December 28, Tuesday

This is from Tuesday, I didn't practice-trade yesterday and it is doubtful that I will today.

TNA was "behaving itself" on Tuesday and I had all winners on clean practice-trades (no averaging/scaling in), though small scalps for a number of them. I was out far too soon on a few! Staying engaged in order to realize some real gains is one of the things I must work on.

December 22 & 23 (last Wed & Thursday)

There has been a lot going on and I have been

"Blog Lazy" since early last week. Hope all of the Christians out there had a great Christmas celebration. For the chosen people, I hope you had a festive hanukkah.

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So much time has passed since I practice-traded last week that I don't have much comment on my market activities.

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Snow storm is to hit the Northeast tonight and tomorrow, though the way some are acting one might think it is going to dump three feet on the State of Maine. Last I heard, we were expecting about a foot. When I was a kid, that was considered a dusting! We didn't even change out of summer shorts for that little amount of the fluffy white stuff! :-)

December 20

In TNA today, I made 5 practice-trades as well as closing out the short from Friday; all for gains, though some pretty small. In fact, with my positions now at 25% of my standard trade of 1000 shares, all are relatively small. All were reversals of moves that had run their course.

I was away checking on a day-job customer between 1:30 and 3:30 pm and missed that very nice 10 minute run on huge vlume at 2:00-2:05 pm.

I'm always on the hunt for volume spikes, doji cnadles, near-doji's, signs of price rejection (long-wicks), waning volume and shorter candles at the end of trends, as well as opportunities to catch moves early out of consolidation (though not much of the latter today). After a while, these things start to be commonplace and I count on them to appear. Familiarity, I believe, is part of becoming good at this art. There is no substitute for time spent watching a moving market.

December 17 - Friday

Here is the delayed post of last Friday's limited practice trading. It was a busy afternoon, having to finally make a run to a recycling facility so to properly dispose of my own home-construction waste as well as that generated from customer projects over the past week. Why do I bother mentioning that? Because the facility closes at 4:00pm and I decided to leave with an open short trade in TNA with an entry at $71.12. I returned after the market close to discover a decent gain accompanied by an acceptable sell signal (ramping volume with moderate downward price rejection) was presented around 3:10 pm then later a more dramatic sell signal (volume spike plus significant downward price rejection) at 3:35 pm. After that final sell signal, a reversal had taken place and I was near breakeven in the trade.

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Monday morning finds the futures up and my practice-trade now sharply under water. I have a customer appointment this morning and have been given permission to come and go as I please because they are not at home anyway. I haven't decided whether I will stay and watch the stock at the open or whether to just let it go and return when the my real job is done. Either way, the trade served its purpose and ended its usefulness when it went positive and presented an opportunity for gain on Friday afternoon.

December 16

One relatively quick trade between day-job duties. My goal was to enter and hold a while. It was tough to watch a 40+ cent gain with a volume spike exit signal and not execute a cover order! But, I want to develop some patience... I held and eventually it started back down in my favor after the 1:50 pm candle top. I had to get to the day-job so I exited at the bottom of the sizable red candle. Looks like I would have had more available had I been able to stick around the office; the move didn't bottom out until 2:30pm.

December 15

I sensed a great spot for a breakdown in TNA and took the paper-trade short around 12:20 pm. I was early and sat throught another 10-12 minutes of consolidation waiting for my trade idea to unfold. The delay made me "antsy" so I covered for a tiny gain. Too bad... I was in the infant stages of a teriffic breakdown, just as I had predicted. Emotion-fueled impatience ruined a nice trade. I made an attempt to target the reversal of the big move I missed and the entry was early, (wrong) so I used it as an opportunity to scale in knowing that the move was getting "stale" and a reversal would come. As the turn was made and the stock started going up, I scaled out at $69.42 with all but one full share which I held until after the 17 EMA cross. This was a bit early on the final exit, but I avoided holding through a pullback which brought price back down to my initial scaling-out area. As the minor trend I was playing came to an end, I shorted... once again a very nice entry but out too soon on a end-of-day drop; a drop which included enough downward pressure to include a nine cent gap down at 3:40-3:45 pm which didn't get closed. I got a nice scalp long at the end of that quick move down, exiting near the eventual closing price of the candle. I was done at that point and didn't participate in the final two candles of the day.

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Thoughts: My entries are getting better and my "gut feel" for momentum is improving, albeit slowly. I still have difficulty with patience, getting in and out far too soon in many instances. And, I still am lax about setting stops. This is my major mental/emotional hurdle to clear. I simply don't want to realize defeat on bad trade ideas; it believe it will be my last conquest in the struggle to become a live-account trader.

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I have day-job for most of today so it will be unlikely that I can practice-trade. If I do, it will be briefly.

Good luck to all!

December 13 & 14 (Monday & Today)

I've been tardy getting my posts up in a timely way. Here is yesterday and today. I was unable to spend the either entire day on practice trading but I am always happy to have the time I do get.
I have reduced my standard trade size to one-quarter of that which I have used for most of the two years I have been practicing: now 250 shares down from 1000. With the exception of the cover of Friday's short in TNA.

December 10 - Last Friday

I forgot to put up Friday's simulated trading results. I am currently short a practice-trade in TNA from Friday. Could be a rough opening for my position, given that the futures have been strengthening all morning. I am with a customer for the early morning then back around 11:00 am or so. I'll have to wait and see how my swing-trade fares.

December 9

I struggled some with the accuracy of my entries but bought my way out of it by picking my spots carefully as I scaled in. Certainly not ideal, but effective. At some point, I will accept momentum and choose to play with trend more often than counter-trend.

I took it on faith that I would begin to feel when direction changes are to take place and I am starting to get it, for the most part. Much more to learn though, that's for sure.

December 8 - later

I was able to take 2 more practice trades in TNA after my work appointment. Mostly I watched the market closely, seeing other areas to get in but satisfied to just study.

December 7(yesterday) & December 8 (thus far)

I'm late for a customer appointment and can't comment. Maybe more later if I can think of anything to offer.

