Make your biggest liability become your strongest asset.
Trading Journal, November
- Thread starter STOCKKBROKER
- Start date
Goal Setting
This will give you an objective to strive toward from a micro to a macro level.
Imagine a soccer or football game where there were no goals on the field? They would run around the field all day long with no direction or purpose. If you have no plan to win you automatically plan to fail.
Trade activity goals: How many trades per day minimum? What is your maximum?
Short term trading goals: How many points do you want to strive for per trade? per day?
Monthly Profit Goals: Short-term trading, intermediate-term trading or swing trading goals, long-term goals.
Example:
Immediate goal: To select 5 trades minimum per day with a to result in 3 wins, 1 loss, and 1 even trade. Each win will have an average of 1 point on 50% of my position size and an average of 3 points will be assigned to 50% of my position size for a total of 2 points average per trade. I expect to have 1 loss of 1 point and 1 even trade for a net 5 points minimum. Maximum risk is 1 point per trade.
Monthly goal: 100 points minimum; dollar profits will be calculated with the amount of shares used to trade. A 500 share trading acct would have a goal of $50,000 per month.
Yearly goal: 100 pts minimum per month over a 12 month period or 1,200 pts for the year; dollar profits will be calculated with the amount of shares used to trade. A 500 share trading acct would have a goal of $600,000 or compounded with a 10% growth per month on share size is $ 1,000,000.
Yearly share size goal: To increase my share size at the beginning of every month and this will be based upon capital in each account traded, My short term trading acct will have a goal of increasing a minimum share size of 10% per month, will start this acct with 500 shares with a 12 month goal of reaching 1,500 shares.
Swing Trade (intermediate term trading or swing trading subject to market conditions): 1 swing trade per day. Price goals will not be applicable as price stocks and market swings have too many variables to predict this. Risk is dependent on each trade and cannot be determined otherwise.
Long-term goals: To accumulate fundamentally strong stocks in a cost-averaging basis in any market correction into support zones thereby achieving the best average price. In an up-trend, I will enter 60-minute chart daily buy set-ups for my retirement account. This account will not have any short selling activity and will not use exit stops for losses as the lower the price the better. I will use trailing stops for profits.
My goal also is to turn swing trades into long-term trades if the trend allows for this.
d. Personal growth goals: Your personal growth to maintain a solid mental and emotional foundation and always stay positive. Also, include a goal for personal business growth.
Example:
My goal is to increase self-worth by reading 1 book trading book per month and attending 2 workshops or trading seminars each year.
The books I recommend for my business growth are:
Technical Analysis and Stock Market Profits: The Real Bible of Technical Analysis (Traders' Master Class), Richard Shabacker
Technical analysis of the financial markets, John Murphy.
Technical Analysis of stock trends, Robert Edwards /John Magee
The psychology of technical analysis, Tony Plummer
Forecasting financial markets, Tony Plummer
Street Smarts, Linda Raschke
Profits in the stock market/with charts, H.M. Gartley
The Websites I will use are:
http://www.chartpatterns.com/
http://www.mrci.com/lbr
http://www.easystock.com/,
http://www.bigeasyinvestor.com/
http://www.traderbot.com
The books I recommend for my personal growth are:
Master Key to Riches, Napoleon Hill
Keys to Success, Napoleon Hill
Success Through a Positive Mental Attitude, Napoleon Hill
Think and Grow Rich, Napoleon Hill
Keys to Positive Thinking, Napoleon Hill
Power of Positive Thinking, Norman Vincent Peale
You Can If You Think You Can, Norman Vincent Peale
Amazing Results of Positive Thinking, Norman Vincent Peale
Enthusiasm Makes the Difference, Norman Vincent Peale
The Richest Man in Babylon, George Clason
Personal Power, Anthony Robbins
The Seven Habits of Highly Effective People, Stephen Covey
This will give you an objective to strive toward from a micro to a macro level.
Imagine a soccer or football game where there were no goals on the field? They would run around the field all day long with no direction or purpose. If you have no plan to win you automatically plan to fail.
Trade activity goals: How many trades per day minimum? What is your maximum?
Short term trading goals: How many points do you want to strive for per trade? per day?
Monthly Profit Goals: Short-term trading, intermediate-term trading or swing trading goals, long-term goals.
