A lot of distractions today but i still spent much of the day watching the action in TNA. Practice trading, I had a good trade idea for a short at $51.30 with a stop at $51.51 It would have yielded near $1.50 per share gain. Two other trade ideas would have stopped out; the last one a long at 51.40 at 3:15 pm stopping out by a cent at 3:25 pm before riding the last leg upward into the closing consolidation area. I evaluated it after the close and found that my stop idea was good but not well executed. I simply did not put the line where I intended it to go. But, stopped out is stopped out and can't be counted as a successful practice trade.
In between the two final practice trades was a live trade long, 500 shares TNA at $50.07 and 2:11pm. It didn't work out and I exited even; a Gain of $10.60
Price dropped another 27 cents before hitting one of the two primary reversal areas of the day. I was close to a successful trade but the timing was just a little early. And early is wrong, so I exited when I had the sense it was going to drop more than I wanted. And there's no better place than "out" when a trade idea does not work.
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Chart reading skills are pretty good but my three or four primary indicators are difficult to prioritize as price moves up and down through the day. They are reasonably reliable but often the one that seems to be best suited to the situation at hand is not the one that dictates the momentum. When I look at a chart at the end of the day, I often see obvious signs of direction change. While watching the live action, however, the familiar signal could be any one of four or more that work for me.
Tuesday, May 28, 2013
May 27 Memorial Day and markets closed
A blessing for all our bravest who have given their lives in the military service of these United States of America.
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A grateful nation bows to your sacrifice.
Thursday, May 23, 2013
May 23 ($551.29 loss)
12:27 Exited the final 1000 shares of TZA that I held from yesterday. Loss of $551.29 I am now out of the debacle trade from yesterday. What a rotten experience to put myself through. This type of event is what turned me away from live trading and toward practice trading nearly 4 years ago. Sad commentary that I am still performing the same way after so long. The mental hurdle is exceptionally hard for me to get over. It makes no rational sense to me. It is not intellectual or based in reason, it is purely psychological / emotional.
Shares of TZA are rising now after my exit, so at least in the short term, it was a good place to get out. At one point, just after the open, I was down $1,800 on this position.
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I am taking some time to replenish my mental capital. Mrs. Bluecollar, who has a more free-spirited personality sat with me this morning for 2.5 hours and actually was up $350 in practice trading while I had only two stop-outs. We were practice trading GMCR, a nice momentum stock. She knows very little about trading except for the chart and momentum readings I was feeding her. My charting knowledge combined with her free, easy, relaxed demeanor was a positive combination. her gains came on one stop out and two winners.
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With Memorial Day market holiday coming, I am considering taking a four day weekend away from trading. Probably just going to watch and practice trade the rest of today and tomorrow, unless there is something incredibly compelling that would warrant real money on the line.
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3:35 Saw a great scalping trade in GMCR but refrained. I need to take some time to think about this whole episode. Will sit with the market tomorrow, then look forward to a long weekend away from the computer. Lots of yard work and maybe go to see the new Star Trek movie. Mentally, I need to elevate my state of being... and to just lighten up. It is not my personality, but it is necessary to be more flexible in my thinking while at the computer.
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3:35 Saw a great scalping trade in GMCR but refrained. I need to take some time to think about this whole episode. Will sit with the market tomorrow, then look forward to a long weekend away from the computer. Lots of yard work and maybe go to see the new Star Trek movie. Mentally, I need to elevate my state of being... and to just lighten up. It is not my personality, but it is necessary to be more flexible in my thinking while at the computer.
Re-post of an early April, 2012 post:
-from April 3, 2012:
The basic concept of trading, in my opinion.
One thing that has become clear to me over the 13 months that I have been practicing this full time: The more obvious the price and direction to enter or exit, the more likely it will be used by the most traders. And any spot where the most traders act is the spot where the successful ten percent of traders will prey upon those other 90% (I use the 90% and 10% because that is the success fail rate that is quoted by a study done years ago). TNA in this screen shot is a perfect example of what I see every hour of every day.
You will see an orange mark on the long down candle at 2:00 when the market drooped after The Ben Bernank opened his mouth. You can verify that it was there on earlier charts. This was the spot where my "Impulse Buy" was. Where my emotions were telling me to jump in against trend. You'll also note that in the next candle, price retraced to that very spot beofre resuming its deep descent. That is no coincidence. That was price retesting the "sucker's level." Then you'll see where I clicked to buy my practice trade in the 2:10 candle. There's no doubt that there were many many real-money traders who acted on the same impulse at this level. I am not a professional trader and therefore, consider myself a novice. The price action in relation to this entry spot is an example of the point I am trying to express. It dropped enough to stop me out, plus a few pennies more. That is no coincidence, just as it is no coincidence when it has happened so often before (see my many references to it over the past couple weeks). I and many other novice traders who got in long at this pretty good price were punked and stopped out by the sharks who REALLY know what they are doing. They are not trading spots on a chart. They are "Trading the Trader," as Quint Tatro explained in his enlightening book of the same name. To continue, if you look at the sixth, seventh, and eighth candles (2:40, 2:45 2:50 respectively) after the one I entered, you will see stock price aligning with my entry price as a focal point of its consolidation, especially the 2:50 candle that makes a near doji within a penny or two. This is no coincidence. It is clear that the masses of real money traders and me, the novice practice-trader, got in at this level.
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All prices are a reflection of buying and selling, and buying and selling is a portrait of the intentional as well as emotion-driven impulses of the buyers and the sellers. And where the most people are compelled to act is where the other few people will exploit them...because human beings, like all the other animals that roam the earth, are creatures of habit and prone to be slaves to their basic emotions. Any habit can be gamed by the truly savvy and practiced few. They are the 10% who survive to become those who trade for a living.
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Successful trading means knowing human psychology and seeing how it is represented through the price action on the charts by studying a moving market, for months and years until your eyes bleed. This will lead to learning the patterns of the 10%,while trying to manage and master one's own natural emotions that compel one to act with the 90% majority. This art of trading is really gamesmanship.
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Therefore, it comes as no surprise that successful traders use psychologists, like Dr. Brett Steenbarger who left trading and blogging to work on staff at a major hedge fund. It is no surprise that successful traders learn to understand their own emotional makeup with tools such as yoga (Michael Martin, Steve Spencer, James Altucher), meditation (Michael Marcus, Scott Farnham aka Bankrobber), exercise (Mike Bellefiore), traditional religious faith and prayer (Quint Tatro, a Christian), hypnosis (Scott Farnham), writing trading thoughts and feelings on paper (Linda Bradford-Raschke). These people are but a few who used the various tools best known for focusing / centering the mind.