December 6 (yesterday) & today so far (Dec 7th)

I didn't get to post yesterday's practice-trades in MCP until now. I got to the computer after 1:00 pm yesterday and shorted into a huge upday in MCP to take advantage of a reversal area at 1:35-ish. Also, at days end I saw an opportunity to short for a profit-taking breakdown. It didn't come so I held overnight and was rewarded this morning. I didn't get an opportunity to cover at the 10:00 am bottom because I couldn't sign on to my platform until after 10:30 EST. I expect it to break down more, though one can never be too sure. Certainly not sure enough to hold a short for a long swing-period! I don't know enough about the fundamentals of the recent bid for Molycorp to risk a longer term hold on a stock that ran up the amount it did yesterday.

December 3

I had until about noon to look at the markets and decided to work with LVS. It went well: all four practice trades were clean and no losers. I did exit far too early on the first three because any of them would have been great trades to hold through the noon hour. Hindsight is 20/20.

No matter.

On the fourth, I took a reversal play, exiting quickly considering the primary move of the day was down. Smart to do so because LVS did continue "South" for another 20 minutes or so before consolidating for 2 hours. During that 2 hour period it built a nice "triangle," using the 48.75 - 48.80 area as a base and the 2:20 pm doji at 48.84 as the acute angle/take-off point. An hour and fifteen minutes of almost uninterupted climb took place after that.

December 1

I didn't have a lot of time to look at the markets today; maybe the last hour and 45 minutes.

TNA wasn't moving too much but because I am trading for practice and not for $, I decided to stick with it and try to pick up some experience. I got a bad read and went short. It went in my favor about eleven cents and reversed. I should have stuck to my quicker exits that I typically operate with. However, I held and it reversed against me. So sure was I that my read of a fade into the afternoon was right that I held anticipating the downturn. Well, it didn't come and I didn't stop it out. I bought a better average price at what felt like the top then waited. The turn did come shortly afterward and within 7 cents of my second short entry. After the turn, I looked for a chance and exited when it felt like a short-term bottom was in. Good read of momo there, because price did climb for 20 minutes from that point before topping out and dropping into the close.

What I take away from this is:

1. take some time to feel the movement before jumping in

2. faithfully set a stop

3. play the moves I see and not what I expect will happen because I tend to be early/wrong.

For the most part, I am starting to get a feel for movement. If I am wrong at first, I seem to later be able to get it right after paying closer attention. But, I need to be sharper with my entries... or, maybe I should be more selective about the set-ups I think are worthy of playing.

Certainly, I must be more in tune with playing the extremes of moves and not the S/R levels in the middle of trend. These are low-percentage plays.

To close this out, I'd say lack of patience seems to play a part in most of my faulty paper-trades.

November 30

I was office-bound for the first half of the day so I had the trading platform up and running while I attended to other tasks. I saw some opportunities I didn't take but did manage to get these practice trades in.

Nothing notable with the exception that I thought the second trade entry was a horrible one and I was very uneasy for the 3 minutes I was in it. I have no idea why it felt wrong but I just had to exit. Strange that it would turn out to be a good entry on a ten minute move up. I will be giving that some thought as the hours pass this evening. The third entry was a good one and felt right also. I took it 30 seconds before the candle change and just before it broke out of consolidation. Then it dipped slightly as it entered the new candle then moved up and away. I sold the initial big candle, sensing that a reversal was coming after such a nice move. It did reverse slightly, pulling back to the 7 EMA, then rose nicely for an hour and fifteen minutes. By that time, I had already left for the afternoon, so staying in was not an option anyway.

November 28, update

I stuck around until the open this am after seeing the futures on CNBC. I'm now out of my TNA swingtrade.

Something tells me that the market wants to close that big gap-up from last Wednesday, and is flirting with that area right now. I really have to get to the day-job and can't stick around to watch the action.

Good trading to all!

November 24 - 26

Still short the TNA from the other day. I was certainly wrong from last Wednesday and price rose substantially. That day I did buy a better price short in TNA but I haven't done anything with any other stocks over the Thanksgiving holiday. Price dropped Friday which would have let me out even but I decided to hold. I think things are getting weaker and that this paper-trade will bear fruit soon.
I am away much of the day with work, but will return later. Let's see how this goes...

November 23

Off and on through the day, I did some practice trading and was completely out of sync with TNA, the stock I was working with. Other than my 12:54 pm short, I was wrong on my reads, mostly because I am predisposed to look for direction changes rather than riding momentum. Although, on a few of my paper-trades today I was trying to enter at S/R levels and was getting caught on the wrong side of the breakaway. I basically sat on some losers until they reversed in my favor or cheated by "buying" my way out. Today was one I want to forget, the sooner the better.
I am also short some TNA overnight at 56.27, which in hindsight is not the best place to be given the market's penchant for closing opening gaps like the one from this morning. I'm thinking it will be down some after the open considering the run-up in the last ten minutes in addition to any carryover of nervousness from geo-political tensions in S. Korea.

I have an early am day-job and might not be back for the open. It is my intention to take any gain I can no matter how small.

November 22

I had some time in the afternoon to sit in on the markets to practice. First around lunch, then later near EOD. I thought that RIMM was poised for reversal based on the chart and feel of momentum. I was, as has been the case recently, just a bit early; what I have come to characterize as "early wrong". I took a long trade at 58.51, corresponding to the price at the near-doji yesterday at 11:40 am. Nope, that wasn't the level traders were seeking: RIMM dropped further to significant levels from Nov 15th (see doji at 1:10pm), the 16th, and the 18th. I felt momo shift in my favor around $58.20 so I took two more longs at 27 cents. Price dipped only six cents below that level in the next candle then moved up. I exited early for a small gainer.

I then left to remove a desk from Mrs. Bluecollar's old office in Portland. When I returned near the end of the day, I found that my exit from RIMM was close to the low of the day and its price had climbed about $1.20 per share from my exit.

