Something many people have suggested to me is to find a stock that I can trade exclusively and get to know it very well. I chose AMZN because of it's high volume and quick moves. I can sometimes catch a move of one dollar or more. So far so good, I can already see the benefits of getting to know one stock real well as opposed to trading many that I don't.
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Prop Trader Journal
- Thread starter Shanb
- Start date
Sure you can find one stock and trade it. Problem with that is you are not always guaranteed good movement. All the technical BS people follow works best in trading in-play stocks. The patterns and levels formed are created by real buying and selling, not program noise and a few day traders.
If you trade a ascending triangle in a dead stock, you'll get a small move if your trigger is hit. Often the better trade in a dead stock is to go against the pattern, because there is no energy to push it.
In a stock that thousands and thousands of traders are watching, a pattern has a better chance of following through.
In FNSR today, the low was 13.91 or something.
As I said before, when a stock is down over 10%, I wait for the bounce. The bounce is the play, because real selling will eventually slow, buyers will step in, and shorts will get squeezed. Morning volume broke the 14 level, but it held the 90s. It then bounced 50 cents. It returned to 14. Unable to break, that was your buy, with your stop at 13.89. If a stock can't make a new low by 10:30, more often than not the thing is not going to trend. Right there, you know you should play the bounce. Target A 14.40, Target B 14.90. Then if FNSR breaks 15, you'll have another squeeze, in addition to any value buyers chasing the price. Could have rebought, with lighter size and a tight stop.
However, you also want to look for the short. If FNSR held 15, you'd be looking to short with your stop above 15. I would have taken that trade at first. I would have expected 15 to hold. And for some time it did, however, the 15 short only would have produced 20 cents or less, and that would not have been the target. However, your risk reward of 5 cents or less makes it too compelling not to take.
FNSR had a huge buying rush after the 15 break. After so many positive candles, and after a run away from the moving averages, you expect a reversal. FNSR did just that. If you didn't catch the top via level 2 analysis, you could have used the charts to enter a short after it made a lower high after the 15.50, which produced 15 cents.
Looking at the chart, FNSR looked like a great stock to be watching. It behaved well..
Next, take a look at JDSU. Double bottomed in the morning, giving a 50 cent move. Buy the hook up as the double bottom showed signs of formation with a stop just below lows. Again, if the stock isn't going to make a new low in the morning, it probably will not trend. JDSU had MORE of a reason to bounce than FNSR as the FNSR news does not guarantee trouble for JDSU. Target of 15.75 and 15.90. After the bounce, you look for a short. And it came, as it made a lower high around 16. Targets of 15.75 and 15.50.
Both stocks behaved great for anyone who just read the tape.
If you trade a ascending triangle in a dead stock, you'll get a small move if your trigger is hit. Often the better trade in a dead stock is to go against the pattern, because there is no energy to push it.
In a stock that thousands and thousands of traders are watching, a pattern has a better chance of following through.
In FNSR today, the low was 13.91 or something.
As I said before, when a stock is down over 10%, I wait for the bounce. The bounce is the play, because real selling will eventually slow, buyers will step in, and shorts will get squeezed. Morning volume broke the 14 level, but it held the 90s. It then bounced 50 cents. It returned to 14. Unable to break, that was your buy, with your stop at 13.89. If a stock can't make a new low by 10:30, more often than not the thing is not going to trend. Right there, you know you should play the bounce. Target A 14.40, Target B 14.90. Then if FNSR breaks 15, you'll have another squeeze, in addition to any value buyers chasing the price. Could have rebought, with lighter size and a tight stop.
However, you also want to look for the short. If FNSR held 15, you'd be looking to short with your stop above 15. I would have taken that trade at first. I would have expected 15 to hold. And for some time it did, however, the 15 short only would have produced 20 cents or less, and that would not have been the target. However, your risk reward of 5 cents or less makes it too compelling not to take.
