Hello Mike,
Today's journal entry is dedicated to you(and a couple of others on ET).
You were right and I did crush my account(I still have my account but there is no point in trading without an edge). All of the choices were mine and like most of my major losses it was a result of mistakes that I made that I could have done differently. So your evaluation of my abilities in trading appear to be correct.
You may also enjoy knowing how poorly I feel for letting myself and my family down and that had I stopped trading I would have more money than I do now.
I have had some very good successes as well as failures in life and I have failed at each attempt to be a trader even though I have attempted to do so many times. This was my most ambitious attempt in that I used a large amount of my wealth and dedicated huge amounts of my time to this occupation. I can even say that over the last year and a half I have improved greatly but it was simply not enough.
I believe that most people would try to not give you the satisfaction or acknowledgment. I don't recall at the moment where I learned this but your (not you personally) relative happiness has no actual effect on my unless against logic I would choice it to be so. So you might as well have some enjoyment. You took the time and effort to make the post so here is your reward in my saying you were correct. And actually I don't recall feeling this bad in years so someone might as well feel good about today and what happened to me.
my journal entry:
I was beaten to a pulp with SWM today.
I totally stopped trading long fades a little more than a year ago because of the huge drawdowns and my inability to correctly calculate the probabilities of correct entry and sizing(at first I more or less did a mirror image of the short signal). I went over a year without no long fades and just a few months ago I developed a revised formula that appeared to show promise and correctly provided high probability entries and exits. I started to trade longs again and my confidence increased. Both my long and short signals are grey boxed meaning the entries are âmechanicalâ in that the computer calculates the entry and the exit but I have to manually enter in the orders and the prices and manage the trades. often I deviate from the mechanical setups including moving my entries, exits, and sizes based on what I am seeing in the markets. I have been doing this less and less as I have found that the plan works best when just left alone. As like any type of probability sometimes the adjustments work in my favor and sometimes they do not. I have found that a common change from the trading plan is not from me trying to move away from the rules but rather making mistakes during the execution. I have found since going back to school this happens a lot more often than it did before and it was already happening too often. Knowing this I spent a lot of time in the last few months trying to find a way to automate the trading and lower the amount of changes/mistakes from the criteria. I spent about 20 hours Saturday working on Ninja Trader in an attempt to try out some automation and made some progress. The problem I have with automating the trading is the same I have with being able to trade flawlessly. The rules are complex (plus I am not a programmer which makes ever signal step a learning process). My other problem with manually trading several different setups is keeping it all straight. I think I once again found my limitation today in trying to do do many different things at once. HAR was one kind of setup, BIDU was a totally different one, and SWM was not only different but was a long instead of a short.
SWM I think a year ago I would have actually had a chance to have walked away with a gain with SWM. Today that was not the case. So many things went wrong with this trade I donât even really know how to begin.
The start actually went pretty well. SWM gave a long signal.I entered correctly but I made my first mistake when I raised the profit target offers beyond where they should be after I covered half.and so instead of taking a nice gain on a small amount of shares it moved against me. I count that as a partial mistake as letting winners run is something that I have been working on doing with my signals. I did have a possible $1 gain+ though and I should have at least exited near break even. Mistake one. The rest of the trade became doomed when I then became too aggressive in buying it at first and then not enough towards the bottom as I was holding out for a 50%+ drop. I did cover and scalp some on the way back up but very small amounts and it was not enough. Part of the problem and opportunity with trading intraday is that nothing matters except fear and greed. After reading the press release on earnings I could âseeâ this was not a true change in the company but stops upon stops getting hit and panic setting in. When it did retrace it made it up to about 52 and my average was 52.50ish plus closed out losses for a ave of a little less than 53. It made it up to 52 and then dropped right back down again. Had I done just a few things differently I would have been able to get out at under 52 with a gain. Had I closed out the first shares at target or at least before turning against me.(it has been very unusual for me in the last few months to allow this to happen. But I also donât trade long very often and I think that was part of my problem of not trading it as I should have. Total case of my thinking getting in the way of making good trades). After believing that the pricing was panic and believing that opportunity was available I ended up putting my foot in the ground with the thought that I would do two things. So I ended up riding the stock all the way down again. It was too late to recover by the time I figured this out. One problem I had against me was I was in multiple trades. HAR and BIDU. All three where going against me. I was somewhat ok with HAR going against me as I entered into it with the plan of it being an overnight and I wanted to scale into it. As it turned out I didnât even do that correctly as I was too busy with SWM.
Margin. I was running into a margin issue as I could not carryover a large amount of SWM as I pulled money out of my trading account when I was trading poorly before. As a result I started to scale out and scalp SWM actively. I also felt that it would retrace tomorrow but since I was so wrong about it today I canât say that I had much heart left in trying to âget it backâ. On most of the moves higher I sold some off and when it fell back down I bought more until the last half hour of trading and then I was selling about 3 for every 1 that I bought. Much of what I covered was near the bottom of the move which for me demonstrates again how poorly I traded this overall. Some other miscileanious things/mistakes. When it climbed up after the first move down I bought more in the 50.65 range trying to lower my ave cost and thinking it was going to recover. I also did not cover those shares when it fell back down off of 52 even though the thought did enter my mind. I would have taken about a $2K hit at the retrace up to 52 mark and I did have offers above 52 leading up to my breakeven and beyond. I thought of having one offer right below 52 due to it being a round number and the relationship with some of the other bars but I kept it about 52.09 or 52.011 (i think) and it went to 52.05 before falling back down again. normally I would want to start covering below the round number but I allowed the PnL to effect that choice along with most of the others with this stock. I am not sure what else I could have done wrong with this trade. I could have taken a hard dollar amount stop, entered into the fade according to plan (without forgetting that long fades can really move against you before retracing), and many others that I am sure I will think of later. I am still long from the original thinking that it would retrace when the panic washes away but I am questioning even that right now. Another thing about SWM is it really is an outlier in terms of standard deviation for a stock that has âno newsâ that is widely known. The last time I saw a stock behave like this was over a year ago. It doesnât make how I traded it today alright but it does show that we donât see this kind of price action often. SWM â 12278
BIDU was a carry over that like SWM I trade to trade through. I did unlike SWM take a stoploss when it was moving against me to prevent it from getting worse. As it turns out that was incorrectly timed as I stopped out near the high of the day. â 665
HAR I covered some of the HAR overnight trade for no other reason then I wanted to lower risk. Nothing else was going right today so I just took some of it off the table. Still short into tomorrow as planned but not scaled in correctly so I have fewer shares but at a lower cost basis than I would like. I will cover tomorrow as if it was correct even if that means its a loss. As bad as today was and even though the entry should be better I feel like I will get some positive results from it tomorrow. At least the probabilities are favorable that it will not go against me tomorrow. It is starting off on the wrong foot thogh which adds to my frustration today. â 224
PM overbought MW + 59
UAUA started trading/scalping it before SWM and stopped to focus on SWM. I donât know how much more I would have made but I would have made more had I not stopped. + 22
I will be closing out these trades that I have and then will will focus on getting the signals automated. As I write this I have in the back of my mind my three school exams this week that I have yet to do(I took one last night)
- 13086
