May Recap

MAY TOTALS:
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Gain: $4981, net of commissions
Trades: 90 for 134; 67% winners
Ave gain per day traded: $356
Ave gain per hour traded: $150
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Days traded in May: 14 out of 20; 70%
Days traded with a gain: 13 out of 14; 93%
Days traded with a loss: 1 out of 14; 7%
Hours traded in May: 33.25 out of 130; 26%
Largest daily loss: -$5930 on May 18th (only day with a loss)
Smallest daily loss: *see above
Largest daily gain: $2995 on May 28th
Smallest daily gain: $190 on May 14th (the day with the least time spent trading: 1/2 hour)
Most active day: 17 for 30 on May 19th ( the only day I traded the full 6.5 hour session)
Least active day: 2 for 2 on May 26th
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Notable:
My time in front of the market seemed to shrink this month as day-job got busier. Because of this, I'm now tracking hours spent in the market as well as days to give me a feel for my efficiency as well as what the time commitment of my practice trading really is. My number of trades is down also, partly because of less time in themarkets but also because of more patience and discipline in my entries. This is a very positive change in behavior and the one thing this month of which I am happiest. There are still some "flunky" moves, of course.
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My average daily gain is down again this month, in part because I have been spending less time trading in the days which I can get into the market. I was in the market only 2.5 hours or fewer in 11 of the 14 days I traded. By the stats, with a 67% win rate and only one losing day all month, less time in the markets means less overall gains from missed opportunity. Day-job is at fault...
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With only one losing day all month, my gains should have been much bigger. Same old story as prior months... one or two really nasty losing days can offset a relatively high success rate of wins to losses. I'm hoping that becoming militant about setting stops will produce better results in June and beyond. I'm not ready to be a real trader until I can set stops and mitigate losses effectively.
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I have calculated the monthly stats in dollars rather than cents per share, although much of the month was not originally measured in dollars. This is the progression toward trading real cash.
Also part way into this month, I switched to measuring wins and losses by the cumulative position and not by the individual trades which make up each position. As such, the monthly stats are not precise.
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Overall: I am improving as time goes forward and I am happy about many parts of my practice trading. I am MUCH more comfortable getting in and out of trades and often find myself not looking at my gains and losses at all, just price and volume. I find I rarely get emotional about the various trades I put on. Mostly, I am just analytical about my activities in the market.
In mid-May, I decided to commit to trend trading and to wean myself from the practice of adding to losers to average a better overall price. This requires a concerted effort to use stops. My frustration with this change is exhibited on May 18th, my only losing day. It was a bad session as I tried this new approach for the first time and got chopped to bits after repeated hits on my stops. The next day May 17th was a tough one managing stops also although I scraped together a $770 gain. I fear it will take some time to master this new method...partly because I am so strongly compelled to revert back to my old trading style of averaging down by adding to losing positions. (like today for example)
Holding winners through a trend also seems to be tough for me. I attribute it to not having a "feel" for slowing momentum. As such, I take smaller gains when I have them. I believe the remedy is to focus closely on what happens as momo slows... and to study charts after-hours; my own and those at Fear & Greed Day Trader.
I do hope all of you had a productive month and I wish you good trading in June!

May 29th

Here's what carelessness and inattention will get you. Not to mention selling out a winning position instead of holding. In the morning, I had some early positive trades but closed it down for the late morning into mid-day for a lunch appointment. Back to the markets around 2:30 pm, I had a couple winning positions, one of which was a terrific entry short at about 2:45 pm on SKF; average price of $43.66. As it turns out, this was the beginning of a tremendous end of the day drop as the markets surged! I had a three-part position short but sold it for a small gain of $360. Had I held to EOD, that would have been a gain of about $5730! But I sold it... and then started trying to play some reversals on the way down. Getty sloppy and inattentive, I got sidetracked by playing GS at the same time. Now, this would have worked had I been playing only one or the other. I was caught off guard when I hit the margin limit on my account and I could no longer average down! The 3:30 pm candle would have given me a gain in either stock had I more funds to play with. So, instead of selling out the positions, I decided to see what would happen... I had never had any shares liquidated to meet margin requirements; two forced sales are the two losers on the tally above. Now I know how it works! Ha! Anyway, I took a day-job phone call and didn't sell before the close. I'm carrying big open positions into Monday with no way to monitor them as Monday's work appoinments will keep me away from the computer until mid-afternoon or end of the trading session.

This is a learning experience for a few reasons:

-1. I still must hold winners longer. I sold two positions much too soon today, especially the 2:58 pm in SKF. Had I held that one, I would have avoided my current negative situation; a result of messing with the reversals. (instead, I would have been riding the trend short with a nice winner) I still haven't had the the experience of holding a really long trend and am looking forward to it. Over the past month I have had some great entries which could have given me that elusive momo gainer, I just haven't HELD until a clear sell signal emerges. Part of this problem is in identifying the proper exit point. More study of Scott Farnham's blog is in order.

-2. Playing for reversals requires enough money in the account to execute an entry... duh?! The margin of safety is pretty thin when doing this type of trading because the reversals in a strong trend don't last long. Quick, flawless execution is necessary. Another reason to abandon this approach, perhaps?

-3. Adding to losers is a big mistake and I still do it... despite my ultimate goal not to. This really is ego driven, I cling to what has given me gains in the past because I like the feel of putting up winners; though it is ill-advised because of large loss exposure. I simply must set my stops, then either reverse direction or wait for a better entry. Darn, I was doing well beginning to break the habit last week! What happened? ...Ego happened, I think...

-4. Distractions are dangerous, especially phone calls. Two open positions required sharp attention, today. Admittedly, I would not be answering the phone with open day-trades had it been real money. Still, it is a good lesson.

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Let's see where these trades end up on Monday afternoon. IB will continue to liquidate shares if the market surges. Doesn't matter, I won't be here to close the positions anyway, whether it goes for or against me. Monday is June 1st: I'm counting gains and losses when I exit the trades so I actually finished the month of May on a winning note... ha! It also means I may be starting June with a loser :-) .

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4 for 6, 67% win rate. Gain of $432 in 2.5 hours of paper-trading. Two open positions.