March 30th

Gains on the day but a major loser in reality. This trade was only saved because I averaged a better price on the original trade which should have been sold with the gain I had -OR- stopped out when I felt momentum reverse on me at 1:40-1:45 pm. And, I did feel the momo change and I stared at it dumbly. My technical skills have vastly improved over the past year but I am still struggling with the same mental blocks. This is why I haven't gone back to trading with real money. I often feel so close to my goal. My instincts are good enough now to make money trading. I do believe this to be true. But, I cannot take the risks with my trading account to do what I did today.

It seems crazy that I should be disappointed with a $500 gain, but I surely am. I am optimistic that this will be solved. My future and others around me depend on it.

March 29th

I had a couple hours to watch & paper-trade. I took one trade short at 3:10 pm and I thought it would be the "final breakdown" of Dreamworks before EOD. I was a couple candles early and when momentum stalled, I exited. I was doing something else when it finally did crack about 10 minutes later at 3:30pm. The 3:25 - 3:30 pm green candle which ended at the high of the 5-min range on weak volume was a good sign of reversal.

March 26th

Not much to say about this. I'll just post the chart and head out to dinner with the lovely Mrs. Bluecollar.

March 24th

Its been a few trading days since I last posted so I'm putting up today's results. Lately, I have been taking what time I have available for trading to study more than trade. That is, I have been doing intensive investigation into S/R as it relates to changes of direction in price. We'll see if it yields any results. The jury is still out. I continue to press forward, even when the outcome is uncertain. With 20 years to go before retirement, I feel like time is on my side.

March 17th & 18th

This is a continuation of yesterday, and I didn't have a chance to update last night. I originally posted my one trade in FAZ from the morning. After my second day-job appointment yesterday, I was in the office for about 20 minutes and looked in on how the market was doing. I perceived a trade opportunity in FAZ and without thinking about the clock, I took it. A paper-trade long was what I saw as the most likely chance at a gain off the basing from 1:30pm to 2:00pm. I was about 10-15 minutes early on the move, but my gut feeling proved correct. Of course, by the time it broke to the upside, I was already driving to see my customer. My appointment was for 2:30pm and was 20 minutes away from my office. Needless to say, this trade made me late for my appointment. I returned after my project and noticed that by 3:20pm, my trade was up about $700 paper-bucks, before it shrunk EOD. I just closed it today for a $410 paper-gain.

I have no day-job appointments until 2:00 pm today but I am not going to be able to sit with the markets considering the mountain of work that I face, mostly on my construction project, which is two weeks behind schedule.

March 17th

My Irish Eyes Are Smilin' because I had a chance to get in a paper-trade short on TNA before the start of a very busy day-job schedule.

Erin Go Bragh!!!!!

March 16th

Again, I got to the markets later than I wanted. But, day job has been busy of late. Two winners and on loser when FAS didn't break down at the close like I thought it might.

My second trade, the first today in FAS, was a good entry and a good read of the price action. I bailed out far too soon again, though. I missed a bulk of the move.

Still, it is only paper-money and practice trading, and I am happy with the intuition I am developing. I've stopped pressing so hard to learn it... it will come in its own time. The market will tell me when I am ready, I just have to keep on with my studies.

March 25th

I had but 20 minutes at EOD to look in on the markets. Here's what happened:

Ok, it's not that dramatic. Paper gains of $100. Played the reversal of that sweet move down in FAZ. Wow...that was a great down-draft. Too much day-job to be involved earlier than I was.

March 12th

I had 30 or 40 minutes to look at the markets today. I took two trades in Mosaic. I was in too early on the first and held on to see what would happen. It was then that I finally saw the turn coming in the move I was fading, so I played the turn with a second entry, lowering my average price. Yes, I gave in to my impulses again. It is difficult to avoid it when I can sense the reversal is upon me.

I got out with a small gain on the two trades... what a shame because the move just kept going up! Once again, out too soon! I took 4 or 5 cents of a move that offered me up to 58 cents.

