September Trading Journals

H

Hitman

August was a disappointing month in every way. My offense was completely shut down as I had a hard hard time finding my shots and making them, and my open game was nowhere near the caliber of July. There were no 4 digit games either way, and for the most part it was a matter of patience, patience, and more patience, make that 1 or 2 good shot count and be done with it. Unfortunately, I failed to do that especially during the second half. That said, with the integration of Bollinger Bands, and the way I have tightened my game even further than I did in June/July, I am ready for September.

August / July

P&L Before Commissions: 6730 / 12021
P&L After Commissions: 1330 / 7190
Shooting %: 48.00 / 53.40%
Cents Per Share: 0.041 / 0.075
Volume: 164900 / 159900
W/L: 15-8 / 17-3

When the insitutional traders come back from vacations, it is almost guaranteed that volume will be injected back into this market. It is not a question of if, but a question of how much. Regardless, the toughest months of the year is now behind us, and it is time to slowly but surely increase our aggression.

I have averaged slightly less than 4K a month during the Jun-July-August stretch, I asked for 5K. YTD, I am up $48K, I wanted 50K going into September after I blew what was a flawless start back in April. It is close, but a failure nonetheless. Then again, the year is not over yet. In fact, in many ways, I feel it just started, again . . .

My goal is to land somewhere between the 70-100K range when it is all said and done. From September to December, if I average just 6K a month, it will put me in the lower end of that target estimate. Anything less will be considered a disgrace. If I do make it, I at least won't feel like a big loser, but I sure as hell won't feel like I have won anything either.

For me, the minimum wage for the upper tier in New York is 100K a year, and that means average 13K a month during next four months. It is a bit of a stretch, but I have done more than that before, and I know if the market improves, and especially if my game improve, I have a shot, I really do have a shot. The sky is the limit, even 100K a year is merely a first baby step, but for a new trader, it is a huge step, because only then, I can even begin to consider that I have arrived, as a trader.

We have to take it a step at a time, or shall I say, a game at a time, in September, the final month of third quarter, I expect the volume to go up, but not to the extent of October - December magnitude. I am looking for 8K this month, with a daily goal of $600 a day. It is not a lot, but it is the kind of numbers I need to build confidence with, shake away summer hang overs, and go into fourth quarter with increased size. I am starting most serious positions with 400-600 shares, I want to bring myself up to 800-1000 shares at the end of this month assuming I am knocking down the shots, my maximum limit at this firm is 3000 shares, I gotta start working toward that.

I have always talked about becoming closer to a "pure" trader, a trader whose mindset is flawless for his job. I have lost 1 out of every 3 games this year, there is room for improvement. It is about developing a winning mentality by putting together consistent profits. It is about the confidence to strike at every opportunity. It is about the calm and collectiveness to come back from morning deficits. It is about the focus to truly become the one with the game. The chosen one . . .

Labor Day, deep in my heart, I would rather be playing the game I love, than doing BBQ's . . . Yet I must use this opportunity to rest every sense, every muscle, every brain cell, and get ready, for the most critical stretch of the year. Make or break, do . . . or die!
 
Hitman,

I have been reading your journals for a while now and I have wanted to ask you this question many times..........

Why do you feel that your success as a trader should be measured by how much money you have made on a micro level???

Profits are the bi-product of successful trading not the other way around. If you want to be able to reach your true potential as a trader than you are gonna have to detach yourself from the money aspect of the game. If you are trading well and you have a solid edge the money should flow right into your account, almost as if it were an afterthought.......

I strongly urge you to sit back and give what I have just said alot of thought.

Now you may be sitting there and asking yourself "If I trade well than the profits should reflect that", and that is true somewhat...Successful trading is having an edge and then taking full advantage of it! If you find that you are trading well and the profits are not following than thats a problem with your edge.

As you know every edge has a natural distribution of wins and losses, stop focusing so much on the micro level (trade to trade, day to day) and more on the macro level and I can almost say with certainty that your account will be rewarded.

I have had days in which I did everything right and the trades just did not go my way, and I walked away extremely satisfied with my performance....Then there has been days in which I will pull 10-15k out of the market and feel very very very bad about my performance....

Im rambling now so im going to stop, but I hope you understand what I am trying to tell you....