Example:
Immediate goal: To select 5 trades minimum per day with a to result in 3 wins, 1 loss, and 1 even trade. Each win will have an average of 1 point on 50% of my position size and an average of 3 points will be assigned to 50% of my position size for a total of 2 points average per trade. I expect to have 1 loss of 1 point and 1 even trade for a net 5 points minimum. Maximum risk is 1 point per trade.
Monthly goal: 100 points minimum; dollar profits will be calculated with the amount of shares used to trade. A 500 share trading acct would have a goal of $50,000 per month.
Yearly goal: 100 pts minimum per month over a 12 month period or 1,200 pts for the year; dollar profits will be calculated with the amount of shares used to trade. A 500 share trading acct would have a goal of $600,000 or compounded with a 10% growth per month on share size is $ 1,000,000.
Yearly share size goal: To increase my share size at the beginning of every month and this will be based upon capital in each account traded, My short term trading acct will have a goal of increasing a minimum share size of 10% per month, will start this acct with 500 shares with a 12 month goal of reaching 1,500 shares.
Swing Trade (intermediate term trading or swing trading subject to market conditions): 1 swing trade per day. Price goals will not be applicable as price stocks and market swings have too many variables to predict this. Risk is dependent on each trade and cannot be determined otherwise.
Long-term goals: To accumulate fundamentally strong stocks in a cost-averaging basis in any market correction into support zones thereby achieving the best average price. In an up-trend, I will enter 60-minute chart daily buy set-ups for my retirement account. This account will not have any short selling activity and will not use exit stops for losses as the lower the price the better. I will use trailing stops for profits.
My goal also is to turn swing trades into long-term trades if the trend allows for this.
d. Personal growth goals: Your personal growth to maintain a solid mental and emotional foundation and always stay positive. Also, include a goal for personal business growth.
Example:
My goal is to increase self-worth by reading 1 book trading book per month and attending 2 workshops or trading seminars each year.
The books I recommend for my business growth are:
Technical Analysis and Stock Market Profits: The Real Bible of Technical Analysis (Traders' Master Class), Richard Shabacker
Technical analysis of the financial markets, John Murphy.
Technical Analysis of stock trends, Robert Edwards /John Magee
The psychology of technical analysis, Tony Plummer
Forecasting financial markets, Tony Plummer
Street Smarts, Linda Raschke
Profits in the stock market/with charts, H.M. Gartley
The Websites I will use are:
http://www.chartpatterns.com/
http://www.mrci.com/lbr
http://www.easystock.com/,
http://www.bigeasyinvestor.com/
http://www.traderbot.com
The books I recommend for my personal growth are:
Master Key to Riches, Napoleon Hill
Keys to Success, Napoleon Hill
Success Through a Positive Mental Attitude, Napoleon Hill
Think and Grow Rich, Napoleon Hill
Keys to Positive Thinking, Napoleon Hill
Power of Positive Thinking, Norman Vincent Peale
You Can If You Think You Can, Norman Vincent Peale
Amazing Results of Positive Thinking, Norman Vincent Peale
Enthusiasm Makes the Difference, Norman Vincent Peale
The Richest Man in Babylon, George Clason
Personal Power, Anthony Robbins
The Seven Habits of Highly Effective People, Stephen Covey
Trading Plan - Methodologies and Management:
Do you have your entry criteria for a choppy sideways market, or for a trend day, for intraday swinging 2 way trading range where market swings from highs to lows all day?
Do you have a methodology for trading within chart patterns like triangles, channels, and wedges?
Do you know how to define your exits when you enter for profit or loss?
What indicators will work in what environments?
Your trading plan is your money management plan.
a. Trading Plan
Fear and greed are emotions felt when you don't have specific rules in place. Follow your rules.
Most importantly, aside from a low risk trade entry is to develop Trade Management rules that will define both risk and profit objectives.
The key to making money in the markets is money management
Lack of a clearly defined trading plan is why many aspiring traders experience the same psychological problems. Hope, fear, greed, anxiety and the inability to âpull the triggerâ for both entry and exits etc.
Plan for the following possible situation: The average trader operates in a fog and has no money management methodology to provide the structure for successfully managing his trading business. Since he operates in the dark, he inevitably becomes uncertain and anxious. Continually floundering around in the dark makes the situation worse and worse, like a snowball rolling downhill. You cannot successfully manage any type of business without first organizing your trading performance into a meaningful structure which reveals trading strengths which can be exploited and weak areas which must be eliminated or reduced.