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Jack Schwager is the author of one of the best known books about succesful traders and the exploration of what made them so; "Market Wizards" and his follow-up, "The New Market Wizards." In that follow up book, he wrote this: "Time and time again, those whom I interviewed for this book and its predecessor stressed the absolutely critical role of psychological elements in trading success. When asked to explain what was important to success, the market wizards never talked about indicators or techniques, but rather about such things as discipline, emotional control, patience, and mental attitude toward losing. The message is clear: the key to winning in the markets is internal, not external."
Re-post of March 27, 2012, outlining my method of training to accept losses...
-from March 27, 2012:
For today...
For today, I am going to enter my practice trades as usual. But, I am only going to exit them under two circumstances. 1) Stop loss..... 2) Less than 15 minutes to market close. That's it.
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.
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.
Re-post portions of two March 2012 posts describing how comfortable it was to accept losses...
-from March 28, 2012:
"I picked the right time of the day to work with TNA considering my goal to put up losing trades in order to learn to accept losses."
"Oddly, I felt very much at ease when my goal was not to win, but rather to lose. I can't help but wonder if that feeling is because I may have designed an exercise that really didn't test my fear because there was no expectation of winning when I placed the trade. That's how wierd it felt to have a trade on and not feel anxious about the outcome. It bears repeating: I'm not sure if the test was helpful or not because I am not sure I cared enough about trying to win! I have to continue this exercise for a number of days to see if I have found a way to trade without emotional discomfort or if I have set up a test where lack of concern about the eventual goal of winning trades has been abandoned. All I know is that it was a joy to click the mouse , stop out for small losses and react to it with the same concern as putting on a belt or walking through the frozen foods section at the supermarket."
"I picked the right time of the day to work with TNA considering my goal to put up losing trades in order to learn to accept losses."
"Oddly, I felt very much at ease when my goal was not to win, but rather to lose. I can't help but wonder if that feeling is because I may have designed an exercise that really didn't test my fear because there was no expectation of winning when I placed the trade. That's how wierd it felt to have a trade on and not feel anxious about the outcome. It bears repeating: I'm not sure if the test was helpful or not because I am not sure I cared enough about trying to win! I have to continue this exercise for a number of days to see if I have found a way to trade without emotional discomfort or if I have set up a test where lack of concern about the eventual goal of winning trades has been abandoned. All I know is that it was a joy to click the mouse , stop out for small losses and react to it with the same concern as putting on a belt or walking through the frozen foods section at the supermarket."
"Takeaway:
I must continue with this expect-to-lose exercise until I can get my head around the odd (lack of) feelings it generated yesterday. I have to figure out if my lack of concern is a breakthrough as to how to mentally approach live trading or if the absence of anxiety is more about being emotionally removed from the trades I'm placing such that it is only about clicking a mouse and not placing and managing actual risk. I think time will yield the explanation."
-from March 29, 2012:
-from March 29, 2012:
"Looking at the bright side:
1. I stopped out each trade faithfully which is the whole point of this exercise I am involved in.
2. My stop outs were in areas where my read of trend/momentum change was pretty good. It needs refinement... maybe some patience. I also MUST trade with trend as my first impulse as opposed to trading for reversals. My first two stops of the day would have been avoided had I done this. This is a perenial problem of mine.
Overall, I am happy with today. I am not joyful like yesterday, but I met my goal of exiting only by hitting stops or getting out in the last 15 mins of the session."
Re-Post of the day last year I decided to "throw caution to the wind" and trade correctly...
- from March 15, 2012:
Happy
I had a losing day today in sim-trading. Down $-241 on twelve trades. Only had 4 winners. The reason I'm happy is that all 8 losing trades were stop-outs. I didn't let a single one exceed the stop. In fact, between 2:30 and 4:00 pm, I had six out of eight practice trades end with stop losses. I closed the day with 4 straight losses.
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.
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.
A re-post from Feb 1, 2012
Trading is mental
Having read and re-read Michael Martin's "The Inner Voice of Trading" over the past month, I am finding some relief when it comes to the self awareness necessary to be a successful trader.
I have taken to spending quiet time reflecting on the WHY that compels me to make bad trading decisions and where they truly originate. I reinstituted exercise into my day by walking about two to two and a half miles per day back in early November and moved to the treadmill in the cellar after the Maine winter arrived. With bad knees, I can no longer run, so I stick to walking and it gives me time to relax and think about the WHY. I've thrown in some strength training over the past two weeks and I feel better for it. Mostly, I am in this for mental dialysis and exercise second. Thirdly, my ability to stick to the regimen will reflect whether or not I have achieved the same discipline necessary to stick to proper trading fundamentals. Mrs. Bluecollar bought me two relaxation CD's that encorporate breathing exercises, muscle relaxation, positive affirmations, and calming music. I play them while I use the treadmill and am now in my second day of it. It is true that anxiety, stress, and fear are near the top of the list of reasons for trader failure.
As part of this whole thing, I am digging deep into my past and evaluating my life and the influence of those with whom I've encountered and the impressions that were left on me as a result.
I have also picked out some articles from Dr Andrew Menaker's blog at his website as part of my quest to become a trader: http://www.andrewmenaker.com/
I hope you get something from this one from March 29, 2011 entitled "Handling Uncertainty."
Handling Uncertainty
March 29th, 2011
Everyone talks about uncertainty, and many of you realize that the only thing that is certain in trading is uncertainty. The problem is that most people understand it on an intellectual level (“yeah, I think in probabilities”), but in reality, where the rubber meets the road, most traders don’t really accept uncertainty.
How do you know when you’ve truly accepted uncertainty? You’ll know, when you’ve embraced the randomness of probability (each trade or individual data point is a unique occurrence with a 50/50 chance, even in a skewed probability distribution). When you begin to truly embrace uncertainty you’ll notice one of or more of the following also occur; you won’t be thinking or worrying about it as much, you won’t be doing as much ‘mental P&L accounting’; and the symptoms of tick-itis will also remit.