PEACE and good trading,
Commisso
 
Hitman,

I know you set high expectations for yourself, but looking at your record you appear to be having a great year, despite a somewhat slow august. You're up nearly 50k with still 1/4 of the year to go. That within itself is quite an accomplishment.

Think of how many traders either went bankrupt or left the industry this year. No matter how well you do, there will always be someone who does better and makes more money than you. This can become a good motivating factor, and in the meantime try not to be too hard on yourself.

Htrader
 
Finished modeling for our house last night and I was very tired this morning, fatigue took its toll as my brain lacked the energy it needed to be up to speed in what should have been an awesome opener for September. If this is the way market will perform throughout the month then we are certainly in heaven.

There is definitely an edge about trading the same stocks (Mrs. D) everyday, you get to use the same set of bullets everyday so when the market tanks you know you will have the right bullet for it. Tommorrow I am going to loose my stops by just a touch . . . as I noticed stuff are definitely trading, this market has volatility for sure, and I need to add a little more aggression and a little more size.

4 of 6 shooting on 7300 shares, 2 bullets, +695 before commissions, +386 after. Many many times I had my hand on a trade had it just went my way a little more would have made it much bigger day for me, and then the BID or ASK gets hit and the thing spread me 10-20 cents on a stop out, greatly cutting into my profit not to mention confidence . . . While I played a poor game, it was a "feel-it-out" kind of thing, tommorrow I must attack viciously after getting some quality sleep tonight.

Pre-Market: Mergers, then some . . .

9:30: IUX sell-off as AIG was getting destroyed, PGR is so thin and it took a while before the bullet went up when it did I got a bad fill each way and only managed a quarter point. Energy rally for whatever the reason I didn't jump in even when the leaders went up substantially, only took KMG which pulled back after a gap-up but he shook me out for a dime profit before went up for good. Missed a lot of laggers in this rally.

9:53: Bulleted LM on XBD weakness, economy news came out stopped out for flat (market looked really weak, I was betting on bad numbers, and LM being a low tier stock should give me more than enough time to get out). This is why you never ever rebate your bullet, I thought I will not use it in the afternoon so I rebated, blue collar ethic . . . Afternoon sell-off this thing would have worked wonders . . . Fortunately I didn't rebate my PGR bullet . . .

10:02: In chaos, bought ROG instead of ROH, a super thin stock that I have no idea what it is but at the time it traded 2500 shares on the day and 500 of which was mine, took a 15 cents loss and when I did buy ROH the stock had a serious seller in it, and it was the weakest CEX stock of the day. Took FMC and got a nice 40 cents move. Still, my inability to capitalize on this futures rip, the lack of confidence to load up on positions (when futures moves like that you don't have to wait for BID/ASK), handed me a lousy $250 profit at half time.

3:06: SOX gave up a lot of ground, I was actually anticipating technology to join the party which was the wrong biase, I just didn't believe the sell-off will have any follow through, I was dead wrong. Only used 400 share's worth of that PGR bullet for a 30 cents move (pared in and out way too much, when the market tanks like that, just let it go, loose the stop a little). It was a silky smooth point it tanked and I packed just 30 cents after all those pare-in and pare-out's.

In any case, it is better than opening the month with a loss, but my aggression must step up tommorrow. Follow through's, that's what has been missing, and that's what we had today, hope it keeps up.
 
Oh man, you do need help and I can tell you or the team that is writing these missives is on a railway car going backward. Trading is not about aggression, it's about THINKING. These are no markets to try and be an aggressive power momentum trader, they are the opposite. Go out for a Rugby team or grow up. God I'm beginning to think you are the worse advertisement in history for trading. After studying your writings no wonder they passed Pattern Day Trader regulations. You are your own worse enemy.Sorry I don't mean to be cruel to you, but get a grip for God's sake.:(
 
Yet another volatile day, except it was choppy during the first and last hour, smooth as silk in between. This was the most frustrating game in my career given the 15 for 25 shooting percentage that should have guaranteed a victory. Instead, my best trades turned out to be my smallest positions and my worst trades were the ones I did size on (not surprising given my tendency to do bigger trades during the first and last hour).
There were also a few mistakes with the order entry during the heat of battle, and really really bad luck fills, it was almost as if every time I make a run, something would happen which prevented me from overcoming the deficit inflicted with two horrible bullets this morning.