I then went to TNA which was moving up near the close... the run-up was getting stale and I didn't want to push my luck by going with trend. I waited until it felt like momo was going to shift then I set a mental stop (red line above) while taking a short. Price rose against me about nine cents before dropping into the close. I got out about 13 cents shy of the bottom of the move but I'm satisfied with my 20 cent winner to end the day.

I'm twisted and think this is funny...

I found this on http://www.pointsandfigures.com/ and got a nice chuckle from it; 2 minutes 45 seconds of fun, especially for aspiring traders.

http//www.youtube.com/watch?v=85lpWoESHUM&feature=player_embedded

November 19th

Like yesterday, I was in the office briefly between day-job appts. and took a practice trade short in TNA and had a very similar result as yesterday. That is to say, it stop-limited out automatically while I was away. It was a short just prior to a pull back but it was not the drop I was looking for.

When I returned to the office, I traded manually(?) and took a short that proceeded to give me a small gain. I was out a bit early but the stock did reverse and head up so I made a good choice. At EOD, I shorted again, sat through a slight move up that didn't trigger a stop, then got the drop I had anticipated and covered in the last 30 seconds of the session for a winner. Positive for the day in my practice trading.

One thing for sure, this works much better when one is present to actually perform the trading. duh!

November 18 - Set it & Forget it

I stopped in to the office for just a minute to reload with supplies for the day job project I was working and turned on the markets. TNA looked like it was topping out and was ready to roll over for the day. I decided to take it short, set an automatic stop just above the HOD, and go back to my duties. It seems that TNA had just a bit more life in it before turning over for the day. I got stopped out for a loss on a price that turned out to be quite close to the HOD in relation to the amount of the climb from Wednesday's close. My sense that the charts were signalling weakness was reasonably good... Sometimes there's wrong, but sometimes there's early right. Both are wrong but one is more wrong than the other. :-) ...How's that for a rationalization?

It has been my goal for a long time to grow accustomed to taking losses; it is the next step in my development. I am thrilled at taking the loss in this manner. I gave up control in two ways... a) I took a trade and walked away b) I set the stop and didn't move it, didn't cancel it, and didn't fret over the loss.

Taking more losses is something I am going to work on as I go forward. It is crucial to good trade management and it will sharpen my entry skills, if I want to improve my win percentage.

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With regard to the trade itself, it was folly to see a chart for two-three minutes, take a trade counter trend on a huge trend day then walk away. But when there has been a tremendous move in one direction with barely any chart reversal, it only makes sense that those who have been sitting on unrealized gains will want to lock them in. The markets turned in the candle just after I stopped out and as I write this on Friday morning, the futures are pointing down.

The markets undulate and we as traders in training must learn the patterns of that up and down movement while trying not to get "faked out of our shoes" by those who are smarter and more experienced.

Saw it, Liked it, Reprinting it here...

Second day this week that something caught my eye at another site and liked it enough to reprint it. Joe at http://www.upsidetrader.com/ has a funny, entertaining post about the various traders that come and go (and stay). I have been reading him for many months and love his insight as well as the high quality of his writing.

I picked out a couple that are PERFECTLY me, which is why I don't yet trade real cash. Yesterday, especially on that last TNA trade, I was "Bob" and "Brittmeister" at the same time. Like his "Bob," I am also of Irish descent (partly), which makes me laugh a little more.

Posted by UpsideTrader on November 17th, 2010 at 8:47 pm
We see ‘traders’ raked in on CNBC everyday, they wear cute suits, sweet ties, and pocket hankies. There hair is always parted on the left and they all have a great head of hair. They shaved for the interview, but when it’s over, they probably asked their town car driver why they were asked to be on an interview about trading. You see, they aren’t traders at all, they are pundits disguised as traders. Noah Blackstein was on CNBC today, he was, and is a perma- bull that disappeared throughout the crash, but now he’s back. He was wrong forever, but given the slowness of the news cycle (ex GM IPO..please gut me) he got some play. He’s not a trader, good traders don’t have time to show up on CNBC. Ever see Steve Cohen or Paul Tudor Jone just stop on by? David Tepper stopped by recently because he is obscenely rich and probably owed someone a favor. The market rocked because he is good and never shows up in the media, so people thought Christ came off the cross and bought.

The real world isn’t CNBC or Bloomberg TV, it’s guys we all know that trade, that’s really what makes the market. So I figured I’d talk about some traders I know that have massive failures and mind boggling successes, sometimes on the same day. These are all friends of mine.

Bob- Only trades the opposite of momentum, if AMZN is up $8 he MUST short it, even though it’s going 20 points higher soon (and he knows it), he thinks “it’s up too much”. I attribute this to Irish guilt, and stocks, just like Bob, don’t deserve any modicum of success whatsoever.

Scooter- Only trades massive sell offs in stocks, a professional falling knife catcher and does well at it most of the time. He believes in the underdog and swears to God those stocks are overly misunderstood.

Brittmeister-chases breakouts when he should wait for the pullback, he knows the stock is going higher, but feels he is the only one on Wall Street that saw the breakout, even though everyone on Gods green earth sees it and waits for the pullback.

Kidder Peabody Guy-kind of a value guy, lost almost everything in the crash, but still swears INTC, MSFT and CSCO are a screaming buy and going back to $5o. He has a comforter at the office for when it gets chilly.

Shark-he thinks he sees what no one else sees and pounces on every downtick, he usually makes money, but needs to be more patient.

Shorty-we call him perma bear, he finds death in everything and cried at his wedding.

Happy Pants-every pullback is a buy no matter what, even if the World Trade Center gets hit or the Straits of Hormuz gets blocked, although he would short oil because everything will soon be fine. It end poorly.

OEX Boy-trades $10,000 in commissions even though the SPY that day had a 4 point range, broker loves him.

Couldabeen-never trades his heart, at the bar, talks about what he was gonna do

Becky Quick-still thinks he may get an edge from CNBC.

