on how to not miss it the next time. But from the way it sounds, you needed a good win under your belt.
Consider it psyche management. Just as important as money management because it will affect how you trade tomorrow.
You need to take away the positives from an excellent day of trading and forget about beating yourself up over a missed trade at the end of the day. I bet I could look at the charts and find 10 other trades that you missed. It happens and it will always happen. Time to look forward to the next day's opportunities.
Congrats on a great day of trading.
Just want to add a few words as I see that there has been mention of Trading in the Zone - with some good comments from Osbourne.
NoDoji, I've been reading a bit your journal, particularly your last post about trading and emotions and I can't stress enough how beneficial that book would be to your trading. It was a cornerstone in my trading carreer, these are a few words to show how it relates to emotions in trading and the way you can work on mastering them to improve your results.
First, you probably know that but there is no such thing as protecting your profits because it could be the last trade for the day. If your strategy has a positive expectancy, your job is to flawlessly execute the plan. Going to one opportunity to the next and trading each of them regardless of your daiy pnl or the time of the day. Period. Emotions will affect your decision making process and will negatively impact your strategy bottomline. On the other hand, if you trade like a robot, like the strategy says on paper, then the profits will take care of themselves.
Now how to get there? Trading without emotion (or at least having them under control and as low as possible) is not impossible but it takes a lot of energy to get to that state of mind. Unfortunately being aware of a certain emotion (fear of losing, greed, ...) that kicks in while you trade is not enough because you need a much stronger mental force to counter it. The force that is needed is trust. Trust in your strategy, trust in yourself as a winning trader. Some think they have it, but in reality they don't. If you catch yourself tightening your stoploss to b.e. because you want to protect your daily pnl while the strategy says you should leave more room for the trade to develop, then you don't really trust your strategy because if you did you would know that whatever the outcome of that trade is, you're doing what is best for your equity curve over the long haul.
Acquiring that trust, that strength, is like getting rid of a bad habit and replacing it with a new one. If you want to stop smoking, you have to force yourself to accept a new habit, a new belief (be it a new image of you: a non smoker, replacing it with a new sport, etc...) and in the process of doing that, you unconsciously acquire a new, stronger mental force. The same applies to trading and emotions.
The book explains in details the above and gives the tools to get to the desired state of mind. There are probably other books/authors on this subject that are good as well, maybe others can make recommendations. I know this one in particular did a great job for me, so I hope this helps. Also, NLP visualization exercises are excellent before/during the trading day. Good luck with your trading.
NoDoji, I've been reading a bit your journal, particularly your last post about trading and emotions and I can't stress enough how beneficial that book would be to your trading. It was a cornerstone in my trading carreer, these are a few words to show how it relates to emotions in trading and the way you can work on mastering them to improve your results.
First, you probably know that but there is no such thing as protecting your profits because it could be the last trade for the day. If your strategy has a positive expectancy, your job is to flawlessly execute the plan. Going to one opportunity to the next and trading each of them regardless of your daiy pnl or the time of the day. Period. Emotions will affect your decision making process and will negatively impact your strategy bottomline. On the other hand, if you trade like a robot, like the strategy says on paper, then the profits will take care of themselves.
Now how to get there? Trading without emotion (or at least having them under control and as low as possible) is not impossible but it takes a lot of energy to get to that state of mind. Unfortunately being aware of a certain emotion (fear of losing, greed, ...) that kicks in while you trade is not enough because you need a much stronger mental force to counter it. The force that is needed is trust. Trust in your strategy, trust in yourself as a winning trader. Some think they have it, but in reality they don't. If you catch yourself tightening your stoploss to b.e. because you want to protect your daily pnl while the strategy says you should leave more room for the trade to develop, then you don't really trust your strategy because if you did you would know that whatever the outcome of that trade is, you're doing what is best for your equity curve over the long haul.
Acquiring that trust, that strength, is like getting rid of a bad habit and replacing it with a new one. If you want to stop smoking, you have to force yourself to accept a new habit, a new belief (be it a new image of you: a non smoker, replacing it with a new sport, etc...) and in the process of doing that, you unconsciously acquire a new, stronger mental force. The same applies to trading and emotions.
The book explains in details the above and gives the tools to get to the desired state of mind. There are probably other books/authors on this subject that are good as well, maybe others can make recommendations. I know this one in particular did a great job for me, so I hope this helps. Also, NLP visualization exercises are excellent before/during the trading day. Good luck with your trading.
SOMEONE please explain to me why all wanna be traders and new traders are so preoccupied with reading trading book?
Where are the tradign records of the authros.. LMAO!!!
Books are for learning about the markets and the players in the game... but they do not teach you anything about trading..
if this was the case.. all pilots would read a book and be ready to fly!!!!!!!!!!!!!!!!! bullshit and beign a pilot si way easier than a trader.. there are very few unknowns when you are apilot.. there are millions when you are a trader...
put the books down and open the trading screens.. study charts.. study news..study history.. study human behavior.. put sop reading books that will teach you nothing about trading..
Where are the tradign records of the authros.. LMAO!!!
Books are for learning about the markets and the players in the game... but they do not teach you anything about trading..
if this was the case.. all pilots would read a book and be ready to fly!!!!!!!!!!!!!!!!! bullshit and beign a pilot si way easier than a trader.. there are very few unknowns when you are apilot.. there are millions when you are a trader...
put the books down and open the trading screens.. study charts.. study news..study history.. study human behavior.. put sop reading books that will teach you nothing about trading..
Wannabe trader? you got the wrong man here, mike. Now looking at your different posts, I think we all know who is the wannabe trader here.
I have no idea what Mark Douglas's trading record is (do you?) and I don't care. All I know is that his book is efficient when it comes to learning how to control emotions in trading. Period. Does it require an international champion tennis player to teach you how to play good tennis and train you to win the local tennis championship? Hell, no. Your logic is flawed.
Wrong. Nodoji's issue and the following posts are all about learning about ONESELF while trading. Not the markets, not the players. Please read the posts next time before you jump in and make an ass of yourself like you just did.
No extra thousands hours of studying the market will improve your trading results if you don't have the appropriate state of mind for trading, ie without emotion. It's quite the opposite actually: more studying, more trading with the wrong psychological habits will just reinforce them. That means more overtrading, more mistakes, more losses. That's what losers do.
Given your aggressiveness, narrow minded approach, I would bet that it's probably your case and the root for your negative attitude. Good luck.
PS Nod, sorry for these couple unnecessary posts, back to your journal.
I read the book last year, and thought it was very good, but I was still in the mode of experimenting with trading strategies, and also finding methods of risk management that I was comfortable with, and so I hadn't yet gotten to the core of what would hold me back in trading.
Quite recently, my growing frustration reached out and whacked me over the head. "You have an edge," it said, "And you have good risk management, yet you continue to repeat mistakes over and over and over, the worst mistake: cutting winners."
So a couple weeks ago, I dug out "The Zone" for the 2nd time and just finished it yesterday. It really impressed me the first time, but this time it was like reading a whole new book. I really got it this time. I realized that if I'm going to truly assume the trader's mentality, I have to talk to myself out loud every day. I have to visualize great trades from start to finish. I have a really good visual memory and I've been closing my eyes, seeing the charts in real time, watching the juicy setups, accepting the cost of admission to the trade, acting quickly to reduce the cost, and waiting patiently as price moves to a decent target. I do this a LOT now. I remembered when I was learning to play guitar, I'd visualize myself playing when I wasn't around a guitar, I'd practice on a desk or chair while I was in school. Same thing with trading now. Practicing in my head all the time. It's only been a few days, but I think it's starting to work.
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