It was mostly that I had to get to work on my construction project. there simply doesn't seem to be enough time to do it all. I was installing the exhaust fans for the 2 bathrooms. What a pain in the behind... climbing up a 12/12 pitch roof to reach the soffit to get the cap on the vent. I am getting too old for this! The second fan was on the back of the house where there is a 5 pitch so that was much easier to deal with. After 3 hours of that, I moved on to putting in the baseboard heaters. Tomorrow, I'll start sweating copper joints and affixing PEX tubing. I won't tie in to my boiler until the end of the project. Then, it's potable water lines for a kitchen and two baths. Right now, I am trying to get to a point where I can get insulation in and drywall on. That's when the fun begins. Tiling, hard wood floors, paint, cabinets, doors and trim. I am not being facetious either. I actually do enjoy the finish carpentry.

I'll keep after it though, because my instincts are improving... I can feel it.

March 10th

Very limited time for practice-trading today. I am focused on making gains on my home construction project and not in my practice trading account! So, I took this long trade moments ago for a quick winner. As per usual, my exit was hasty. And, as I write this, I am watching LVS continue to climb on this move that I bought at 19.20, four cents from the bottom... right now it is at 19.40 resistence and threatening to push higher... I'll look at it EOD to see "what might have been."

Update: While waiting for this to post (it is now 10:20 am), I see that LVS couldn't push through reistence and dropped nicely at the 10:15 candle.

March 9th

I had an hour and a half or so to sit in on the markets. SWN was a big runner today so I tried to work with it a bit. Because of my late arrival, I had missed the big run-up, the pullback at 10:00 -10:35, and the secondary pop that ended at 11:35 or so. The stock was retreating from a double-top suggesting it would not push to new highs. So, I took a paper-short as it crossed below the 17 EMA and sat on it as the trade went negative briefly. It didn't cross into my stop loss area so I held and was rewarded with continued weakness. I covered it at a S/R area about $44.10. That proved to be premature as the stock continued to dump out after its morning run helped down by the markets rolling over in the early afternoon.

I took a long where I felt the bottom of the move had been reached and my instincts were correct but I sold the little pop when it ran out of steam. Too bad I didn't stick with it... it did rise soon afterward: I would have been down only 5 cents at the low of the trade and therefore wouldn't have stopped out. A potential 19 cent gain from my entry point... No guts, no glory!

That was my last trade. I watched POT for 10-15 mintues but I didn't stay with the markets because of other responsibilities.

March 8th

This was very unusual today... my IB simulated trading platform must have been acting up because each time I clicked for a transaction, IB would process the buy or sell a few shares at a time. So, what would normally be a 1000 share trade in CLNE became a 101 share trade over about twenty-five seconds of waiting. And what was intended to be a 1000 share trade in POT became a 65 share trade over about the same time frame. And it was the same when I liquidated the positions... In and out became a slow-motion affair with lots of slippage. I did manage a few paper-bucks gain and the trades would have been good ones had they executed properly.
I have included the POT chart here. The yellow line with a green checkmark is my "unafraid" trade in the direction of momo. (the line points to where the stock was trading when I signed)

It would have given up to 71 cents gain before reversing. And, to further evaluate the trade, I put the short white lines where I felt I would fade the trade as I have in the past. You'll note that I thought the best spots were short at $118.85, short at $119.12 and short at $119.33. It is clear why I am so often averaging a losing trade. I am early on the turn of direction very often. The third try was a beautiful entry spot, though.

I have also included the chart for RIMM, another one which was really moving when I signed in. I didn't bother playing it because the platform was not working properly. I did, however, track it. I also marked it with the green checkmark and yellow line pointing to the spot where I first started looking at it; the spot where I could have jumped into the notable momentum. As of right now, the stock is up $1.40 from that point. Would I have kept it this long? Very unlikely, considering my track record! Ideal exits would have been the failure to punch through the double-top at 1:00pm or the first close below the 17 EMA at 2:25pm.
The point of all this is to reveal the importance of following trend and not trading counter-trend.

March 5th, Friday

One quick trade on FAZ. I had little time to look at the markets with Day-Job as busy as it was; maybe 20 minutes to watch the charts between appointments.

This was all I could come up with, catching the upper end of the bounce off the nice move down in FAZ from 2:30 to 3:05pm. I could sense that the momentum had stalled and I got out. My hunch proved right as I sold the highest bid of the move.

