Documenting the Journey From Bluecollar Guy Doing a Bluecollar Job to Trading the Markets for a Living
Saturday, March 31, 2012
For those who wish to comment on this blog...
If anyone wants to offer comment on anything I put on the blog, it will be welcomed if it is not overtly negative. Further, I do not post any comments that advertise or promote other websites or pages that I do not know, appreciate, or patronize. Occasionally, there is something I personally find value in and I will link to it and/or repost here with careful attention that the source is properly presented. I do not endorse stocks or products, nor will I ever put advertising on this blog. For the record, no one has ever asked me to promote a product, nor do I ever anticipate I will be approached to do it.
Friday, March 30, 2012
Done for the day
today
Thursday, March 29, 2012
End of Day (EOD)
Thursday
Wednesday, March 28, 2012
And, here's the close.
I can't begin to write how great I feel right now. I fully embraced failure and it led to success. I am shocked at how little stress I felt the whole day. There were times I wanted to exit with some good gains (see the short orange lines mentioned in prior posts), but other than that, I was quite calm as compared to my history of practice-trading. I intend to continue with this exercise of discipline. I know that there will be days of failure ahead and relapse, but I like the general direction this is traveling.
The second screen shot is of the IB TradeLog, summarizing the days activity.
Now I am going to the basement to exercise... some resistence training then fast-walking on the treadmill.
Can't wait anymore...
still in, but it looks weak...
3 rd trade of the day
few mintues later
Today, later...
I have another long trade on after what appeared to be a bottom for the day.
Today, so far
One, it is clear that my selected stop area was wrong. I've blogged about this before, but the big market forces (HFT's perhaps?) will drive price to an extreme point in a flash to trip stops and generate the liquidity (and lower price) for them to engage their positions. This was clearly what happened here. They know where unseasoned traders like me put stops and in this case sent price to that area, in literally a fraction of a second. If I had placed an official stop-loss order with my broker, I would have been "punked" out of my well-chosen trade idea by only a few pennies beyond my stop line before reversing. So much of this activity is about "Trading the Trader," to use Quint Tatro's book title and premise. Black boxes and seasoned big players will trade, in part, based on the other players in the market and not only what they believe is a good trade idea. There's nothing wrong with that... if it were easy, everyone would do it and it wouldn't pay for shit. But, I have to pay attention to my stop price selection.
Secondly, I put the orange mark where my impulse would be to sell if I had not placed restrictions on my exit points. I felt great when I was still holding the trade when it rose another 40 cents! I must admit I wished then I could have sold to take an eighty point winner. To my recollection, it would have been my biggest gain ever on a practice trade that didn't involve the dubious practice of averaging a better price by doubling up a losing position. This was a clean trade and the best gain I ever remembered having. But, I remained resolute and stuck to the plan. While writing this post and roughly 20 mins. after taking the screen shot above, price has come back down, as it is want to do, and touched my stop line. I have clicked and exited. The one thing I did do earlier was move my stop line up closer to my entry after the trade was sufficiently in the black. I figured this is what I would normally do if real money were on the line. Correction, I would normally move my stop to breakeven then trail it to preserve a gain, but in this case it would violate my rules of the game. I willingly have taken a small loss.
I really have a good opinion of this exercise for now. I'll continue to look for good entries as I normally would and I'll stick to my training rules. One day at a time, one trade at a time. I may now take an hour to think quietly/meditate over this successful trade, eat lunch, then come back to the screen for the afternoon session.
Yesterday
Tuesday, March 27, 2012
For today...
I had a lousy day of execution yesterday. I ended with a $159 gain in sim-trading but that is not the point. I had some good entries but exited early because of failure anxiety, leaving much gain on the table. Then, I entered my last trade of the day and instead of hitting my stop when it went against me, I held the losing trade. Unacceptable.
As mentioned previously many times, I have a fear of loss. I don't like the way failure feels. What a strange irony this is, that losing small with stop-outs is the key to success. After all this time, I still have difficulty getting my head around this concept. Intellectually, it is clear to me but emotionally, I can't deal with it. Fear of failure has driven my life since I was a child. It's hard to reprogram over 45 years of life in a few months. But, I will try and then try again. The one thing I hate worse than failure is quitting.
