Tough paper-trading days ...

Friday was a tough day... I found myself playing for a break of consolidation in US Steel (X) and getting on the wrong side of that eventual nice move. I was mostly studying the reasons for my mistakes as opposed to trying to trade for gains. Right now, I am focusing on entries, entries, entries. For this reason, I let the trade go. I later just exited in order to take advantage of what I thought would be a nice pullback in the primary trend (no way was I going to average in by adding to the loser). Then, the pullback was slight, my small unrealized gain on the pullback disappeared, and the stock went back to trend, against my reversal play. Just terrible decision-making. I was frustrated with my misreads.
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Today, I got a couple right and a couple wrong in the morning session and was about $50 ahead in paper gains when I found FAS and decided to try it out. I started by trying to play for a break out at 12:40 but it immediately went down at the point of entry and dropped. I stopped it out late, so sure that I was right that I let it test beyond the outer edges of the stop area. When it came back to me I took the stop-loss. I then went on to get a quick winner by reversing direction. I was still ahead by about $20 after those two FAS trades. Then, I took a break and watched FAS climb during the 1:20pm - 1:35 pm time frame. Off that nice rise, I went short after the high-volume spike. In short at 76.55, I saw it drop down as low as 76.41 leaving me up about $130 in unrealized gains. I thought it would break down from there and I held as it rose some during this consolidation phase. I was trying to read the familiar signals, looking for doji's, near-doji's, etc. At the 2:05 candle, I recognized a turning point was approaching. I held short, expecting the fade to continue and looking for the big break downward. Not to be, though. It popped at the 2:10 candle but not enough to stop me out (15 cents, not very much on a stock which moves as much as this one). Then, it started to fade for two candles of low volume and it touched my entry price at the doji-like candle at 2:20pm. I held short, trying to read the raw data feed and knowing that this was going to explode one way or the other. It was holding just above the 7 EMA... then it blasted up! Wrong way for me. I was actually reading an email when it took off and I noticed the move late. What a move; a $1.15 breakout candle. I shook my head in disgust, rode the pullback down in the next two candles and looked for it to tank after such a bullish move. Nothing doing! It then just kept going. I exited with a big loss after the following large green candle. The stock again pulled back two candles so I took it short again but waited until it retreated to the 7EMA. Bad decision to play reversal again. It blasted off leaving me with another loss when I exited. I stopped trading there, and good thing I did... it repeated, pulling back two red candles then taking off.
Why did I not go with the trend at any time throughout this whole rise of $3.44 over one hour and twenty minutes? It's a rhetorical question. I don't know the answer. It was exactly what I did on Friday for the large loss; playing against trend. This is my pattern, it seems. I have always tried to play for reversals since I started to learn day-trading in January.
Trading for trend is my goal and it is what I was trying to do just before the big breakout of consolidation against me in FAS earlier. But, instead of taking a quick loss and reversing direction in line with the trend, I kept looking for the reversal. And I don't think it was because of fear of cutting a loser short and taking the loss. I truly believed and expected it to break down in my favor! I kept thinking that, as it rose and rose!
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In any event, it is paper-trading and meant to be practice. But, at this point after doing it about 9 months, I really should be doing better than this. ( to my favor, I have been only trying to trade this style for less than 2 months.)
I really believe I am gaining a lot of knowledge about reading the tape and trying to trade momentum moves in succession. However, I am frustrated that I have lots of knowledge about what I am trying to do but no ability to actually do it.
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I am now taking a break from the blog for a while. And, very likely a break from trading. It is costing me a great deal to do it in the manner I am trying. I am not playing safe, trying to pick out the very best entry spots and capitalizing on them. I am trying to trade the tape. And, I am getting nowhere, it seems. The cost? Projects around the house are piling up and business is suffering because my competition is not taking lots of time to learn to trade!
I spent about 16 hours over this past weekend studying the charts and the raw data feeds for them. I was studying the charts at Fear & Greed. All of it was no help to me today. And, I didn't get a thing done on Sat & Sunday that actually has an immediate impact on my life.
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I can't see my trading nirvana from here. It is worlds away, it seems.
So, I'm gone for awhile. I sure wish it was for the same reason that Scott Farnham went away... :-)