20800 shares (really stepped up on aggression today) on 15 of 25 shooting, +416 before commissions, -205 after, 2 bullets. The market is giving me a lot of opportunities, but the game is being played at a much faster pace, and I must adapt. I can't wait for tommorrow's game. Stocks actually move now . . . even if I didn't play to my strength first two games of the month, I hope I will pick it up during the next 17, with this kind of range it is very very possible to have four digit games.

The Ex-Nasdaq trader (who moved to our firm 5 months ago) had a stunning 5K day which was good for top ten . . . I guess now the market is finally moving his full arsenal will be put to good use . . . He caught quite a bit of that technology run . . .

Pre-Market: Massive upgrades in financials

9:30: When something is too obvious, it usually doesn't work, like everyone and their mother was expecting a financial rally but after a brief gap-up it just faded. Still, I knew there will be a sharp bounce so took BSC at 52.01, precisely morning's low, sold for a quarter when the futures looked weak, missed 50 cents. Saw XNG sell-off and put up a bullet on KMI, very very thin stock and very low tier, I only trade it when something BIG is happening on the index, and for whatever the reason I sold 1000 shares when there is no offer in sight, boom I lost 40 cents.

9:48: Still expecting financials to run, did a basket (which I haven't done in a long time) and took BK, STI, LM, again this was not the best thing to do as I already missed the move in first tier stocks and I am taking the second / third tier on positive tape action. Out of all 3 for flat as the market completely collapsed.

10:04: Took COF on what was a tiny little squeeze on the futures, this is BAD trading, the kind of trades you pull when your good trades don't work out and you want something back fast, lost 28 cents. Futures was way oversold, I put up my second bullet in PPG fortunately I covered for flat right before it ripped . . . The difference, it had an offer which allowed me to get out in time . . . I was down $750, and I had to take a 1 minute time out to clear up the brain . . .

10:29: One more leg on the futures, basket MMM / LEH / GS, I was very bullish on financials and got 50 cents out of LEH (very fortunate to get out at the top), 20 cents out of GS, 5 cents out of MMM (it had the best tape but collapsed). Futures made a lower high and I should have shorted the SPY but I opted to stay in cash.

10:46: Took UNH on a sweet, sweet HMO pop, perfect entry/exit on that one, 60 cents profit, the catch, it was on just 400 shares.

11:34: OSX pop, took HP, turned out that was the intraday high of the index and I lost 13 cents on 300 shares. Knowing there will be XNG inventory numbers announcement at 2PM, I decided to hit the gym with a $180 deficit, as the market clearly slowed.

1:49: Refreshed, I am anticipating a pop in energy, and while I had the right idea, the specialists made it nearly impossible with a series of very very clever shakes and fakes right before the number. Lost 20 cents on EOG, 10 cents on APA, 10 cents on VTS, and was very very fortunate to get out of 800 share's worth of SGY for a minor profit as it was my biggest position. What happened was the energy stocks poped, then collapsed right back in . . . I was down $500 again, and I missed the first leg of the technology rally (which made it very hard to chase anything).

2:17: Shorted SPY off the high band and took 10 cents profit when the market didn't appear to want to come in.

2:33: Futures ripped, I saw the move in RLX and CEX (too late for technology and financials now), took KSS for a 40 cents move but could have made another 40 cents, again it was a small position. ROH had a very weak breakout and I took 10 cents profit. Got 10 cents out of PX on a bounce. Took some PVN at 29.05, lost 5 cents, bad idea, stock was killed yesterday today it was just consolidation. Took STT and got 10 cents. Most of those were quality shots, just that the market refused to give me just a little more push. Essentially I am in the money 20-30 cents, BID gets hit and I end up with a 10 cents profit, frustrating, but still, I managed to cut my deficit down to $130.

3:06: In a close game, especially a poorly played one, this is what I would call, unacceptable . . . took IRF at 34.66, would have been able to sold it for a 40 cents profit, instead accidentally inputed wrong stop and sold market for a 3 cents profit. Took JBL long at 19.10, BID stepped up to .14 but ASK was too large at .15, I saw the BID getting hit and I had a stop 1 cent below it, I should have cancelled my stop and DPed it, instead there was nothing below the BID and I lost a quarter instead of a penny.