Nostop- loves his shit and analysis so much that he must be right, small losses turn into short sales on his house.

Penny-has the cheap one that will be MSFT, doesn’t trade anymore.

Steady Eddy-fights the fight everyday, respects Mr. Market and learns from his mistakes. Tries never to make the same mistake twice. Puts his mind away every morning, and lets the markets mind take over his mind and envelope him, as it doesn’t matter what he thinks at all. Toughest thing in the world to do , but the best traders have mastered it and he aspires to that.He welcomes mistakes as he knows that will make him a better trader. Trades small or not at all when he is having a challenge. Steady Eddy will be the guy that always makes money. He knows it’s the greatest living in the world when he is at peace with his trading.

Don’t quit.

November 16

Paper traded a 25% position (250 shares) in MA early for a winner. Then moving over to TNA I paper-traded short near the early high, getting my best entry price in recent memory. It wasn't a "bragging" price in that I didn't peg the absolute high before shorting. Rather, it was a price that repeatedly resisted market attempts to soar above it. I had the morning resistence level as my entry. Price dropped away and I did not scurry out of my trade. I held as the next candle tested the price, then did the same in the second candle as price actually fluttered above my entry, then dropped. I covered in a similar fashion to my entry, not at the dead bottom, but close enough to yield a quality trade.

As good as the first trade in TNA was, I put forth an equally pathetic effort for the second. I succumbed to my urge to fade the move on what turned out to be one of the biggest candles of the day in TNA. What? Yeah, I know...asinine. I held it, didn't add to the loser to average a better price, then added to the winner when it went positive at roughly the same price as my original trade as price glided lower. In just a moment, it quickly reversed and shot upward as if shocked with high voltage! As we used to say on the basketball court in my teens, "I was faked out of my shoes!" Price rose but resistance was hit and price recoiled from it. The next candle was my salvation, and I scaled out near the low of the move for two gains. It seems that $53.70 -ish was a very strong level today and provided a nice backstop for my screwed up trade.

What I take from today is that I had a strange sense of calm about my four trades, especially the last "debacle." I felt as though I knew with a high sense of probability that I was safe in my trades, that somehow I had the odds on my side based on where I entered.

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I was busy with other things in the afternoon. I stepped out to run a few errands and was sorry to return and discover that I missed the nice drop in TNA just after 3:00 pm.

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Tomorrow I have a large day-job project for a neighbor then an estimate for another customer after I'm done. It is highly unlikely I'll get to see the markets tomorrow.

Recent TSA vs. Airline Flier issue

I like the sensible approach that one of the wisest men in America iterated last night on tv:

"Focus on the terrorist and not the instrument that might be used to commit the terrorist act." - Charles Krauthammer

Could anything be more sensible than that? I think not.

November 16th

I had a few minutes at the end of the day to look in on the markets. I decided to watch RIMM in anticipation of a practice trade...

I felt that RIMM had found bottom of the afternoon minor-trend down and that a long trade was in order. I did just that, but I just hate sitting through consolidation. I decided that I didn't like where I was and sold on a high point of this consolidation phase. My stop was at 56.07 - price never dipped low enough to hit it after my exit. This is frustrating and shows the lack of trust in my ability to read stock movement. I chickened out on what turned out to be a pretty good read of the reversal of the late afternoon move in RIMM, albeit a bit early. All I can do is try to gather more experience and overcome my hesitancy.

Too bad about today... I had up to 34 cents available to me and I only took about 7 cents.

Saw it, Liked it, Reprinting it...

I saw this post by Austin at http://www.coiledmarkets.com/ and really liked it.
NOW I have to go to work!


Tuned In, Tuned Out
Posted on November 16, 2010 by austinp

Money is made from the markets in one way: listening to your charts. They will tell you everything you need to know. Sometimes the charts give fair warning and plenty of time for preparation. Other times your charts will make a sudden announcement with no fair warning at all. Sometimes you have all the time in the world to plan your next trade sequence, while other times there is no time for preparation at all.

But your charts will always tell you what is happening in real time.

Where traders get themselves in trouble is trying to go outside the charts for advanced warning, i.e. prediction and forecast of what’s to come. Now it is perfectly fine to map out scenarios on a long-term chart to mark waypoints such as key S/R, open gaps, historical highs and lows, etc. What gets a majority of traders in trouble is the temptation to make forecasts and predictions about what should happen according to this, that and the other reasons.

A fixation on market news will not give you an edge. Hanging on every word from the ilk on CNBC, Bloomberg, various websites or public message boards won’t provide any edge at all… it will actually blunt any edge you have in the first place. Trying to rely on logic and reason as to what should happen is exactly what the vast majority (read as “all”) of traders have done or continue to do each day. We know that the vast majority of traders lose money. The vast majority resort to logic & reason as a fallback attempt to figure out the markets. Do you see any correlation there?

Do yourself a favor. Turn off the financial news. Tune out the predictive newsletters and message boards. Tune into your charts. Believe what they say as they say it. Force out the thoughts of “too high” and “too low” that cost you too much money to harbor. Stand fast against destructive emotions that tempt you to pick tops and bottoms.

Hold yourself accountable to going with the market flow and flowing with the current of price action. Remain open minded, objective, patient and disciplined. Reward yourself with eventual monetary gain, something the vast majority of masses will never realize as they seek the wrong things down the wrong paths in this performance profession.

Trade To Win
AP

Monday & today

Nothing yesterday... just too much to do other than the market. Today looks like a very nice day to be practice-trading but it is unlikely I'll get a chance.
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Good trading to all!

November 11 - Yesterday

Here is the cover of my TNA overnight short from Wednesday to Thursday (yesterday morning). As written in yesterday's post, I paid no more attention to the market after that.

Notable is the amount of time it took my cover trade to clear in the early morning... 17 to 20 minutes. During that time, I had as much as 35% more gains than what was realized. Such are the machinations on a morning with unusual activity.

Also of note, market movers made sure to fill the gap left from the low open. A gap-fill trade in TNA would have yielded up to $2.50 in gains.

