I thought this was wickedly funny...

Joe at http://www.upsidetrader.com/ often makes me laugh. This one was extra special, imo, especially the Steve Ballmer part. Apologies if you are not into schadenfreude.


http://www.upsidetrader.com/2011/04/29/5-possible-successors-at-berkshire-hathaway/#comments#disqus_thread

The past week

It has been a rocky week in my practice-trading. I have shelved my old ways for the most part and am trying to approach training in a different way, the correct way. Over that timeframe, I did revert once back to doubling up on a losing trade after not stopping it out, and paid a heavy price for it (metaphorically speaking); because I do not practice-trade with real money. But I only did it once.

I have put up a lot of losing trades over the past eight to ten days while I try to adopt a method/edge to what I have learned about the patterns of movement that stocks make every day. This is tough to take because I am putting up losers and am having to face the fact that I have to "un-learn" my bad habits, some which I have tried to perfect for two years. Just as a tennis player who wants to go pro must not "run around his backhand to hit a forehand" but must instead perfect the backhand stroke, I must ditch my old ways. I have some big losses where my method wasn't appropriate to the chart area and I just got frustrated and let the loss run; moving on to other things. Walking away from the problem will not solve anything. Mental toughness is going to be the last hurdle to clear for me, as it is for most people who try to trade professionally. As I clarify and hone my edge over the next few months, I believe it will be easier to systematically set and obey mental stops. In addition, I'll develop confidence on where to place hard stops in case I have to get up from the computer with a trade on. Of course, I could just set hard stops every time and solve my problem that way... but that doesn't teach me anything. The hard stop is a crutch in this case. I can't cheat the devil. I have to stare fear in the face and beat it in order to progress in a healthy way. I am tired of "running around my backhand" when it comes to trading. Screw that.

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I will continue to put up losing trades, some big losers as I struggle with setting stops in correct areas as well as attempting to teach myself to reverse direction after stopping out. This is crucial, because what I have found in all but one instance of taking a loss in the past ten days is that had I simply reversed direction, I would have had a big winner after the stop-out. It only makes sense, right? I'm playing stocks with high ADR; they move big. If it doesn't go the direction I choose, the likelihood is it will move big the other way.

Joshua: 5-min chart on left, 1-min on right.

April 18 - Tax Day, No market time for me.

Saw it, Liked it, Reposting here...

From Adam Grimes' blog at http://www.smbtraining.com/blog/book-update, I take this excerpt that really hit home for me. Something I always knew and am seeing with even more clarity since I started practice trading full-time in early March. - "...the biggest dangers traders face is that they are trading without actually having an edge in the market. If that is true, you’re screwed. Discipline, money management, good psychology, execution, etc. all will not help and in fact may hurt you. For instance, if you spend a lot of time doing positive thinking and working to become more aggressive on your entries, but your entries don’t actually have an edge, you’re just going to lose money faster. You cannot win this game without having an edge. I also spend quite a bit of time looking at and thinking about risk. For instance, one of my claims is that the “risk” in risk/reward is actually mislabeled… if you’re trading with an edge, it’s not even actually risk but a regular and somewhat predictable expense. (Again, if you’re not trading with an edge, you’re screwed.)"

April 14 & 15

Yesterday and today.

Today at the close I sold TNA daytrade cum position trade that I was getting killed in a few days ago. Escaped with a $261 loss on that papertrade. What goes down, will come back up eventually. With the market showing some strength yesterday and today, maybe it would have been positive next week... but I am not going to allow myself a winner on such a piece of crap execution. I didn't stop it out and so I'll take a red-mark on my record, as I deserve.

Yesterday, I made a tremendous breakthrough on my mental / emotional difficulties that I have been trying to overcome. I began to form an edge/method that I can use. In doing so, I also had a place to set a stop. What resulted from the boundaries set by my attempt at an edge was a sense of control and certainty. Et voila', I stopped out my first trade basically at breakeven when it appeared to be reversing against my "boundary." The nezt two trades that violated my method: first stopped out at B/E again and the second stopped for a $79 loss. The final trade was put on same as the other three prior, except this one was free of the consolidation area which had failed the ones before. It rose and instead of cutting and running with a small winner, I held on through five candles until it felt as though momentum had slowed and a reversal was forthcoming. In fact, my exit was nicely placed; there was a slight rise beyond my exit then a pullback. Now, here my inexperience showed. I should have entered long again. I missed the second and more profitable leg of the trend I had entered well earlier.

I am generally happy with my execution yesterday. Onward and upward.

April 7 - 13

I've been Blogger lazy lately. Here are my results from the past week. It should be noted that I am long 500 shares of TNA from a couple days ago in which I am down roughly $2000. Again, not having a stop killed me. To my credit, I have not averaged a better price by adding to losing trades in recent memory; an advancement for me in my mental battle to succeed in the markets. Now, I must come to grips with accepting risk when I put on a practice trade so that I can take stop losses in stride, as part of an overall trading plan.

I had two nice reads of ES today and was out far too early on both, especially when I caught the 2:15 candle near its low and sold early as it made a dramatic rise through 3:00 pm. I was in beautifully with a possible 7 point gain available to me; only took 1.5 points. I also had a couple lesser trades in ES: one in which I went long a bit too early and took much of the gain available to me on the 11:35 pullback. The other was a shabby reading of the day's major mid-day reversal where I exhibited zero patience for my idea to develop. It was the right idea but was simply too early, and too bold with me so confident of the reversal that I entered four contracts. It would have been superb had I waited another four to six minutes. If I had done so, I would have nailed the LOD. Close doesn't bring home the trophy, though.

April 6

Mostly TNA with one ES short near the top of the afternoon run-up. all trades were successful, though a couple out too soon. Maintained some discipline by not adding to the one losing trade that I held; a short around 2:15pm in TNA where I was too early and didn't stop out. TNA did roll over and I held for most of the drop before exit. It was a correct read of direction, wrong execution spot. I MUST learn patience to let the momo reverse before entry.

April 5

The rest of the day...

Some TNA and some ES. Was upside down in TNA after a lack of patience had me shorting it far, far too soon. I took it short off a volume spike combined with where I thought a trend line might hold as resistance. Not to be, as it turned out. Same old, same old, from there. I held it instead of stopping out. I DID NOT average better price by adding however, which exhibited unusual discipline for me. TNA, like the market, rolled over and came back. I took a loss by covering at a spot which felt like a reversal was developing. Price did reverse at that point but it was just a pull back from the general afternoon trend. Had I held, I would have had the chance to get out close to even. No worries, I deserved a loss after holding it like a fool. A quick scalp by reversing direction and going long where I exited was a chance for a small gainer to offset the loss.

On ES, I took two contracts short just a bit early but near the top for the day. Impetus was approach of the R1 pivot on a volume spike. It rolled over an hour later then at 2:00 pm I scaled out half as it started to feel like momo was waning a bit. See chart. I held the other half through that pullback then exited all on a volume surge down. This was far too early however because ES dropped through the close; it is weak still in afterhours. I missed an additional 3 points approx.

The past week.

Some good, some bad over the past week. Really hate the -$1500 rip last week. Same ridiculous move; didn't stop out and loss mounted. I will catch on eventually. Only practice trading until then.

I like yesterday afternoon's short of ES as it neared trendline resistance at the close. Then a hold overnight. Covered this AM near the bottom of the move for a gain.