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If it is failure I fear, then it is failure I will embrace. Mike Tyson said that "Everyone has a plan... 'til they get punched in the mouth." Well, this is where I see how much I can take while working my plan. Two ways to exit, stop outs and end of day. My goal is to put losses up on the board, even if there are obvious spots to exit for nice gains. This isn't about winning trades, it is about a search for and embrace of failure in hopes I can be familiar with and comfortable around it.
I will post the results end of day. Accountability might help my resolve.
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Update: 12:55pm. Ok, I had to exit one trade when Mrs. Bluecollar's niece arrived here at the house. She just arrived at noon after driving cross-country. I didn't want to leave the trade on while welcoming her. I'm back at the computer now ready to put up losing trades :-).
Saturday, March 24, 2012
Saw it, Liked it, Reposting it here...
Original post:
http://www.leighdrogen.com/keep-your-eyes-on-the-line-and-your-heart-in-the-flow/
His content:
Keep Your Eyes On The Line And Your Heart In The Flow
Posted by Leigh Drogenon January 13th, 2012
Building an innovative business under pressure is hard, it’s real hard, it’s the hardest thing I’ve ever done. We have many untested or undertested assumptions, and never enough time or resources.
But that’s life, and if I’ve learned anything over the past six months, it’s that no one else has a damn clue what they are doing either, except for Steve Jobs, he was the last one who did. Everyone else is making assumptions, testing them, and in between trying their hardest to get everyone else to believe in their assumptions and not call bullshit on the fact that they themselves don’t really have a clue either.
That’s why you should never be intimidated by anyone, underneath they are just as clueless as you, in different ways yes, but just as clueless.
Internalizing the fact that you really don’t have a damn clue can do one of two things. It can crush you, or set you free to make mistakes, fail, fail again, and then succeed. It’s all about how you handle that truth, do you embrace it, or ignore it.
Having a set of core beliefs is not something you can fake, and it’s not something you should ever be in doubt about. Doubt the details, build, measure, and learn, but don’t ever waiver on your core vision and beliefs.
Your core vision should be represented by a straight line that goes from the lower left to the upper right of a chart. The x axis representing time, and the y axis representing success. Keep your eyes focused straight ahead on that line at all times. The values on that line are represented by your goals along the way. Set tough goals, then go crush them.
But know that as an entrepreneur doing innovative things in a stressful environment, not many days are going to fall right on that line. Most days are going to feel like you’re either way above or way below, elation and depression, every week is a roller coaster. I’ve been through two whole cycles in just two weeks, where I’ve been high as a kite, and low as death valley.
One amazing thing that trading taught me is how to read my own emotions, and take my own pulse. When I had minimal exposure to the market and it was running away from me, I would eventually feel this really sick feeling in the pit of my stomach, the feeling of being left out, it’s a very powerful emotion. And just when I started to feel that fear, the market would pull back as it should and let me in. I knew how to read myself so well, and not get caught buying up for the sake of getting in. As a momentum trader, that was tough to learn.
I’m just starting to learn how to read myself when it comes to executing on this vision. Understanding how far above or below that line I really am, and when I’ve hit the top or bottom of those cycles. It’s the ebb and flow, and while you need to keep your eyes fixated on that line, you need your heart in the flow. You need to feel elated and crushed, all in the same week, and know that if you’re doing the right things you’ll always mean revert back to that line.
But in the end, it’s the farthest point in the very upper right hand corner of that graph that you need to keep your eye on, and to know all of the points on the line that get you there.
Thursday, March 15, 2012
Happy
In most of the losing trades, I had opportunities to scalp gains, one of them for 20 cents. But I am trying to hang in on my trades for bigger gains. Next to me on the wall is taped a sign that says, "Focus on Process, Not Results." I posted a photo of it on the blog not long ago. What doesn't show in the photo is what is written below it... "Exit only on Stop Outs, Volume spikes in winning trades, or at the Market Close." And that has been where I am trying to put my efforts. For now, I am trying to avoid using my intuition for exiting a stock. This has frequently been at my own peril, as it was today. Many times I had a feeling that I was on the wrong path... but I held firm and didn't exit. I'm focusing on process, not wins and losses. It's training to combat anxieties associated with Relief-Exiting and avoiding stop losses. And it's working to some degree... as the number of stop out losses mounted, I was silently coaching myself to relax, focus on process, stay in the moment; no worries about what came before and don't anticipate the future. Only think about my stop line, the one thing I can control. And it was working... In the 3 years I've been messing with the market, I've never taken more than 3 stops in a row before my resolve weakened. Before last week, I had only done two in a row before folding up and letting my stops lapse. I am getting stronger through my losses. I am always in danger of relapse, that's my personality. For now, I just get in the trade and say, "One Trade at a Time."
