One Trade at a Time

C

Chris_Anonymous

Hey ET. Okay so here's why I'm starting this journal. I've read many threads on here, including NoDoji's journal and Anekdoten's journal. I've always figured I could learn to trade on my own, and who woulda thought, the more money I lose, the more willing I am to change and realize I might need more help than just my own self.

So here's where I'm at. Pros and cons. Cons:

Today, I had the largest drawdown since I started trading (-379.01). This was due to trading larger volume than I'm used to, and not waiting for good setups.

I'm not following my rules/system completely. I still overtrade at times, don't always take good setups, and every now and then I try to "win back my losses."

I have a giant ego that tells me I don't need to write this because I'll "get it" without any help.


Pros:

I'm halfway through <i>Trading in the Zone</i> as I write this.

Intellectually I know how to trade trends and S/R.

I've gotten glimpses of being in the zone and what it's like to trade successfully.

I set stops to keep my per-trade losses to a minimum.



Obviously, I have a lot of work to do. This is my attempt at sticking to my system. I'm going to explain every trade I take and I'll post whether it was profitable or not. If not, I'll attempt to explain what I did wrong. I feel that by doing this I'll also slow down and not rush into trades.

With the exception of the downers on this forum, all feedback is encouraged. Especially from successful, wise traders!:)
 
Also,

I'll fill everyone in on the basics of my system.

I guess you could call me a momentum-based trader. I'm currently looking at higher-priced stocks, some of which trade large volume, but all that have lots of momentum (CF,AMZN,RL,CAT,etc.)

At this point I don't incorporate a daily profit target. I could use some input on this. Set a target of something like $0.40 per day in moves? Or $100 per day profit? Or just restrict myself to good setups and practice not taking any others?

Also, I'm going to post my daily P&L from now on. This way I'll have nothing to hide, and hopefully it'll help me stay humbled.
 
I was sim trading profitably for several months using ThinkOrSwim before I began trading live but I'd like to begin sim trading again. Is there anything you recommend more than ThinkOrSwim?
 
It might be more beneficial to set a daily loss limit (at which point you stop trading) rather than a profit target (which you can't really control).
Besides, if you've got a hot hand, why cut yourself short? Also, the target will probably put unnecessary pressure on you, which undoubtedly lead to bad/forced trades.

Also, if you do pick a daily target, how do you arrive at it? Is it some nice round number you pick out of the air ($100/$500, etc) or something quantitative?
 
Quote from TheGoonior:

It might be more beneficial to set a daily loss limit (at which point you stop trading) rather than a profit target (which you can't really control).
Besides, if you've got a hot hand, why cut yourself short? Also, the target will probably put unnecessary pressure on you, which undoubtedly lead to bad/forced trades.

Also, if you do pick a daily target, how do you arrive at it? Is it some nice round number you pick out of the air ($100/$500, etc) or something quantitative?
More...

TheGoonior,

Good point. I think I try to compensate for lost money when I set a daily profit target. Rather, if I am out $100 or $150 for the day, not allowing myself to take any more trades enables me to reset my thoughts and leave behind any negative emotions.

From here on out, I'll be using a maximum loss of $100 per day.
 
I've learned a new lesson. I'm a guy who likes action, and that translated into using a tick chart. I've heard others say it before but there are just too many false signals with ticks and 1-minute charts.

<b>(-16.85)</b> My first trade was 100 shares of CAT using the tick chart. It broke out of resistance at 10.32 and I didn't get an entry. I entered too late at 100.80, and got stopped out at 100.62. Using a 1-minute chart you can see it's the 9:45 candle that I bought the top of.

<b>(17.00)</b> My second trade was profitable. I shorted 100 shares of AMZN at 190.89 and covered at 190.72 on a stop. Still using a tick chart. Still not right.

<b>(-18.00)</b> My third trade was another 100 share short on AMZN. This time at 190.50. Stopped at 190.78.

<b>(-12.00)</b> My last trade using the tick chart was with CAT again. It was unprofitable because the tight stop I use for a tick chart is wayyyyyy too tight for a high-priced stock like CAT. I liked tick charts because they move so fast but it's really just looking at the tree, not the forest.

As I look at the time of the entries and the fact that I'm using the tick chart, I realize that I just like the action. Fast-paced action is going to get me killed as a trader.

<b>(36.00)</b> My final trade so far this morning was using the 5-minute chart for CAT. Doing what successful traders recommend actually works! I bought 100 shares at 101.32. The entry was late in the trend but it worked. I sold at 101.68 which I thought was a good exit, but I'm now seeing the price move up as I write this. (just after 10:30am est) I guess obviously I still need work on letting profits run!
 

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<b>(-1.00)</b> Entered another trade as CAT bounced off of a resistance point at 102.25, just above yesterday's close. I shorted at 101.83, set a stop just above resistance and set a target at 101.50, as I had to leave for a brief time.

I let myself get distracted by the 1-minute chart again and instead of letting my trade run its course, I exited for a dollar loss as I saw new highs being made on the 1-minute chart.

I'm thinking maybe it's better to get rid of the 1-minute chart completely?

I suppose the simpler the better.
 

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Okay so I've had the whole weekend to study charts and I've decided exclusively to stick with AMZN and SPY. After printing out as many 5min intraday charts as I could for AMZN, I believe I've come up with an unrefined "edge."

<b>(-60.00)</b> My first trade was a dumb mistake. 300 SPY. As soon as Ishorted it, I had a bad feeling about it. The 10:05 candle had a low of 129.64 and when the 10:15 candle broke below that level I was filled. I set my stop at 129.80, just above the 10:15 candle's high. Anyone who looks at the chart can see I was stopped out on the very next candle. I'm not so good at breakouts. I should wait for confirmation.

<b>(129.00)</b> My second trade so far today was with AMZN. The 10:25 candle was a swing high and the next candle couldn't break above it, so I shorted below it's low. I covered for a profit at 188.20.

Lessons learned: Stick to my rules! I have a profitable edge, even if it is unrefined. I can work out the kinks with time. I had a level head on my shoulders today but I still got anxious and covered too soon. I need to work on letting the profits run.

If I can let go of all expectations and fears, I think I'll be more successful. :)

P.S. I have an appointment today so I'm done trading for the day. I'll be back for more tomorrow ; )
 
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