I coach clients to not be attached to the outcome as one particular strategy to deal with uncertainty. And the good news is that when you begin to truly embrace uncertainty you also begin to create a positive feedback loop where realizing that its not worth being emotionally attached to any one trade, or even a series of trades; making it even easier to embrace the uncertainty. Non-attachment to outcomes helps one deal with uncertainty, and embracing uncertainty reinforces non-attachment to outcomes. That’s how it works, folks.
Think about this question for a moment:
When you put money in a slot machine and you lose, how do you feel? Most people don’t feel that bad. But when you bet your money on a trade and you lose, how do you feel? Most traders say they feel upset, angry, frustrated, ripped-off, even betrayed (betrayed by the market, betrayed by their method, or betrayed by the person who taught them the method).
So, what’s the difference between the slot machine and trading? In slots, there is no judgment or ego involved (the need to be right is greatly diminished). However, in trading it is 100% judgment (you might be ‘wrong’). In a trade, our ego, our judgment, our sense of self-worth and even our personal status in the eyes of others (e.g. trading partners, family, etc.) is susceptible to feeling assaulted for each tick away from our intended target. But in slots we become a robot. Go to a casino and walk by the slot machines; everyone is glazed over, practically in a hypnotic state as they automatically (brainlessly as my wife puts it) dump more coins into the machine, pressing the lever and not getting very upset for lack of a pay-out. No judgment is on the line, there is no possibility of being wrong….the slot player recognizes the situation for what it is, pure unadulterated randomness.
Trading is not random, but you must fully accept, beyond intellectual understanding, the randomness of probability.
I have taken to spending quiet time reflecting on the WHY that compels me to make bad trading decisions and where they truly originate. I reinstituted exercise into my day by walking about two to two and a half miles per day back in early November and moved to the treadmill in the cellar after the Maine winter arrived. With bad knees, I can no longer run, so I stick to walking and it gives me time to relax and think about the WHY. I've thrown in some strength training over the past two weeks and I feel better for it. Mostly, I am in this for mental dialysis and exercise second. Thirdly, my ability to stick to the regimen will reflect whether or not I have achieved the same discipline necessary to stick to proper trading fundamentals. Mrs. Bluecollar bought me two relaxation CD's that encorporate breathing exercises, muscle relaxation, positive affirmations, and calming music. I play them while I use the treadmill and am now in my second day of it. It is true that anxiety, stress, and fear are near the top of the list of reasons for trader failure.
As part of this whole thing, I am digging deep into my past and evaluating my life and the influence of those with whom I've encountered and the impressions that were left on me as a result.
I have also picked out some articles from Dr Andrew Menaker's blog at his website as part of my quest to become a trader: http://www.andrewmenaker.com/
I hope you get something from this one from March 29, 2011 entitled "Handling Uncertainty."
Handling Uncertainty
March 29th, 2011
Everyone talks about uncertainty, and many of you realize that the only thing that is certain in trading is uncertainty. The problem is that most people understand it on an intellectual level (“yeah, I think in probabilities”), but in reality, where the rubber meets the road, most traders don’t really accept uncertainty.
How do you know when you’ve truly accepted uncertainty? You’ll know, when you’ve embraced the randomness of probability (each trade or individual data point is a unique occurrence with a 50/50 chance, even in a skewed probability distribution). When you begin to truly embrace uncertainty you’ll notice one of or more of the following also occur; you won’t be thinking or worrying about it as much, you won’t be doing as much ‘mental P&L accounting’; and the symptoms of tick-itis will also remit.
I coach clients to not be attached to the outcome as one particular strategy to deal with uncertainty. And the good news is that when you begin to truly embrace uncertainty you also begin to create a positive feedback loop where realizing that its not worth being emotionally attached to any one trade, or even a series of trades; making it even easier to embrace the uncertainty. Non-attachment to outcomes helps one deal with uncertainty, and embracing uncertainty reinforces non-attachment to outcomes. That’s how it works, folks.
Think about this question for a moment:
When you put money in a slot machine and you lose, how do you feel? Most people don’t feel that bad. But when you bet your money on a trade and you lose, how do you feel? Most traders say they feel upset, angry, frustrated, ripped-off, even betrayed (betrayed by the market, betrayed by their method, or betrayed by the person who taught them the method).
So, what’s the difference between the slot machine and trading? In slots, there is no judgment or ego involved (the need to be right is greatly diminished). However, in trading it is 100% judgment (you might be ‘wrong’). In a trade, our ego, our judgment, our sense of self-worth and even our personal status in the eyes of others (e.g. trading partners, family, etc.) is susceptible to feeling assaulted for each tick away from our intended target. But in slots we become a robot. Go to a casino and walk by the slot machines; everyone is glazed over, practically in a hypnotic state as they automatically (brainlessly as my wife puts it) dump more coins into the machine, pressing the lever and not getting very upset for lack of a pay-out. No judgment is on the line, there is no possibility of being wrong….the slot player recognizes the situation for what it is, pure unadulterated randomness.
Trading is not random, but you must fully accept, beyond intellectual understanding, the randomness of probability.
Wednesday, May 22, 2013
May 22 ($1,117.21 Loss)
10:33 The market soared and it gave me a great opportunity to improve my TZA swing trade. I bought 1500 shares long TNA at 10:14 am at a price of $29.59. I really nailed the entry, just a few pennies from the bottom of the big move down. Added to my 200 shares long, I had a total 1700 shares long at $29.75. I sold off 500 shares of risk for a $10.59 loss. Then holding, I dumped the other 1200 shares at 29.80 for a gain of $65.99. Far too early, but I will take my gains when I can, given how my original TZA position went against me this morning. That market gave me a good chance to exit and I took it quickly and willingly. had I held the 1200 shares, I had up to about 47 cents of total gain; approximately $565.
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3:48 I am still very much a prisoner to emotion. Today has been particularly difficult for me as my compulsion to play for mean reversion has resulted in a bad loss. I am essentially back to where I started a few months ago, having lost my gains and back to breakeven. Not at all where I hoped to be, given that I am at a point where I really need to have gains from trading to sustain our household. After all this time, and all that i know about chart reading, it is mental/emotional short-comings that are an anchor to my progression. I took a number of 'practice trades' where I would mark the chart in the direction of momentum. Every one of them was a winner. Instead of taking the trade, I waited until I found an area that looked as though a direction change was to occur, and on a big momentum day, the change doesn't come. And today, I added to a loser trade and got punished for it. I know better. I know that doing that very thing, as I've mentioned on this blog, is what strong market players feast upon. That the only protection from the sharks is to stop out. And I didn't. This is purely emotional. Either fear or greed; one or the other. It appears that I'll finish the day with a loss of $1,117.21.