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Out of my frustration from yesterday, I have decided to focus more on going with momo instead of trying to fade so often. Fading is my natural reaction to a big move...ever since I started trying to trade; it is like a nervous tick...Ha! In a large percentage of these cases with reversal plays, I am either too early or just at the turn. I am often putting myself in situations of temptation to add to losers by fading early and having the trades promptly go negative. Ideally, I'd like to wait for a higher likelihood of the turn to occur and thereby remove most of the situations where averaging for better price present themselves. And most importantly, I will be in a position to profit from the continued momo by trading with it instead of against it!

In trading with the momentum, I may enter at or very close to the end of trend. This still puts me in a position where I must accept the risk and exit my bad trade with a stop. But, it will at least be a loss taken in pursuit of the most gain... trading in the direction of momo and not incorrectly fading it.
I am exploring the idea of preset stops just to get in the habit of selling off a loser. ...take the choice out of my hands and make it a contingency of the trade. Part of my hesitancy to sell and take a stop loss is that I have not learned to trust that I can make up that loss with my winning trades. Successful traders understand that good winning trades will offset the less frequent stop-losses.

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After taking a closer look at Thursdays trading, I noticed that in some of the areas where Scott Farnham was playing a turn in TIVO, I was also sensing a change of direction and fading the monster move up. For that reason, I think I am beginning to feel the market. This "feeling" now must be followed by appropriate action. If my read of the direction change is not correct, I must sell it and learn to go the other way, as Scott did. I remember reading one of Scott's posts from 2008 (?) where he wrote in reference to the behavior of other traders (paraphrased), "... why they don't sell and go the other way, I'll never understand." There is clarity and simplicity in that. It says that the action of selling and reversing the trade is really as simple as clicking the mouse, assuming one has the right mindset. That is where I want to be someday. For this and many other reasons, I continue to follow and recommend others to http://fearandgreedtrader.blogspot.com/ as the primary resource for learning how to trade high-ADR, momentum stocks. Without that site and his work, this journey of mine would have no road map. It is a resource and a benchmark without peer, in my opinion.

March 4th

Well, here it is for all to see. Part of having a blog which is open and forthright is that my weaknesses and my errors are exposed to everyone. In that regard, I present to you my paper-trades for the day in RMBS and TIVO. I will preface by saying that I went 10 for 10 winners with a gain of just over $3,000. And I'm angry at myself for it. Why? The final eight of the ten winners were achieved by averaging up a better price by adding to the original losing trade. This dysfunction really seems to be pathological for me. I don't remember how far down I was at the high price but it was more than double, maybe thrice my eventual gains. Such is the power of the mind to avoid pain; avoid admittting I was wrong and of not truly accepting the risk.

For months and months I've been aware that this method of trading is the road to ruination because if this had been real money, I would not have been able to take being that far in the hole in a trade before the eventual turn. And, I KNEW the turn was coming, as sure as I know my own name. That is the kicker, knowing that you will be right eventually keeps you holding on. If you have been following this blog for a while, you have noticed that I make very, very few losing trades. That is a clue that I am doing this all wrong. The best traders take losses every day, because it is impossible to trade in this style and be right every time. It is unnatural to always win. If you do, you are either taking very little risk, or in my case, far too much risk. Either way, the outlook for success is bleak with this approach.

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This blog has never and may never be about trading education. While I certainly have progressed and do share some of the things I've learned, I am for the most part inexperienced at this. What this blog has been about from its inception is the journey of a regular guy living a regular North American life, doing blue-collar work, who aspires to trade stocks for a living; to transform himself at middle age without formal trading education and without paying much money in pursuit of the goal. And, to show that it can be done by anyone with the right attitude and the committment.

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So, that is why I do this. Lest anyone think this is a concession speech, I offer that I am more fiercely determined than ever to be a professional trader. I write this post as a way to express my frustration with my inability to change and make it clear that if you too want to be a successful trader, learn from my mistakes. Trade the way it should be done and don't try to cheat the devil. The devil will always win eventually...

March 3rd

I felt great about this paper-trade short, but didn't have the time to see it through. I jumped out of the trade with a small gain, drove like crazy, and was still about 5 minutes late for my day-job visit with a customer.

A short time ago I had a chance to sign in to see how FCX finished for the day. Looks like I had a great entry on a 40 minute drop of 87 cents.