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No market for me today. I have day-job then I have promised to assist a friend with a "handyman" project.

Veterans' Day

My personal thanks to all veterans of the United States Armed Services, past and present, especially those who have paid the ultimate sacrifice.

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You are not forgotten.

November 10 - Yesterday's post

Here's what I was up to yesterday with regard to the market. I don't know what to say except a sea of winners, sitting on a multi-trade short position in TNA, and couldn't be more disappointed with my performance.

I'll cover my short at my first chance then take the rest of the day off from the markets to think about where I'm headed as a trader (in training). Stopping to reflect is an important part of advancement, or lack thereof.

November 9th

I had some time before noon to paper-trade. I was drawn in by CMG with its big daily volatility. This is a bear to try to trade, with spreads sometimes as large as 45 cents. I mostly worked with one-half positions (500 shares) for that reason. I suppose I'm learning something from working with this stock, but it was not my ideal situation, that's for sure. I like more liquidity and a smaller spread. Despite the allure of big money-moves, I'm eliminating this one from my watch list. I'd rather trade the smaller moves in TNA, etc.

November 8th

I spent most of the day in front of the computer instead of doing my flooring project. I did get my pipe fixed however.

This was a very frustrating day practice-trading the market.

I simply go about this the wrong way. I've been through all the reasons before.

I had 12 trades today, all for winners, though the last one was a $4 gain; basically a scratch trade. No losing trades & no stop outs. Only two were clean trades and one of those was the scratch trade.
Being adept at scaling in and scaling out is not the success I seek.

A lot of work remains to be done.

November 5 - EOD shorts in TNA

I didn't get to put up these paper-trades short in TNA from last Friday at the close. I was fading the move up and thought it would break down in the last minutes of the session. It didn't so I held the two-part short over the week-end. I was rewarded for my overly-risky move by getting a chance to scale out for a gain at the open this morning.

As I write this, about 8 minutes after exiting, the market and TNA are really dropping nicely and price is currently about 50 cents lower than where I go out. My trade idea was a good one but I left a lot on the table, as is often the case.

Day job is not very busy this week thus far so I expect to be able to finish my hardwood flooring installation project as well as do some practice-trading. Emergency service is a component of my day-job, so my time could fill and send this plan up in flames.

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Here in the northeastern US, it was raining like crazy yesterday. At my house, it was raining outside and inside, after I pierced a radiant-floor heating pipe between the first and second floor! Beating the long odds of hitting the pipe with a hardwood floor nail in just the right spot was quite astounding but that is how it works sometimes... in construction and in trading. I quickly shut off the heat zone, cut the power to the lights in this area of my kitchen, cut a hole in the ceiling and found the leak within 20 minutes. Minimal damage overall: the heat pipe I can fix literally in two minutes with a PEX coupler, the three by five foot hole in my drywall ceiling will be more involved. As will be the painting of the entire open-concept ceiling area for the sake of a 15 square foot spot! I wonder how using "stops" might apply to this situation? Maybe stops would not apply... this ceiling incident was more like a "flash-crash?!"

November 4 (yesterday) & November 5th (today)

No practice trades yesterday and it is very unlikely that there will be any today. Too much day-job going on.

November 3 - FOMC scalp

I was busy yesterday with things other than the market but I made a point to be logged in to see the market when the FOMC reported. Here are the three practice-trades I made. I was logged into my platform about 15 minutes and was in the trades just under three minutes. Then I went back to my work project.

November 2nd - ...And to finish

And this paper-trade short to capture a slight pullback in the afternoon while taking a break from my project.

November 2nd - Just a little later...

Ok, I stuck around a bit longer after seeing this triangle develop in TNA. Considering this set-up and the propensity for stocks to fill gaps, I took a short at just the right time. I absolutely love when price moves favorably away from my entry! Now I am done for most of the day... the floor will not install itself, after all.

November 2nd

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ELECTION DAY- The peaceful transition of governmental power is one of the greatest gifts our Nation's founders gave to us. Treasure it and use it.

Here is the chart of the scalp in TNA at the open. I don't have time to sit here at the computer very long today so I am posting this then going to my floor project. I used Scott Farnham's entry in TNA from yesterday as a guide for my resistence line on this short entry. He is so tuned in to the market turns that I have noticed his exits and entries provide nice clues to future changes of direction. Note that his initial short in TNA yesterday was two cents from the opening candle high today and his double-up on yesterdays TNA entry was within two cents of the close of today's opening candle. He is sharp as a tack, and I have noticed these correlations for a long time. WTG Scott.

-

Will the markets and TNA close today's opening gap? Odds favor it... though nothing is certain. It's a roughly $2.00 per share gain in TNA if it does.

Late morning...

...looks like CMG did close the gap! My decision to exit was a good one. Shorting for a gap-close on CMG would have been a nice trade, in hindsight.

-

AFTER-HOURS UPDATE: No further trades on this day.

October 29 & November 1st (thus far)

I didn't have a chance to get Friday's two paper-trades up on the blog, so here they are. It was busy and things have been upside-down after a recent death in the family. I still do some practice trading but my energy for it and other parts of life has waned some over the past three weeks or so. I am off from work today but won't be able to sit at the computer and trade all day. I am actually continuing the installation of 1400 sq ft of hardwood floor on our home's second story. I have a rented nail gun and am trying to get it done within the 7-day window on the contract. I am welcome to keep it beyond that timeframe but I really want it done by then to meet a personal goal.

So, family concerns, working the day-job, home construction, and a notable lack of sleep are all intruding on my practice-trading focus. I am hoping that time will mellow things out a bit and that the Thanksgiving, Christmas and New Years holiday season won't heap too much more on my plate. ( eye-roll )

-

On Friday, I took the 1/2 position long in CMG at what I thought would be a breakout area. It didn't... it drifted lower all day. I actually had a chance to get out even around 11:15 am but thought I'd stick to my "long" trade idea. Bad choice, as it turns out. The drift lower, as I mentioned above, continued rest of day.