3:42: Last pop on the futures, took GE for a 15 cents scalp, too little, too late, swallow the pill, tommorrow is another game.
 
Originally posted by Hitman
.........Instead, my best trades turned out to be my smallest positions and my worst trades were the ones I did size on (not surprising given my tendency to do bigger trades during the first and last hour).
More...

Hitman,

I would suggest that the above is more imprortant than exit strategies (although it has its place also).

How do you determine your sizing? why did you take small positions on some and larger ones on others? was this just coincidence (apparent in hindsight)? did you apply the same position sizing formula? or was it less structured?

Let me give you an example:

Risk 1/2% of portfolio (lets say the portfolio is $100,000)
$500 per trade risked
$0.50 risk/ share ($500/$0.50)
This equals 1000 shares
 
Babak is probably right on here. Review all of your winners/losers and compare the position size on each. This can make an INCREDIBLE difference.

rtharp
 
I take positions depend on the size of the current BID/ASK, the strength of the market/index, and what I feel to be the probability of the trade. This is further skewed in by the volatility of different stocks.

It just happened that I traded bigger positions in the first and last hour (which I usually do) and they were choppy, and the other times market was actually smooth and I did smaller positions . . .

Position sizing, like every other aspect of trading is half science, half art, my maximum limit on any position is 3000 shares at this firm, I currently do 400-1000 depend on the situation . . .
 
This morning I opened the game with a 1 point trade in IRF, I really thought it would be a huge day for me. Unfortunately, that happened to be my only meaningful winner in the morning. I went way too aggressive in a choppy market and I missed shot after shot. If it weren't for a total lucky shot in the afternoon I would have sunk into the red zone for the pay period.

The market is deceivingly difficult. Volume returned, but it chops like mad. Had I been playing as if I was playing in summer time I would have been fine, instead I went too fast, I must slow the tempo down tommorrow . . . Up $100 for the pay period, 16 games left, a LOT of time and volatility to make something happen, focus, concentrate, execute . . .

4 of 13 (ouch) shooting on 12800 shares, +357 before commissions, -71.35 after. I am officially part of Mrs. D's group and she will start some tape reading lectures soon. We will move to the awesome new building at 100 Wall Street (ahhhhh, the PERFECT address don't you think) in November. Mrs. D. had a private chat with me today, and said my consistency of 83% positive before commissions is among top 25 in the firm, she will help me push up the size a little more.

Pre-Market: Mixed RLX news:

9:30: Many SOX stocks tanked 1 point or more except IRF, bullet, boom got 1 point on a spread, only 600 shares really didn't expect it but easy as pie covered immediately at the low of that move. Tried to do the same thing on BR on XNG sell-off, energy has been choppy lately, and I was hit for 15 cents on 1000 shares. Took LOW long on RLX rally and got out flat, rushed a trade in PGR on IUX strength and lost 20 cents. Rushed a shot in DUK on UTY strength and lost another 16 cents. I said to myself market will tank, yet I went long, plain stupidity.

9:56: Shorted IRF/BR, MSFT news came out, enough said, lost 30 cents on IRF, 20 cents on BR . . . Took DNA on BTK gap-up, market tanked, out for a 5 cents loss. That news announcement didn't do anything other than a fake gap-up. I gave up all of that IRF trade and was in the red again.

10:00: Ugly, churned and churned my two bullets, churned in a fake energy rally (EPG/NBL/SGY). Lost 20 cents on IUX pop which was all AIG no other component moved. I was down 300 at half time.

2:15: Took some SPY on low band bounce for a 10 cents bounce, too bad I didn't short it on the way down to the lower band. Shorted CLS on a fake breakdown and futures ripped and I was stopped out for 15 cents loss. Total luck here, I checked the quote for AMD and I accidentally typed "AMT", which was falling through the roof and I did a bottom pick when it whacked a huge offer at 9.51, when it printed 10.00 I put my stop on the BID but it took my shares without hitting the BID! Still that gave me half a point and I knew I used up all of my luck there, even if I missed the 1 point move to 11.00 . . .

Slow down the tempo, quality over quantity, don't need to take a lot of shots, but do bigger size on quality shots, tommorrow's game will be very interesting as we look for a potential re-test of April's low's . . .
 
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