Trading plan has three rules:
1) When to get into the market
2) When to get out with a profit
3) When to get out with a loss
Exiting is just as important as an entry, there are a variety of exit techniques to use, but the key is to stick to the rules of the plan.
Examples:
1. Exit at a target, i.e. a retest of intraday high/low or swing high/low
2. Exit at a target, i.e. an expansion
3. Exit at a target, a fixed profit objective in dollars
4. Exit at a target, an objective chart point
5. Exit at a target, a subjective chart point
6. Exit at a time interval, 4 days
7. Exit at a combination profit time, first profitable open, 2nd profitable close.
8. Don't exit but just reverse
9. Exit on a range expansion
10. Trail a stop off the low
11. Trail a stop off the high
13. Exit on close
14. Exit if the day's close is less then a certain % of the daily range in the direction you are trading
b. Trading Plan - Method and Management Rules
Examples:
Trending Environment
Markets to retrace 38-50% off its highs,
A support at its 20 period exponential moving average
A bull-flag formation,
On a smaller timeframe, look for a ABC corrective wave to confirm bull flag pattern on larger timeframe
Test of the lower trend-line of the bull-flag pattern,
Stochastic to have reached a oversold condition of 20 or lower.
Once the market confirms all this criteria, place a buy order at the market.
Stop loss is at the pivot low below its 20 EMA as risk point, typically no more than 2 points of risk on any 1 trade.
Profit exits will be as follows: when profitability is more than 1 point and no more than 2 points seek to take-off 50% of my position immediately and move the stop up to the break-even point. Exit on 25% or more of trade is reset of highs and balance of trade should be pressed into close. Short sells are reversed.
Do you have your entry criteria for a choppy sideways market, or for a trend day, for intraday swinging 2 way trading range where market swings from highs to lows all day?
Do you have a methodology for trading within chart patterns like triangles, channels, and wedges?
Do you know how to define your exits when you enter for profit or loss?
What indicators will work in what environments?
Your trading plan is your money management plan.
a. Trading Plan
Fear and greed are emotions felt when you don't have specific rules in place. Follow your rules.
Most importantly, aside from a low risk trade entry is to develop Trade Management rules that will define both risk and profit objectives.
The key to making money in the markets is money management
Lack of a clearly defined trading plan is why many aspiring traders experience the same psychological problems. Hope, fear, greed, anxiety and the inability to âpull the triggerâ for both entry and exits etc.
Plan for the following possible situation: The average trader operates in a fog and has no money management methodology to provide the structure for successfully managing his trading business. Since he operates in the dark, he inevitably becomes uncertain and anxious. Continually floundering around in the dark makes the situation worse and worse, like a snowball rolling downhill. You cannot successfully manage any type of business without first organizing your trading performance into a meaningful structure which reveals trading strengths which can be exploited and weak areas which must be eliminated or reduced.
Trading plan has three rules:
1) When to get into the market
2) When to get out with a profit
3) When to get out with a loss
Exiting is just as important as an entry, there are a variety of exit techniques to use, but the key is to stick to the rules of the plan.
Examples:
1. Exit at a target, i.e. a retest of intraday high/low or swing high/low
2. Exit at a target, i.e. an expansion
3. Exit at a target, a fixed profit objective in dollars
4. Exit at a target, an objective chart point
5. Exit at a target, a subjective chart point
6. Exit at a time interval, 4 days
7. Exit at a combination profit time, first profitable open, 2nd profitable close.
8. Don't exit but just reverse
9. Exit on a range expansion
10. Trail a stop off the low
11. Trail a stop off the high
13. Exit on close
14. Exit if the day's close is less then a certain % of the daily range in the direction you are trading
b. Trading Plan - Method and Management Rules
Examples:
Trending Environment
Markets to retrace 38-50% off its highs,
A support at its 20 period exponential moving average
A bull-flag formation,
On a smaller timeframe, look for a ABC corrective wave to confirm bull flag pattern on larger timeframe
Test of the lower trend-line of the bull-flag pattern,
Stochastic to have reached a oversold condition of 20 or lower.
Once the market confirms all this criteria, place a buy order at the market.
Stop loss is at the pivot low below its 20 EMA as risk point, typically no more than 2 points of risk on any 1 trade.