FNSR had a huge buying rush after the 15 break. After so many positive candles, and after a run away from the moving averages, you expect a reversal. FNSR did just that. If you didn't catch the top via level 2 analysis, you could have used the charts to enter a short after it made a lower high after the 15.50, which produced 15 cents.
Looking at the chart, FNSR looked like a great stock to be watching. It behaved well..
Next, take a look at JDSU. Double bottomed in the morning, giving a 50 cent move. Buy the hook up as the double bottom showed signs of formation with a stop just below lows. Again, if the stock isn't going to make a new low in the morning, it probably will not trend. JDSU had MORE of a reason to bounce than FNSR as the FNSR news does not guarantee trouble for JDSU. Target of 15.75 and 15.90. After the bounce, you look for a short. And it came, as it made a lower high around 16. Targets of 15.75 and 15.50.
Both stocks behaved great for anyone who just read the tape.
Quote from Chris_Anonymous:
Something many people have suggested to me is to find a stock that I can trade exclusively and get to know it very well. I chose AMZN because of it's high volume and quick moves. I can sometimes catch a move of one dollar or more. So far so good, I can already see the benefits of getting to know one stock real well as opposed to trading many that I don't.
LOL the funny thing is....that i've heard a variety of things from different traders. One of the head traders in my group told me to trade just about everything in the beginning, and find out where I fit. The other head trader in my group trades stocks in play and momentum names, but his strategy is less scalable. Some of the other follow a diff strategy!
The way i'm trading now is to trade against levels that I define as support or resistance. These levels are prior day highs/lows, significant prior pivots, and intraday levels. I'm looking for consolidations and confirming PA at these levels and fading them. This the approach that I am comfortable with so far. This is something that the traders in my group are pushing for me to do. I just have to go ahead and define some of the details.
Quote from Shanb:
LOL the funny thing is....that i've heard a variety of things from different traders. One of the head traders in my group told me to trade just about everything in the beginning, and find out where I fit. The other head trader in my group trades stocks in play and momentum names, but his strategy is less scalable. Some of the other follow a diff strategy!
The way i'm trading now is to trade against levels that I define as support or resistance. These levels are prior day highs/lows, significant prior pivots, and intraday levels. I'm looking for consolidations and confirming PA at these levels and fading them. This the approach that I am comfortable with so far. This is something that the traders in my group are pushing for me to do. I just have to go ahead and define some of the details.
Shan, don't over think things. It's all about execution. You can trade any style, any method, any stock, you just have to be able to execute better then everyone else. Trading is a sport. Don't let anyone tell you otherwise. I worked at one of the biggest prop firms in NY back in the day and when I first started there I would go up to guys and have them show me what they do. I talked to 30 different guys that told me 30 different things trading 30 different methods. At the end of the day I realized that what made them money was not what they traded or how they traded but how well they executed.
As Malcolm Gladwell says, it's going to take 10k hours. You've got a long way to go.
Maverick,
Can you give me a shining example of a damn fine execution? What exactly are you referring to?
Do you mean someone who, no matter what their strategy is, they aren't hesitating or jumping the gun, they're trusting their strategy day in and day out?
Or do you mean someone who is literally getting filled at the <i>exact</i> price they want?
I'm assuming it's the former.
Can you give me a shining example of a damn fine execution? What exactly are you referring to?
Do you mean someone who, no matter what their strategy is, they aren't hesitating or jumping the gun, they're trusting their strategy day in and day out?
Or do you mean someone who is literally getting filled at the <i>exact</i> price they want?
I'm assuming it's the former.
regarding your very first trade. ....you can't be trading SPY with .05 stops....you need to widen your stops and target accordingly. with 5c stops, you'll get stopped even when you are right.......good luck!
Quote from forsalenyc:
regarding your very first trade. ....you can't be trading SPY with .05 stops....you need to widen your stops and target accordingly. with 5c stops, you'll get stopped even when you are right.......good luck!