Something must change for me to continue. I am not a fool. But I am imprisoned by a psychological wall. They are two different things. But they will be synonymous and yield the same disastrous results if a change isn't made and I keep on the way I am going.
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The approach I am taking to trading, fading strong moves with an eye toward reversion to the mean, is a very stressful way to do this. Always looking for a direction change means always being uneasy; in a state of flux. And not stopping out a trade is incredibly stressful, depleting one's emotional capital. It relegates one to always playing from behind. It does not allow the sense of success to offset the sense of disappointment from the losing trades that always happen. It is always trading with anxiety. It is incredibly wearing on the psyche, even when it is going well. Like parachuting with no backup chute or walking a tightrope with no net below, only the most hardened non-feeling individuals (sociopaths?) can resist the chipping away at one's emotional capital.
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Last year, while still practice trading, I had hit the wall as I have today and decided to throw caution to the wind, so to speak. As strange and anti-intellectual as it sounds this involved setting and adhering to stops and not exiting trades except as a stop-out or within 15 minutes of the end of the trading day. Weird, it seemed to me. And it resulted in a great relief; a sense of 'comfort' that I had not felt before. And I achieved some success while doing it. Gains were of a size I had not seen since attempting to learn trading. At that time, I still needed work in chart reading, so my stop outs were adding up more than I liked, but I was ahead while trading the way it is supposed to be done. In other words, on the right path to success. What happened to change it is something I don't know. It was a slow drift away. Like an alcoholic taking just one sip of beer after having found sobriety. One little drink after a year then becomes two drinks per week then a drink every other day, then...
The power of the mind to fall back into bad habits is legendary. We all know people who cannot help themselves even when the answers seem so obvious... and easy for us. I have to get back to that mental place where I was last year that sent me to try and briefly succeed in trading the right way. Otherwise, I will have to give up on my dream.
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3:48 I am still very much a prisoner to emotion. Today has been particularly difficult for me as my compulsion to play for mean reversion has resulted in a bad loss. I am essentially back to where I started a few months ago, having lost my gains and back to breakeven. Not at all where I hoped to be, given that I am at a point where I really need to have gains from trading to sustain our household. After all this time, and all that i know about chart reading, it is mental/emotional short-comings that are an anchor to my progression. I took a number of 'practice trades' where I would mark the chart in the direction of momentum. Every one of them was a winner. Instead of taking the trade, I waited until I found an area that looked as though a direction change was to occur, and on a big momentum day, the change doesn't come. And today, I added to a loser trade and got punished for it. I know better. I know that doing that very thing, as I've mentioned on this blog, is what strong market players feast upon. That the only protection from the sharks is to stop out. And I didn't. This is purely emotional. Either fear or greed; one or the other. It appears that I'll finish the day with a loss of $1,117.21.
Something must change for me to continue. I am not a fool. But I am imprisoned by a psychological wall. They are two different things. But they will be synonymous and yield the same disastrous results if a change isn't made and I keep on the way I am going.
---------
The approach I am taking to trading, fading strong moves with an eye toward reversion to the mean, is a very stressful way to do this. Always looking for a direction change means always being uneasy; in a state of flux. And not stopping out a trade is incredibly stressful, depleting one's emotional capital. It relegates one to always playing from behind. It does not allow the sense of success to offset the sense of disappointment from the losing trades that always happen. It is always trading with anxiety. It is incredibly wearing on the psyche, even when it is going well. Like parachuting with no backup chute or walking a tightrope with no net below, only the most hardened non-feeling individuals (sociopaths?) can resist the chipping away at one's emotional capital.
---------
Last year, while still practice trading, I had hit the wall as I have today and decided to throw caution to the wind, so to speak. As strange and anti-intellectual as it sounds this involved setting and adhering to stops and not exiting trades except as a stop-out or within 15 minutes of the end of the trading day. Weird, it seemed to me. And it resulted in a great relief; a sense of 'comfort' that I had not felt before. And I achieved some success while doing it. Gains were of a size I had not seen since attempting to learn trading. At that time, I still needed work in chart reading, so my stop outs were adding up more than I liked, but I was ahead while trading the way it is supposed to be done. In other words, on the right path to success. What happened to change it is something I don't know. It was a slow drift away. Like an alcoholic taking just one sip of beer after having found sobriety. One little drink after a year then becomes two drinks per week then a drink every other day, then...
The power of the mind to fall back into bad habits is legendary. We all know people who cannot help themselves even when the answers seem so obvious... and easy for us. I have to get back to that mental place where I was last year that sent me to try and briefly succeed in trading the right way. Otherwise, I will have to give up on my dream.
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Tuesday, May 21, 2013
May 21 ( Gain $132.11 )
I was somewhat surprised when TNA rose at the open, and doubtful it was real?!
I held my TNA short that I put on late in the session yesterday.
==========
10:33 Covered 500 shares of TNA at 50.47 Gain $91.07. Still holding my 200 shares long TZA which is down only $37 at the present time.
==========
1:08 Shorted 500 TNA at 51.38. Covered about 5 minutes later at 51.29 for a 41.04 gain.
==========
1:40 The 51.21 support seems to be holding well on TNA; four out of the last seven candles have bounced off it.
==========
1:46 TNA broke support. My gut had been telling me to short, but with the way the market has been jumping up off any dip in price, I didn't trust to do it. Mainly because I didn't re-enter short at the top after taking my scalp gain at 1:08pm.
The market is actually acting normal (?) so far today. Odd for a Tuesday!
==========
3:38 TNA is just churning and chopping. I was holding on for a potential break down or break out, but it is 'dead in the water.' Moving average on my 15 minute chart is horizontal. Like I said, dead.
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4:00 Still holding my TZA long swing trade. No other shares held.
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1:40 The 51.21 support seems to be holding well on TNA; four out of the last seven candles have bounced off it.
==========
1:46 TNA broke support. My gut had been telling me to short, but with the way the market has been jumping up off any dip in price, I didn't trust to do it. Mainly because I didn't re-enter short at the top after taking my scalp gain at 1:08pm.
The market is actually acting normal (?) so far today. Odd for a Tuesday!
==========
3:38 TNA is just churning and chopping. I was holding on for a potential break down or break out, but it is 'dead in the water.' Moving average on my 15 minute chart is horizontal. Like I said, dead.