The SWC paper-trade was a nice mistake. I accidentally clicked on it in my scanner window and activated a short-sale. As it turns out, it had been on a run-up for some time and was vulnerable to a profit-taking reversal. I added another 1000 shares short (it was a winning trade at that point) then covered for a small winner.

This morning, I saw CMG gapping up at the open. I sold the long from Friday, reversed immediately, and got another winner as the price dropped just after the switch from one 5-min candle to the next. I am done now for a while and am going to work on my floor project. I may look at the markets when I have lunch. I'm curious to see if CMG will close the gap from this morning and validate my early exit.

-

During the day Friday, I had considered adding to the losing CMG trade to average a better price but didn't. (Had I done so, I would have had a number of opportunities to get out with a gain) This is an area where my trading has not matured and I struggle with it. While often able to resist the urge to average for better price as shown by my restraint Friday, I am also unsuccessful at times. They are well-documented on this blog. I think the real struggle is with admitting I am wrong. I hate it... it represents failure and I have never accepted failure. My personality is to fight back with all means necessary in order to come out on top. My ego is my single largest roadblock to becoming a professional trader. I am not a greed-based personality, I am a fear-based personality. As ridiculous as it sounds, a losing trade represents failure to me; and I fear failure. I do not truly "accept the risk," as Mark Douglas would put it.

-

I also refuse to quit, and look forward to the day when I can consistently fight the weakness inside me. I am a real person in pursuit of a goal, and this is my journey.

VOTE

"The Constitution is not an instrument for the government to restrain the people, it is an instrument for the people to restrain the government -- lest it come to dominate our lives and interests." -- Patrick Henry


IF YOU CROSS THE NORTH KOREAN BORDER ILLEGALLY YOU GET
12 YEARS HARD LABOR

IF YOU CROSS THE IRANIAN BORDER ILLEGALLY YOU ARE
DETAINED INDEFINITELY.

IF YOU CROSS THE AFGHAN BORDER ILLEGALLY, YOU GET SHOT.

IF YOU CROSS THE SAUDI ARABIAN BORDER ILLEGALLY YOU
WILL BE JAILED.

IF YOU CROSS THE CHINESE BORDER ILLEGALLY YOU MAY
NEVER BE HEARD FROM AGAIN.

IF YOU CROSS THE VENEZUELAN BORDER ILLEGALLY YOU WILL BE
BRANDED A SPY AND YOUR FATE WILL BE SEALED.

IF YOU CROSS THE CUBAN BORDER ILLEGALLY YOU WILL BE
THROWN INTO POLITICAL PRISON TO ROT.

IF YOU CROSS THE MEXICAN BORDER ILLEGALLY YOU WILL BE ARRESTED, SHAKEN DOWN, AND UNCEREMONIOUSOY THROWN OUT.

BUT,IF YOU CROSS THE U.S. BORDER ILLEGALLY YOU GET :

1 - A JOB,
2 - A DRIVERS LICENSE,
3 - SOCIAL SECURITY CARD,
4 - WELFARE,
5 - FOOD STAMPS,
6 - CREDIT CARDS,
7 - SUBSIDIZED RENT OR A LOAN TO BUY A HOUSE,
8 - FREE EDUCATION,
9 - FREE HEALTH CARE,
10 - A LOBBYIST IN WASHINGTON
11 - BILLIONS OF DOLLARS WORTH OF PUBLIC DOCUMENTS PRINTED
IN YOUR LANGUAGE AND THE RIGHT TO CARRY YOUR COUNTRY'S FLAG WHILE YOU PROTEST THAT YOU DON'T GET ENOUGH RESPECT

I JUST WANTED TO MAKE SURE I HAD A FIRM GRASP
OF THE SITUATION BEFORE I VOTE ON TUESDAY...

October 28

I had limited time to sit in with the mkts today.

However, I took a two position practice-trade in MCP long near the final consolidation phase of the day; also near the lod. My thought was that it felt like the reversal of the big drop was waiting, mainly because there was so little profit-taking all day, relatively speaking. Unrealized Gains of this magnitude today by the shorts would have to be booked, if the trader had any good sense at all.

And that is where the reversal trader pounces.

October 27th

Here is the buy-to-cover of my CMG practice swing-trade from last week. More drop coming? Yeah, I think so. Am I greedy enough to hold a stock that has some gains sitting there? No.
It appears that I picked a good time to cover, in the short-term. While I write this commentary, price is continuing to rise after my exit. It now sits very close to what was my average share price.

-
It's more about being correct in my read of the stock price; reinforcement of the notion that what goes up, must come down (at least to some degree).

-

*** UPDATE: It's end of day and it looks like I got the bottom candle of the day on my exit and the full breakdown didn't occur. Perhaps over the next week or two? I'm out and moving on to other stocks, but this one bears watching...

October 22

I was able to watch the markets for a bit yesterday, though very distracted while doing so. I took a paper-trade short in TNA and was able to take a winner out of it, though I gave up some gains by missing the bottom and covering during the start of the retracement of the move I was playing. I consider this approach a positive one... I normally would just cover and run much earlier than I did but I consciously decided to hold. I actually started to feel the momentum shift into a reversal and exited. Much is to be learned by staying in my practice-trades during the reversals of trend instead of anticipating the reversal and getting out prior to it. Patience derived from confidence that my momentum reads are accurate is just one more step on my journey. Let's see if this develops into habit.

-

I found CMG through a reading of Scott F.'s post and decided to take a 250 share (25% of my standard trade of 1000 shares) swing-trade short to capture the profit-taking move that at some point will accompany the monster run-up. Recent price surges on substantial volume (April 22, June 3, and July 23 were followed by price retracements. The most recent surge on September 1 did not, however, so maybe the longs are getting cocky!?) Let's see what happens going forward. I am willing to wait for this one to crack and fall. With one-quarter of my traditional investment, I will consider averaging for a better price in 250 share (25 %) increments if it moves substantially against me. I will add more aggressively to the short when it goes into the black, if I haven't yet accumulated 1000 shares (one full position) when the breakdown takes place.