Where else do I need improvement based on today and virtually every other day I've done this? 11 of the 12 trades I attempted were counter-trend trades (reversal trades). This has been my bias since I began trying to learn this craft. The one trade I attempted in the direction of the overall upward trend of the day was a winner. On range days, I am in my comfort zone and my momentum reads are highly accurate. On trend days, I get slammed; punished by the uni-directional market. When reversal trades don't materialize for me, I cannot seem to surrender to the market, exit, and re-enter in the direction of the momentum. I am stubborn in my intent to be correct and it shows on days like today. It is just another way for my personality to not accept losing, just like my difficulties with taking stop losses.
I have a long way to go before I am ready to trade my live account again. But for today, I am happy with my discipline; the focus on process instead of results. Tomorrow is a new day. One trade at a time. One day at a time.
Wednesday, March 14, 2012
Missed it by THAT much...
Those of you who are from the USA and are around my age (47) or older remember the old 1960's TV show, "Get Smart." The oafish character Maxwell Smart would often say when he failed, "I missed it by THAT much!"
Well, I have been feeling like Max a lot over the past week or two. I have had my sim-trades stopped out by only a few pennies far too often recently. While it is encouraging that I am so close to the turn with my entryies, I am also frustrated by these repeated near-misses. The above chart of TNA is the most recent, from about 35 minutes ago.
It is clear from this that I am still not in the same mode of thinking as the professional traders who are capable of moving price with the size they trade. These pros know exactly where smaller operators put their stops and push price just beyond in order to generate liquidity by tripping stop-losses and enhancing profits as a result of their lower entry. My goal is to overcome this... not by widening my stop but by timing my entry later, after the turn has taken place. My greed associated with early picking of bottoms/tops in a stock will be exploited by savvy market veterans. If I can train myself to wait until the stock has run out of momo then begun its retracement, I will turn my good interpretations of direction change into gains.
UPDATE: After posting this, I noticed that the chart is not legible as it appears above. I haven't posted a chart in quite some time so maybe this is a format change by Blogger, not really sure. The chart is clear and easy to read if you click on it for the large version. As before when I once posted charts regularly, the slanted green line is my entry which tilts in the direction of the trade. In this case, UP to touch the candle at the entry price for a long. The slanted red line points to my exit spot and the short vertical line that connects them is colored green for a gain or red for a loss (as is the case here). The horizontal red line indicates my stop placement. I exited this trade at the dead bottom price on the chart, $60.27.
UPDATE 2: After the market closed, I went back to this post to correct the many typos and to note that the spot I chose to enter for the reversal was the eventual low of the day. Stopped out on the very lowest print of the day. Bummer!
So, this means that I entered short earlier in the session a few pennies from the top and entered long (unsuccessfully as noted above) at the lowest price of the day. In full disclosure, I was stopped out three times in a row at the top between 9:40 am and 10:00am before eventually being rewarded with a 60 cent winner on the fourth short attempt. I exited far, far too early on that trade. My short entry was eight cents down from, and just after the high of the day was printed. My practice trading needs a great deal of refinement, but I am hastened along toward my goal by reasonably good timing.
Saturday, March 10, 2012
An important thought...
Thursday, March 1, 2012
Moving some serious volume...
There were 410 trades of 22,295,253 shares equaling 9.141 billion shares of TNA. Dollar value of same is over $515 Billion! With 410 trades, it is difficult to quickly pin down the average share price... I used $57.80 after glancing at the entire transaction.
That is some SERIOUS weight... I wonder what that means for the market overall? Clearly a big player thinks we are at a turning point and is putting money where their mouth is. Remember that TNA is a 3x mover, so with that 300% multiplier effect coupled with half a trillion dollars... Need I write any more?