==========
4:00 Still holding my TZA long swing trade. No other shares held.
Monday, May 20, 2013
May 20 ($0)
9:49 Still holding my 200 shares TZA held over from Friday.
===============
10:02 My TZA trades, in the trading account and in the retirement account are stuck in a consolidation area. Not what I was expecting when I placed the trades EOD on Friday. Still holding.
===============
4:01 pm I kept the TZA trades and still holding. I went short TNA at 3:26 pm, 500 shares at 50.66. I got suckered into shorting at the bottom of the range and price rose for the next 15 minutes then bumped into resistance and came back down. I expected the price to break and it held the support level (my price level) for the rest of the day. I had numerous chances to exit even but instead considered that price might break down at end of day. None came and shares of TNA jumped at the close to the upper level of the channel it had been in for about the last 2 hours of the day. This market is hard to believe. Right is wrong and up is down, then vice-versa. Instincts tell me something dramatic has to happen when this level of oddity is afoot.
===============
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10:02 My TZA trades, in the trading account and in the retirement account are stuck in a consolidation area. Not what I was expecting when I placed the trades EOD on Friday. Still holding.
===============
4:01 pm I kept the TZA trades and still holding. I went short TNA at 3:26 pm, 500 shares at 50.66. I got suckered into shorting at the bottom of the range and price rose for the next 15 minutes then bumped into resistance and came back down. I expected the price to break and it held the support level (my price level) for the rest of the day. I had numerous chances to exit even but instead considered that price might break down at end of day. None came and shares of TNA jumped at the close to the upper level of the channel it had been in for about the last 2 hours of the day. This market is hard to believe. Right is wrong and up is down, then vice-versa. Instincts tell me something dramatic has to happen when this level of oddity is afoot.
===============
Friday, May 17, 2013
May 17 ($0)
Long 200 shares TZA near end of day for a weekend swing trade. Also long 250 shares TZA in the retirement account.
No other activity.
Thursday, May 16, 2013
May 16 (Gain $125.75)
11:07am First move of the day. Quick scalp... short TNA at 49.77. Cover at 49.71 for $26.01 gain. As much as I believe the S & P is overbought, I DO NOT TRUST this market right now to move much on the short side. There is too much Bullish euphoria.
==========
11:15 Price is back up to where I shorted my earlier scalp, and now creating HOD.
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11:30 SPY printed a doji on the 15 minute chart. Beware the reversal?
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11:39 Short 500 TNA at 49.79 at 11:39.
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12:07 Covered half; 250 shares at 49.68 for Gain of $25.43
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12:10 Covered remaining 250 shares at breakeven after price popped just after I covered my first 250 shares. Gain $2.65 I had as much as a $75 gain in this trade, but chose to hold. As I write this, price is above my breakeven and nearly touching my original stop at 49.85. It took ten candles of consolidation to drop to the 49.63 level and only two candles to recover the lost amount. Price is now above my original stop. All the momo is still bullish and shorts are scalps.
==========
12:23 There's the TNA break I was looking for. I was one consolidation wave/cycle too soon! But had I held and kept my stop, I would be out of the trade with a stop loss.
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3:13 Shorted 500 TNA at $49.31. Covered quickly (too quickly by looking at the chart now); all out $49.20 at 3:18pm. Gain $51.03.
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3:22 Wow, nice breakdown so far, TNA at 48.90 and dropping with speed. Should have stayed in!
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3:50 Long 500 shares TNA at 48.71 for quick scalp. Exit all 30 seconds later at 49.76; gain $20.63
Good thing to get out quickly... price now down to my entry level in under 2 minutes.
==========
3:55 Price moving up nicely now, again out too soon. However, with only ten minutes left in the day, I think scalping is the best route unless I'm willing to carry the trade overnight.
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3:59 Wow... out WAY too soon on that scalp. It has run up to 49.13; up to a $200 winner had I held.
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11:15 Price is back up to where I shorted my earlier scalp, and now creating HOD.
==========
11:30 SPY printed a doji on the 15 minute chart. Beware the reversal?
==========
11:39 Short 500 TNA at 49.79 at 11:39.
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12:07 Covered half; 250 shares at 49.68 for Gain of $25.43
==========
12:10 Covered remaining 250 shares at breakeven after price popped just after I covered my first 250 shares. Gain $2.65 I had as much as a $75 gain in this trade, but chose to hold. As I write this, price is above my breakeven and nearly touching my original stop at 49.85. It took ten candles of consolidation to drop to the 49.63 level and only two candles to recover the lost amount. Price is now above my original stop. All the momo is still bullish and shorts are scalps.
==========
12:23 There's the TNA break I was looking for. I was one consolidation wave/cycle too soon! But had I held and kept my stop, I would be out of the trade with a stop loss.
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3:13 Shorted 500 TNA at $49.31. Covered quickly (too quickly by looking at the chart now); all out $49.20 at 3:18pm. Gain $51.03.
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3:22 Wow, nice breakdown so far, TNA at 48.90 and dropping with speed. Should have stayed in!
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3:50 Long 500 shares TNA at 48.71 for quick scalp. Exit all 30 seconds later at 49.76; gain $20.63
Good thing to get out quickly... price now down to my entry level in under 2 minutes.
==========
3:55 Price moving up nicely now, again out too soon. However, with only ten minutes left in the day, I think scalping is the best route unless I'm willing to carry the trade overnight.
==========
3:59 Wow... out WAY too soon on that scalp. It has run up to 49.13; up to a $200 winner had I held.
Wednesday, May 15, 2013
May 15 (Gain $95.75)
9:34 am Still holding my 500 shares.
========
9:56 The first six candles of TNA have long upper wicks. A lot of selling at 48.90 area. Now the 7th candle is rising without any notable selling. Looks like the market was clearing out the sellers and the shorts and wants to push up... biggest candle of the day as of right now and it is green, unfortunately.
========
10:00 With price up to yesterday's closing area, will there be selling? Market looks very strong here...
========
10:13 $48.83, the 50% retracement level between my price and the earlier high of $49.20 was just hit and price is bouncing up from it. Remove any doubt that traders who do not stop out but rather average their losing trades (as I did) are easy marks for the markets. Averaging losing trades is the reward for the winners in the market. Price just used that 50% retracement as support again at 10:17 am and is running to the HOD.