October 19th

I was back at the office briefly to swap service vehicles for the day-job, so I stayed a couple minutes to sign into the markets before heading back out.

I paper-traded some retracements during a big down move. Nothing much to elaborate on, I simply tried to feel changes in momentum for scalping.

Yesterday and today

No practice-trading yesterday... I got to the computer with 9 minutes left in the session.
Unlikely I'll be able to do anything today, either, given my work schedule.

October 15th

I was tuned into the markets afer 1:45 pm and had a couple hours to watch TNA. I took a paper-trade long at what turned out to be a good spot. I definitely exited far too soon. On the second and final practice-trade of the day, I was a bit early on the reversal from down to up and had to sit through some consolidation chop. I sold when the bid hit 53.09 and just as I hit the mouse button, the price plunged as if it had been shot. So, I got a bad fill and managed just a 6-7 cent winner. No matter... I liked the action today and was reasonably satisfied with my performance, though I'd have to only give myself a B- for a grade. Getting caught up in that consolidation zone on the second trade was a sign of impatience. If I'm using 5-min candles to read the market, I have to wait for 5-min candles to emerge and allow patterns to develop more before acting. The odds are better that way.

October 13th

I arrived at the computer around 3:15 pm and caught some nice EOD action in the market. TNA was making some nice runs so I took one paper-trade short, covering in the same candle for a gain. I really love it when price moves smoothly away from entry in my favor... that is a great feeling. I look forward to the day when I've done it so much that it becomes "no big deal." The fact that I get excited by it tells me that there is still too much emotion in my trading.

-

I watched to learn for the rest of the day.

October 12th

TNA all the way today... I was able to watch the market for much of the afternoon, though I only took three practice-trades, looking for retracements in a bullish day. I missed a great short for the last 10 mins of the day... the signs were there for a EOD move down.

October 11th

After dumping my CRM from last week, I did two winning paper-trades in MON before having to attend to a family emergency. The orange line at 1:15pm is where I felt the big drop in MON was going to happen, just as I was signing off to go to the hospital. As it turns out, my timing was early (wrong) but my strong feeling that a drop was going to take place did come to pass less than an hour later. I was pegging the drop to reach the Magenta line which would have been a full closing of the morning gap up. It stopped its plunge about 23 cents short of that point.

Maybe tomorrow?

Sitting on a bad trade...

I had this practice-trade work against me at the end of last week and sat on it, waiting for it to break in my favor. Today was the day, and I closed it out. I had a number of chances to add more to it to average a better price and doing so would have given me many opportunities to get out sooner with a gain. But, I didn't add... and so I waited. this was a lousy entry, and lousy execution. No stop on a fast mover that I shouldn't have been involved in to begin with.

Anyway, live and hopefully learn.

Weekend Thought.

HEAVEN AND HELL

While walking down the street one day a Corrupt Senator was tragically
hit by a car and died.

His soul arrives in heaven and is met by St. Peter at the entrance.

"Welcome to heaven," says St. Peter. "Before you settle in, it seems there
is a problem. We seldom see a high official around these parts, you see,
so we're not sure what to do with you."

"No problem, just let me in," says the Senator..

"Well, I'd like to, but I have orders from the higher ups. What we'll do
is have you spend one day in hell and one in heaven. Then you can choose
where to spend eternity."

"Really?, I've made up my mind. I want to be in heaven," says the Senator.

"I'm sorry, but we have our rules."

And with that, St. Peter escorts him to the elevator and he goes down,
down, down to hell.

The doors open and he finds himself in the middle of a green golf course.
In the distance is a clubhouse and standing in front of it are all his
friends and other politicians who had worked with him.

Everyone is very happy and in evening dress. They run to greet him, shake
his hand, and reminisce about the good times they had while getting rich
at the expense of the people.
They play a friendly game of golf and then dine on lobster, caviar and
the finest champagne.

Also present is the devil, who really is a very friendly guy who is
having a good time dancing and telling jokes.

They are all having such a good time that before the Senator realizes it,
it is time to go.

Everyone gives him a hearty farewell and waves while the elevator
rises...

The elevator goes up, up, up and the door reopens in heaven where St.
Peter is waiting for him, "Now it's time to visit heaven.."

So, 24 hours passed with the Senator joining a group of contented souls
moving from cloud to cloud, playing the harp and singing. They have a good
time and, before he realizes it, the 24 hours have gone by and St. Peter
returns.

"Well, then, you've spent a day in hell and another in heaven. Now choose
your eternity."

The Senator reflects for a minute, then he answers: "Well, I would never
have said it before, I mean heaven has been delightful, but I think I
would be better off in hell."

So St. Peter escorts him to the elevator and he goes down, down, down to
hell..

Now the doors of the elevator open and he's in the middle of a barren land
covered with waste and garbage. He sees all his friends, dressed in rags,
picking up the trash and putting it in black bags as more trash falls
from above.

The devil comes over to him and puts his arm around his shoulders.

"I don't understand," stammers the Senator. "Yesterday I was here and
there was a golf course and clubhouse, and we ate lobster and caviar,
drank champagne, and danced and had a great time. Now there's just a
wasteland full of garbage and my friends look miserable. What happened?"

The devil smiles at him and says,
"Yesterday we were campaigning, Today, you voted.."

October 5th - Tuesday

As it turns out, I wasn't able to sign on to the computer until after 3:30 pm so my time with the markets was limited. TNA is the chart which comes up when I log into QuoteTracker so I usually just focus on that. The markets had a nice trend day so I was looking to capitalize on a drop at the EOD. In the last 5 minutes of the trading session, I felt a small breakdown was in the making so I took a paper-trade short with about 4 minutes remaining. Price dropped away from my entry spot nicely but wasn't moving fast enough for my liking, with only three minutes or so before the close. Bid/Ask was really "squirrely" and I didn't get the best fill price when I covered, yielding only $40 paper-bucks. With two and a half minutes left, I watched the chart to see if my "gut" feeling was correct about a break in price. I was happy to see that my reading of the price action was a good one when price dropped continuously into the close.

