Spydertrader's Jack Hershey Equities Journal II

[cipherscribe]

Well, last night represented a complete divorce from all process goals. I don’t know what I was thinking, other than I wanted some ‘action’, and that I may have been ‘envious’ with other stocks in the FU moving so well this week, with no profits under my belt. I acted using greed as my major emotional state, rather than being conservative and primarily interested in following both the process and the protection of my capital. As a result I suffered serious losses in 4 stocks, 3 of which were not even in Dryup.

I post this in an attempt to help others be wary about entering positions for the wrong reasons. I forgot about my goal of “following the process”, only to replace it with stupid performance anxiety, which was my ultimate downfall for last night. Had I have followed my processes, I would have had no signals, and would not have lost any money, and my goals would still be intact.

I hope others can take a piece of wisdom from my mistakes. There are a lot of opportunities that exist within the boundaries you feel comfortable in trading. There are no reasons one needs to go outside of their own trading plan, as the results, good or bad, are not representative of your trading plan, which render them useless, in terms of results.

The only positive from last night is that I learnt this lesson, which I think is worth more than the money I lost. Forget about performance anxiety, and concetrate on the process. Hopefully others can avoid my mistakes without it costing them.

 

[foible]

Quote from cipherscribe:

The only positive from last night is that I learnt this lesson, which I think is worth more than the money I lost.

Sing it with me, brother.

After trading, I take a run and grab some food and think about the day. I can come back and clearly articulate exactly what I did wrong, and what I did right.

I'm still making mistakes, but at least they're always different mistakes, and each mistake costs me less and less. I figure that as long as I can say that, I'm doing okay. And better yet, I am finding enough winners that I'm breaking even, in spite of my mistakes.


Thanks for sharing your mistakes with us. As long as you really learn from them, I think you'll become a very good trader. (At least that's what I tell myself )

 

[Spydertrader]

Quote from foible:

I'm thinking that I was in too many positions and should have stayed away from EZPW and TXCO because the volume was so light. Beyond that, do you have any comments on ALJ or SLW? Did anyone else take them, or would they have? Would you widen the stops, pick better entries, or just accept getting stopped out?

Maybe you attempted to monitor too many positions, and maybe you didn't. Only you can say for sure. However, it appears (to me at least) you simply made a few small errors in judgement - which had end effects of losses. In other words, You really weren't too far off from having an excellent day.

TXCO - If you found yourself stopped out on this stock, then you may have set too tight a stop. With lower priced equities, you need to use a 'stop offset' or widen the stop used for additional 'wiggle room' during the day. True, you didn't see volume 'breakout' here, but you do have improved volume over the previous day. Lesson: Investigate the use of the 'Stop Offset' Method and begin to use it on lower priced equities to improve your comfort level.

EZPW - You hit the nail on the head with this one. No volume here. The siren song of rising price with next to no volume has fooled many a trader - including myself. Lesson: Until you can gain more experience, avoid these trades for now.

SLW - I'm not familiar with this stock as I do not have it in my Final Universe. However, after reviewing a chart, I see that you have another low priced stock in SLW. Perhaps, you set your stop too tight here as well? Lesson: See TXCO.

ALJ - Nothing wrong here. You made an excellent trade.

I hope you find the above information useful, and as always, Your Mileage May Vary.

- Spydertrader

 

[7cal]

I've been lucky that I have been able to hold out on forcing trades so far, although it's been tempting. On the flip side it can try your patience especially for those (like me) who are very new to the system and want some 'action'.

One question I have: a couple of days ago I was monitoring GMXR as it was a stock I had in DU. In the morning it was making good volume, beating LBDU and ABDU before 10:30 and 11:30 respectively, and was at FRV by early afternoon. However the price did not show improvement until later in the day (can't remember the time, say 2:30 or 3 pm EST). At that time MACD and Stochastics were also good on 30 minute charts, so I entered long.

From my understanding, we can enter if a stock makes FRV by EOD. The LBDU and ABDU are kind of 'pro-rating' on the FRV volume, but in theory you could enter at any time between EOD if your 'pro-ration' of FRV is met.

Was this a correct move, 'system' wise? If the price is down for most of the day on high volume but finally crosses into a gain (when compared to previous day), should you enter?

At about the exact moment I entered, I watched the price start to head south. I held on for a couple of days as the price varied between about minus 4% from where I entered and about even, and I finally exited today for a wash trade. Just wondering if I shouldn't have gone in in the first place.

 

[Atlantic]

Quote from Spydertrader:

9-26-06 Entry: 9:54:38
9-26-06 Exit: 10:09:08

- Spydertrader

thank you - so it is obviously no problem for you to hold through econ. reports?

 

[Spydertrader]

Quote from gerry875:

thank you - so it is obviously no problem for you to hold through econ. reports?

Judging from the trade volume occurring at that time, a whole lot of people (not just me) don't seem to have a problem holding through econ. reports. Nothing unusual here at all. One exception, though, would be the monthly FOMC Announcements ('Greenspan Days' as Jack used to call them). On these days, I normally exit well in advance of the 14:15 (Eastern Time) announcement period when volume has evaporated and volatility has disappeared. Sidelined, I await the proclamations from the FED (like everyone else on the planet) and enter directionally off a bracket trade.

Hope that helps.

- Spydertrader

 

[Spydertrader]

Quote from 7cal:

Just wondering if I shouldn't have gone in in the first place.

When first starting out, I followed the rules more closely with respect to 11:00 AM - 11:30 AM deadline. However, doing so causes one to miss out on the late day breakers (CMED the other day for example). Other traders often entered later in the afternoon when all the 'planets failed to line up in the morning.' After all, as long as one has FRV levels (or some pro-rata version there of) and price improvement, you met the initial standards required (MACD / Stochastics as well). More importantly (from my point of view), did you hold onto this trade (hoping for a comeback) while it went against you? Or, did the 4% drop fit into your trade management rules (E.g. did you ignore Ross' Rule)?

Since how strictly one adheres to the rule set remains a matter of personal trading style and experience, I see no crisis created by entering later in the afternoon (given all entry criteria have been met). Just my two cents. As always, your mileage may vary.

- Spydertrader

 

[foible]

Quote from Spydertrader:

I hope you find the above information useful, and as always, Your Mileage May Vary.

I do, thank you for your perspective.

 

[Spydertrader]

Sold COGO this morning. I probably sold too soon (price has yet to hit the left trendline on the daily charts), but I leave with a profit.

- Spydertrader

 

[tradingbug]

I washed on slxp as I did more "studying" last night and have to agree with the one day hold for shorts that spyder implements.Unless, of course it stays in a short rocket.