========
10:56 On the 15 minute SPY chart, four attempts to make the new high has brought sellers in, resulting in a long upper wick. The current attempt is at the HOD so let's see if it can break through. This level corresponds to a longer term, historical trend line. Resistance did not hold... breaking out to new highs. I am unbelievable frustrated with the way I have managed this trade, from the outset. Absolutely dead wrong from the beginning, but mostly wrong for not stopping it out. From there, wrong for not acting on the four opportunities yesterday to get out this bad trade even, though I did use that time to take 2/3 of the position off for a small loss.
========
11:44 Shorted 1500 shares TNA at 49.80. Currently short 2000 total shares at 49.46
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2:12 Covered 1000 shares TNA at 49.47. Loss $7.12. Holding 1000 shares.
Exited 1250 shares from retirement account: sold all 1250 shares of TZA at $31.56 for a gain $237.98
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2:20 Covered remaining 1000 TNA at 49.36. Gain $102.86.
========
ok, this might keep falling, but I took an opportunity to exit this mess with very little pain overall. Got out of a very badly executed trade for a total two-day loss of $44.20 lost $139.94 yesterday on the same trade. If I had held the 2000 shares until this moment, I'd be up $700, btw. But, that would require perfect trading and this trade was anything but. I scrapped and cajoled my bad decisions into a loss of under $50. I'll take that and try to learn a lesson from it. And, I made about $240 in the IRA account, so net net, I'm up $193.78
========
2:58 As I review the SPY historical chart, I notice that the rollover today in the market has brought today's price down to the trendline I discussed in last night's and today's earlier post: candle now has an upper wick.
========
4:51 No more trades after the aforementioned. That was a rough couple days for me, victimized by my own poor decisions. As I mentioned earlier, I consider myself lucky to have escaped with less than a $50 loss over the two days. The way I played this set me in position to take a sizable gain had i stuck with today's trade instead of scaling out. Philosophically speaking, is it better to not be nicely rewarded for bad behavior? I think so.
On a longer timeframe, I think this market is overbought by a large degree. It continues to confound me by how it can run up like it has. Pendulums do not swing in one direction.
========
9:56 The first six candles of TNA have long upper wicks. A lot of selling at 48.90 area. Now the 7th candle is rising without any notable selling. Looks like the market was clearing out the sellers and the shorts and wants to push up... biggest candle of the day as of right now and it is green, unfortunately.
========
10:00 With price up to yesterday's closing area, will there be selling? Market looks very strong here...
========
10:13 $48.83, the 50% retracement level between my price and the earlier high of $49.20 was just hit and price is bouncing up from it. Remove any doubt that traders who do not stop out but rather average their losing trades (as I did) are easy marks for the markets. Averaging losing trades is the reward for the winners in the market. Price just used that 50% retracement as support again at 10:17 am and is running to the HOD.
========
10:56 On the 15 minute SPY chart, four attempts to make the new high has brought sellers in, resulting in a long upper wick. The current attempt is at the HOD so let's see if it can break through. This level corresponds to a longer term, historical trend line. Resistance did not hold... breaking out to new highs. I am unbelievable frustrated with the way I have managed this trade, from the outset. Absolutely dead wrong from the beginning, but mostly wrong for not stopping it out. From there, wrong for not acting on the four opportunities yesterday to get out this bad trade even, though I did use that time to take 2/3 of the position off for a small loss.
========
11:44 Shorted 1500 shares TNA at 49.80. Currently short 2000 total shares at 49.46
========
2:12 Covered 1000 shares TNA at 49.47. Loss $7.12. Holding 1000 shares.
Exited 1250 shares from retirement account: sold all 1250 shares of TZA at $31.56 for a gain $237.98
========
2:20 Covered remaining 1000 TNA at 49.36. Gain $102.86.
========
ok, this might keep falling, but I took an opportunity to exit this mess with very little pain overall. Got out of a very badly executed trade for a total two-day loss of $44.20 lost $139.94 yesterday on the same trade. If I had held the 2000 shares until this moment, I'd be up $700, btw. But, that would require perfect trading and this trade was anything but. I scrapped and cajoled my bad decisions into a loss of under $50. I'll take that and try to learn a lesson from it. And, I made about $240 in the IRA account, so net net, I'm up $193.78
========
2:58 As I review the SPY historical chart, I notice that the rollover today in the market has brought today's price down to the trendline I discussed in last night's and today's earlier post: candle now has an upper wick.
========
4:51 No more trades after the aforementioned. That was a rough couple days for me, victimized by my own poor decisions. As I mentioned earlier, I consider myself lucky to have escaped with less than a $50 loss over the two days. The way I played this set me in position to take a sizable gain had i stuck with today's trade instead of scaling out. Philosophically speaking, is it better to not be nicely rewarded for bad behavior? I think so.
On a longer timeframe, I think this market is overbought by a large degree. It continues to confound me by how it can run up like it has. Pendulums do not swing in one direction.
Tuesday, May 14, 2013
May 14 (Loss $139.94)
Watching the open... TNA up during the first 6 minutes.
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9:57 am Short 500 TNA at $48.19.
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10:12 I found that I am short here with everyone else. And being with the herd, being part of the consensus, is usually a losing proposition. I had an opportunity to exit with a $35 gain at the 10:05 candle timeframe and considered it. I should learn to trust my instincts; price now at 48.28 and showing higher ambitions.
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10:18 TNA momentum has stalled for the time being at / just under 48.30. Looks like a reversal candle now that we're out that candle and into the 10:20. Short term pullback expected... so the question is, do I exit even? Market will give me a chance here, if typical market behavior holds. I'm even now and every time the market dips a bit, buyers pop the stock back to my price. Typical behavior of a stock at the 'consensus level' where where shorts who are there with me buy to cover from the anxiety of seeing TNA run up through the last two candles. The hard part is deciding if the stock will drop once the anxious shorts get flat and then reveal whether there are natural buyers here. No buyers = stock drops and puts me in the money.
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10:51 Wrong choice. SPY is virtually straight up since the open; having touched the 7 ema once at the start of today's session. This rally is dumbfounding, and it continues. I was watching David Tepper on CNBC this morning and his bullish comments sent the market up. Smart guy giving the markets another excuse to shoot the moon. My bad choice for not stopping out. I am now short at $48.46 with 1500 shares of TNA. Stupid is as stupid does?
--------
Just did some chart review... today so far is the third biggest daily run-up in SPY since mid-April; the day is only half done. I believe that it was designed to punish more shorts, causing them to cover... a short-covering rally.