A one-minute chart shows that buying increased as price dropped during the 3:58 and 3:59 timeframes, indicated by candles with open/close price in the top half of each candle and long lower wicks. The last minute of the day was different though... sellers ate up the buyers and price dropped with more conviction into the closing bell.

-

Recently, I have been trying to think of price movement in terms of what buyers and sellers are doing and thinking rather than as just spots on a chart or candle. I don't know if I am correct in my analysis as I'm doing it but I believe it is going to be helpful in the long run. Don Miller does this, thinking about "who is stuck" at certain price levels in the day. If a stock chart is just a picture of human behavior expressed as prices in a stock, then I think this approach will pay dividends down the road.

October 4th - Monday

I didn't get to put this chart and paper-trade record on the blog last night after market close. Between day-job appointments, I had about 20 minutes at the office around lunch time to look at the markets. I found TNA near the bottom of a long move down and decided to take a long trade where I thought appropriate. I held through a slight drop in the following candle, saw some movement in a positive direction in the next candle, then a pop up. Shortly after the trade went positive for me, I added to it. A slowing of momo in conjunction with having to be at my next day-job appointment at noon suggested that I should exit. I scaled out for two winners.

Because of day-job, I might not get to practice-trade today. I'll see how the schedule breaks down as the day goes on.

October 1st

Today was a real treat for me as I had a chance to watch the markets from 10:00 am until the close. This used to happen a lot in 2009 but not so much anymore. I loved it... At times I just made marks on the charts where I thought things would move along with thoughts about where the market might go.

I paper-traded with TNA looking to take advantage of consolidation breaks as well as paying special attention to S/R levels. Also, used the high likelihood of markets to close gaps in my early evaluation of the markets; something I've paid closer attention to since discovering http://www.coiledmarkets.com/ .

Also, I have found that Adam's blog at SMB Trading ( http://www.smbtraining.com/ ) has been very helpful in understanding technical analysis as it is put in practice. More specifically, this post was interesting and I saved it to my favorites list:

http://www.smbtraining.com/blog/one-of-my-favorite-plays

And of course, no day is complete without reviewing Scott Farnham's many posts at http://bankrobbertrades.blogspot.com/ .

On days like today, it feels to me like the shades are parting and the light is beginning to shine in. I have faith that it will continue, with the proper effort and attention. When, I don't know? But it will. Without faith, we have nothing.

September 29

I am swimming in administrative work for the day-job then have to prep for a celebration dinner for a friend so I don't have time to comment on todays paper-trading.

Suffice to say that all three were clean trades (no averaged/blended prices).

More comment later if I have time.

September 27

With two hours left in the session, I looked for paper trading opportunities in TNA. I was early on my read of a breakdown of the markets near the highs of the day but held through the consolidation and rollover. Closed it out at a support area corresponding to the doji at 10:55 am. I stayed out of the consolidation chop for the next half hour, but missed the short opportunity as price broke that same important support/resist. area where I covered my earlier short. I did catch a little winner on the profit-taking pullback of the major move down.

Toward eod, I went long near where I thought price had stalled. It did dip some but instincts were correct and price performed a mean reversion in the last minutes of the day, yielding a winner (though out too soon).

September 23 & 24

The reason for today's result from the overnight held, swing paper-trade? See this morning's post. Nothing more to be said.

Saw it, liked it, reprinted it here...

From www.coiledmarkets.com , August 31 2010 post:

"Ever have that thought flash thru your mind inside of a plodding, deliberate trend session? Up or down, doesn’t matter. Have you ever let the thought of price is “too high” or “too low” for taking a new position there hold you back, only to see price continue much deeper in that same direction after giving you all kinds of time to open a new trade?

A funny thing happens when we watch that process unfold the the hard right edge of our charts. Once price shoots away from where we passed on entering, a new compulsion overwhelms our senses. The market is now irrational and extreme. The sensible thing to do here is fade the move… short each new upthrust high, buy each plunge-down low. Sooner or later the “herd” will figure out they are wrong and you are right. These prices are insane here. Then the market will turn back in your favor, reward you for being so sensible with your “discount” purchases and reward you again for not taking that other stupid trade which worked a little bit but must surely stop working nearby, soon.

For those who have experienced that emotional pattern, how did the story turn out? Were you victorious more often than not, or run over by the StraightTrend Express more often than not?

I tell ya, it’s a deep-seated emotional flaw that prevents traders from mindlessly buying and selling into extended trend moves when continuation signals confirm. One of the hardest personal flaws to overcome in this profession, by far.

Also one of the deep core reasons why reversal-trade or “fade-trade” tactics appeal to newbie traders before they get chewed to shreds by the market in rapid fashion. It feels really good to time a high or low entry when trading. It feels five times good to make a public call somewhere and be right, then bask in the accolades of fellow newbies who don’t know one whit better about reality themselves.

Then begins the constant (but relatively brief) quest to be right again and again about picking tops and bottoms, highs and lows in a market."

I'm trying to figure out (still) why the red highlighted section is a perfect description of me. Until I figure that out, I won't trade real money and can't achieve my goal of trading the markets for a living. We all have our "anchor," that weight that holds us back while trying to learn this art... the red highlighted area is mine. Are you self-aware enough to know your anchor? I think it's the first step to fixing it... we'll see!

September 22

Just a short time to watch TNA because I am involved in some admin. work for the day-job that can't be ignored. Went long at a point which I thought would continue but didn't. Held it, then bought the bottom of the move for a blended price...and sold both around the first significant resistence level. Looks like it is still going up as I type this, though it did pullback just after I exited. Looks like I wasn't the only one who wanted to get out at the first chance.

Thought for the Day

"If you don't like something, change it. If you can't change it, change the way you think about it." - Mary Engelbreit

Gus