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.

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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.

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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 )

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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.

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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.

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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.