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11:10 SPY finally touched the 7 ema in this candle. My goodness.
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11:17 TNA stalled for the past three candles. Based on how hard the SPY has moved up today, I am holding my shares for now. I will likely take off 1000 shares at or near breakeven like many other traders intend to do. Getting a good fill will be difficult because the big players know I and others like me are looking for the exits. Making bad decisions comes with a price.
Based on the run up today, I believe my price is a good one to produce some gains on the short side. But I don't expect TNA or SPY to collapse short-term producing very nice gains unless some negative headline crosses the news wires.
---------
11:35 TNA has put in 2 doji candles in the last 6 on the 5 min chart and the usually reliable reversal indicator of a doji at 11:00 on the 15 minute chart. Yet, it is continuing higher. SPY is slowed and appears to be consolidating around the 164.90 level, pushing up for a a possible short-term s=double top. However, it is still above the 7 ema, indicating strength.
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12:00 TNA will not drop. This is freakish today. These days come along once or twice a month and it screws the chances at reversion gains. The Federal Reserve is in the debt markets like a fiend today, buying without a care... and the stock market is responding. Good news is a screaming buy, bad news is a slight up day, very bad news is a very slight down day.
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12:14 SPY still hasn't been close to touching the 17 ema yet since the open today. It is registering nearly 98 on the historical chart stochastic. Also it is at the upper trend line that defines the post November 2012 rally.
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12:18 TNA pushing new hod.
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12;30 TNA pulling back slightly. Just bought 500 TZA in our retirement account at $31.88
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12:35 SPY & TNA just touched the 17 ema for the first time today; holding that moving average right now. I'm now thinking that it has been a long time since I was fooled this badly on a mean reversion play; that is to say, shorting so early in a large breakout day. I was using my new edge info as an indicator and it distorted my results.
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12:50 TNA just closed below the 17 ema but is certainly not breaking down in any way. If it does retreat today, chances are that it will be slow and not very far; probably through or after periods of consolidation.
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1:45 TNA has basically gone nowhere over the past hour and fifteen minutes; trading in a 15 cent range on light volume. This does not bode well for a late day pullback. More likely it will consolidate into the close or run up strongly into the close. With possible pullback sometime tomorrow. I am not excited to hold this many shares overnight however. Hoping to get out near even before day's end... like so many others. And that-- is perhaps a reason it won't happen.
It is interesting to note that taking into account my price and the high of the day, there has been a 50% Fib retracement four times as of right now.
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1:57 Exited 1000 shares of TNA, loss of $139.94. Keeping the remaining 500 shares for now. Also exited my TZA shares in the retirement account for a $104.76 gain.
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2:02 My trade is now slightly positive. I'd actually have a $40 gain on the whole lot had I not scaled out.
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2:28 Now down and hovering around my entry price. Looking for a drop to the 48.30 area, if it decides to drop more. It is no accident that my price is acting as support; many like me made the same bad decision and are buying to cover, driving the price up.
Being in the herd (part of consensus) is a bad place to be- leaving one predictably vulnerable. -- *emphasis on 'predictably'
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3:42 Still holding my last 500 shares of TNA short at 48.46. In hindsight, I should have dumped them all my shares in one of the four candle/timeframes when they were at or near break even. The stock was behaving like it might drop a bit more in the 2:50 pm timeframe. Now we are pushing the highs of the day here at the close. As I noted in an earlier post, this is common. Especially on Central Bank-induced, short squeeze big rally days.
----------
Also, I went long 250 shares of TZA at $31.91 at 3:40pm in the retirement account.
---------
4:01 What a disappointment today. A day with a great deal of promise but I changed my approach based on some signals I have been watching over the past three trading days and it altered my entry decision. My original thought was that this new method was a great way to keep me in a trade because it gave me a sense of when each leg (minor trend) of a move would end- In other words, and exit signal. Why I used it as an entry, I still can't decipher. Unfamiliarity with it? My predilection to do reversion trades rather than trend trades? Whatever the reason, it led to a loss today and I am holding some unrealized losses that I think will reverse for tomorrow. The fact that this S & P rally has run SO FAR and is at an upper trend line say to me that a move down is likely.
9:57 am Short 500 TNA at $48.19.
--------
10:12 I found that I am short here with everyone else. And being with the herd, being part of the consensus, is usually a losing proposition. I had an opportunity to exit with a $35 gain at the 10:05 candle timeframe and considered it. I should learn to trust my instincts; price now at 48.28 and showing higher ambitions.
--------
10:18 TNA momentum has stalled for the time being at / just under 48.30. Looks like a reversal candle now that we're out that candle and into the 10:20. Short term pullback expected... so the question is, do I exit even? Market will give me a chance here, if typical market behavior holds. I'm even now and every time the market dips a bit, buyers pop the stock back to my price. Typical behavior of a stock at the 'consensus level' where where shorts who are there with me buy to cover from the anxiety of seeing TNA run up through the last two candles. The hard part is deciding if the stock will drop once the anxious shorts get flat and then reveal whether there are natural buyers here. No buyers = stock drops and puts me in the money.
--------
10:51 Wrong choice. SPY is virtually straight up since the open; having touched the 7 ema once at the start of today's session. This rally is dumbfounding, and it continues. I was watching David Tepper on CNBC this morning and his bullish comments sent the market up. Smart guy giving the markets another excuse to shoot the moon. My bad choice for not stopping out. I am now short at $48.46 with 1500 shares of TNA. Stupid is as stupid does?
--------
Just did some chart review... today so far is the third biggest daily run-up in SPY since mid-April; the day is only half done. I believe that it was designed to punish more shorts, causing them to cover... a short-covering rally.
--------
11:10 SPY finally touched the 7 ema in this candle. My goodness.
---------
11:17 TNA stalled for the past three candles. Based on how hard the SPY has moved up today, I am holding my shares for now. I will likely take off 1000 shares at or near breakeven like many other traders intend to do. Getting a good fill will be difficult because the big players know I and others like me are looking for the exits. Making bad decisions comes with a price.
Based on the run up today, I believe my price is a good one to produce some gains on the short side. But I don't expect TNA or SPY to collapse short-term producing very nice gains unless some negative headline crosses the news wires.