Sorry if I am changing this journal's topic, but I have a question.
forsalenyc,
I've found that setups I'm seeing are roughly 1:1 on risk-reward ratio. 20 cent stops seem to be okay, and they usually aren't hit. My target however, would only be about 20 cents or so.
Now, this all might be incredibly vague regarding strategies, but in your opinion, would I be on the right track, or even getting close to sounding like someone who is making progress?
Quote from Chris_Anonymous:
Maverick,
Can you give me a shining example of a damn fine execution? What exactly are you referring to?
Do you mean someone who, no matter what their strategy is, they aren't hesitating or jumping the gun, they're trusting their strategy day in and day out?
Or do you mean someone who is literally getting filled at the <i>exact</i> price they want?
I'm assuming it's the former.
Trading is all about finding value in the market and acting on that as quickly as possible. It requires one to act quick and decisively all the time. The slower you are to recognize value, the more you have to pay for it. Over time, you simply cannot stay in the business if everyone is faster then you. And this is true on all time frames btw not just daytrading.
So that is what execution is. Also part of execution is executing your plan. Not deviating from your strategy, maintaining discipline, and understand the business of trading.
This is why trading is so much like sports. When you start to play sports as a kid, it's fun and slow. But as you get older and progress up to higher levels, the game gets faster and faster. At the highest level of the game, it requires you to make split second decisions flawlessly, not once, but over and over again for years on end. That is a lot of pressure. Most guys can't compete at that level, or that speed of the game. And the same is true in trading.
At the end of the day, most people will hang it up when they realize they can't find value fast enough. This is why trading always looks so easy after the close when one is staring at dynamic charts. It's the same reason professional football looks easy when watching a replay in slow motion. It's when you have to execute in real time that the challenge presents itself.
Quote from Maverick74:
Trading is all about finding value in the market and acting on that as quickly as possible. It requires one to act quick and decisively all the time. The slower you are to recognize value, the more you have to pay for it. Over time, you simply cannot stay in the business if everyone is faster then you. And this is true on all time frames btw not just daytrading.
So that is what execution is. Also part of execution is executing your plan. Not deviating from your strategy, maintaining discipline, and understand the business of trading.
This is why trading is so much like sports. When you start to play sports as a kid, it's fun and slow. But as you get older and progress up to higher levels, the game gets faster and faster. At the highest level of the game, it requires you to make split second decisions flawlessly, not once, but over and over again for years on end. That is a lot of pressure. Most guys can't compete at that level, or that speed of the game. And the same is true in trading.
At the end of the day, most people will hang it up when they realize they can't find value fast enough. This is why trading always looks so easy after the close when one is staring at dynamic charts. It's the same reason professional football looks easy when watching a replay in slow motion. It's when you have to execute in real time that the challenge presents itself.
Well put! Thanks.
Quote from Maverick74:
Trading is all about finding value in the market and acting on that as quickly as possible. It requires one to act quick and decisively all the time. The slower you are to recognize value, the more you have to pay for it. Over time, you simply cannot stay in the business if everyone is faster then you. And this is true on all time frames btw not just daytrading.
So that is what execution is. Also part of execution is executing your plan. Not deviating from your strategy, maintaining discipline, and understand the business of trading.
This is why trading is so much like sports. When you start to play sports as a kid, it's fun and slow. But as you get older and progress up to higher levels, the game gets faster and faster. At the highest level of the game, it requires you to make split second decisions flawlessly, not once, but over and over again for years on end. That is a lot of pressure. Most guys can't compete at that level, or that speed of the game. And the same is true in trading.
At the end of the day, most people will hang it up when they realize they can't find value fast enough. This is why trading always looks so easy after the close when one is staring at dynamic charts. It's the same reason professional football looks easy when watching a replay in slow motion. It's when you have to execute in real time that the challenge presents itself.
This seems reminescent of our conversation when I first met you...talking about a feel for markets and screen time/experience. Noted and I know that I have a lot of work ahead of me!