Profit exits will be as follows: when profitability is more than 1 point and no more than 2 points seek to take-off 50% of my position immediately and move the stop up to the break-even point. Exit on 25% or more of trade is reset of highs and balance of trade should be pressed into close. Short sells are reversed.
Lost $300 after all was said and done.
Got shaken out of most of my winners and I cna't even count how many losers I have !!!!!!!!!!!!! Forget about it.
114.82 BBY
-74.63 BLS
-42.95 BSC
66.83 CB
-74.64 DBD
45.08 DO
25.45 DOX
10.63 HWP
-49.04 LAB
5.24 MHK
-50.20 MUR
-69.54 NBL
20.49 NSM
-64.17 POL
-89.48 SLR
-59.30 SOL
A brutal week to close the month.
Down 4 days this week, unbelieveable.
Got shaken out of most of my winners and I cna't even count how many losers I have !!!!!!!!!!!!! Forget about it.
114.82 BBY
-74.63 BLS
-42.95 BSC
66.83 CB
-74.64 DBD
45.08 DO
25.45 DOX
10.63 HWP
-49.04 LAB
5.24 MHK
-50.20 MUR
-69.54 NBL
20.49 NSM
-64.17 POL
-89.48 SLR
-59.30 SOL
A brutal week to close the month.
Down 4 days this week, unbelieveable.
I had a losing day as well, if that is any consolation... amongst many errors, I tried to buy the break in Gold and top-ticked the bugger ... oh well, I will let the law of probabilities and trade management sort me out!
Originally posted by STOCKKBROKER
Hitman +$1300 ???????
Just goes to show the value of pre-market research i.e. the Goldman upgrades.
Saw this today posted by Rev Shark - He's currently filling in the post left vacant by Todd Harrison over on Real Money's Trading Track..... He quoted our 30th President - Calvin Coolidge.... Its something we need to be reminded of when the going gets tough...
"Nothing in the world can take the place of persistence. Talent will not; nothing is more common than unsuccessful men with talent. Genius will not; Unrewarded genius is almost a proverb. Education will not; the world is full of educated derelicts. Persistence and determination alone are omnipotent."
So fellas, dust yourselves off if you had a shitty week..... and try to fine tune what works for you.
NYCTRADER
"Nothing in the world can take the place of persistence. Talent will not; nothing is more common than unsuccessful men with talent. Genius will not; Unrewarded genius is almost a proverb. Education will not; the world is full of educated derelicts. Persistence and determination alone are omnipotent."
So fellas, dust yourselves off if you had a shitty week..... and try to fine tune what works for you.
NYCTRADER
i just wanted to share some thoughts on my experience in dealing with people.. first of all.. no does not ever mean no.. think about it.. your out on a date.. maybe watching a romantic movie and slowly you reach up for a kiss.. she says no.. what do you do? pack up, carry her home and never talk to her again?! heck no.. you realize that what she just said was "no" for now but what she meant was "maybe" =).. this is just the nature of dealing with people.. maybe she hates you and never wants to kiss you but maybe she is feeling sick.. or maybe she has something stuck between her teeth.. or maybe she just wants to make sure you really care about her.. you cant know.. have you ever been fishing? what do you think is better bait? a worm or a piranha? think about it.. fish dont bite at something that is chasing them.. the same with people.. the direct approach often just doesnt work.. you have to be friendly.. build a relationship.. and once someone begins to like you and feel an emotional attachment to you they will tell you everything they know.. thats just how people work.. often when i was a consultant and i needed to get one of my very well paid rebuilders to help out another employee that didnt have much experience.. i would bring the new guy in and forbid him from asking the experienced guy for help.. he was not to become a distraction.. if he needed help then he could use a manual or just work on it until he figured it out himself.. then i brought in the more experienced guy.. and i told him that i was putting the new guy next to him, but that he was not to let the new guy distract him.. of course he let me know that he had no intention of helping him at all.. after a couple of days of talking about everything but work, they would begin to develop a friendship.. and then before you know it, the new guy cant figure something out and the experienced guy will see the struggle and walk over and show him how to do it.. sometimes ive even seen experienced rebuilders share tools and stay after work on their own time to help the new guy.. because the new guy tried to pry information and help from him? no.. because they became friends.. i suspect that the same is true with traders.. become their friend, and they will cheer for your success.. try to pry the information and they will prophesy your defeat.. just my .02 =)
-qwik
Good post, qwiktrade!