---------
11:35 TNA has put in 2 doji candles in the last 6 on the 5 min chart and the usually reliable reversal indicator of a doji at 11:00 on the 15 minute chart. Yet, it is continuing higher. SPY is slowed and appears to be consolidating around the 164.90 level, pushing up for a a possible short-term s=double top. However, it is still above the 7 ema, indicating strength.
---------
12:00 TNA will not drop. This is freakish today. These days come along once or twice a month and it screws the chances at reversion gains. The Federal Reserve is in the debt markets like a fiend today, buying without a care... and the stock market is responding. Good news is a screaming buy, bad news is a slight up day, very bad news is a very slight down day.
----------
12:14 SPY still hasn't been close to touching the 17 ema yet since the open today. It is registering nearly 98 on the historical chart stochastic. Also it is at the upper trend line that defines the post November 2012 rally.
----------
12:18 TNA pushing new hod.
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12;30 TNA pulling back slightly. Just bought 500 TZA in our retirement account at $31.88
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12:35 SPY & TNA just touched the 17 ema for the first time today; holding that moving average right now. I'm now thinking that it has been a long time since I was fooled this badly on a mean reversion play; that is to say, shorting so early in a large breakout day. I was using my new edge info as an indicator and it distorted my results.
----------
12:50 TNA just closed below the 17 ema but is certainly not breaking down in any way. If it does retreat today, chances are that it will be slow and not very far; probably through or after periods of consolidation.
----------
1:45 TNA has basically gone nowhere over the past hour and fifteen minutes; trading in a 15 cent range on light volume. This does not bode well for a late day pullback. More likely it will consolidate into the close or run up strongly into the close. With possible pullback sometime tomorrow. I am not excited to hold this many shares overnight however. Hoping to get out near even before day's end... like so many others. And that-- is perhaps a reason it won't happen.
It is interesting to note that taking into account my price and the high of the day, there has been a 50% Fib retracement four times as of right now.
----------
1:57 Exited 1000 shares of TNA, loss of $139.94. Keeping the remaining 500 shares for now. Also exited my TZA shares in the retirement account for a $104.76 gain.
----------
2:02 My trade is now slightly positive. I'd actually have a $40 gain on the whole lot had I not scaled out.
----------
2:28 Now down and hovering around my entry price. Looking for a drop to the 48.30 area, if it decides to drop more. It is no accident that my price is acting as support; many like me made the same bad decision and are buying to cover, driving the price up.
Being in the herd (part of consensus) is a bad place to be- leaving one predictably vulnerable. -- *emphasis on 'predictably'
----------
3:42 Still holding my last 500 shares of TNA short at 48.46. In hindsight, I should have dumped them all my shares in one of the four candle/timeframes when they were at or near break even. The stock was behaving like it might drop a bit more in the 2:50 pm timeframe. Now we are pushing the highs of the day here at the close. As I noted in an earlier post, this is common. Especially on Central Bank-induced, short squeeze big rally days.
----------
Also, I went long 250 shares of TZA at $31.91 at 3:40pm in the retirement account.
---------
4:01 What a disappointment today. A day with a great deal of promise but I changed my approach based on some signals I have been watching over the past three trading days and it altered my entry decision. My original thought was that this new method was a great way to keep me in a trade because it gave me a sense of when each leg (minor trend) of a move would end- In other words, and exit signal. Why I used it as an entry, I still can't decipher. Unfamiliarity with it? My predilection to do reversion trades rather than trend trades? Whatever the reason, it led to a loss today and I am holding some unrealized losses that I think will reverse for tomorrow. The fact that this S & P rally has run SO FAR and is at an upper trend line say to me that a move down is likely.
May 13 ($0)
No trades. Still evaluating the potential addition to my edge. Looks good when markets are moving, deceiving or valueless when stagnant.
Friday, May 10, 2013
May 10 (Loss $ 7.)
Watching and learning, trying to use what might become part of my edge. Not sure if it will help me yet or not. It needs refinement. I used it to short 500 TNA at $47.30 during the 2:35 pm candle. I stopped it out in the 2:50 candle when it looked like it was going up. Tiny loss of $7.
So now I am logged out and calling it an early day... but still watching the charts currently at 3:00pm. Looks like my breakdown might be in the works; TNA down to 47.21 and threatening lower. Could be I exited one consolidation wave too soon. No matter, it was a stop and I had to honor it.
I'm leaving the computer now and will check the chart later. Perhaps leave a comment here.
May 9 ($0)
No trades yesterday, Thursday May 9th.
I found myself extremely tired and tried to lie down to power-nap mid day but even that didn't work out. Then I got back to the charts and found something that struck me as new, so I have been testing it since yesterday afternoon. i don't know if it will help me or not, but it looks promising.
I found myself extremely tired and tried to lie down to power-nap mid day but even that didn't work out. Then I got back to the charts and found something that struck me as new, so I have been testing it since yesterday afternoon. i don't know if it will help me or not, but it looks promising.
Wednesday, May 8, 2013
May 8 (Gain $348.42)
9:34 am, Exit 1000 shares of TNA held overnight at $46.08, Gain $137.82
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9:44 Short 500 TNA at $46.26
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10:47 Holding. The SPY is straight up- unfreaking believable. But TNA is trading in a range on high overall volume through the first 45 minutes of trading. This sure seems like an asymmetric-odds short here. Either that or TNA is going to go up like a rocket at a moment's notice.
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10:57 This sure looks and feels like a top in the markets. My goodness, how does this thing keep going up like this?!
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11:11 Shorted 500 shares TNA at 46.59; full 1000 share position short at average price of $46.42
Also went long 500 TZA in our TDA retirement account, at $33.65; perhaps longer term for that one.
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12:08 I say it again. Unbelievable. Historical chart shows TNA straight up since April 18, except for one day. A quick look back and it appears that this is the most direct upward climb since October 2011 (complete quick-glance estimation).
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1:10 Well, I had a chance to get out even at the 12:30 candle but I was sure this would break. Apparently in this irrational, Fed inflated market, two red candles and 25 cents is considered a break down. There is no rationality to this market; buy the dips, buy the highs, buy it all. Let's go! Everyone on the same side of the boat!
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1:20 Hitting new highs!? And this after dojis on both the SPY and the TNA 15 minute charts! The 15 min doji has always been a reliable reversal indicator. A doji on the TNA 5 minute chart which is often a sign to keep your eyes open at 1:00pm.
If anyone says the market isn't manipulated, they are a pure unadulterated liar, in my opinion. having said that, and for all my complaining, it is my responsibility to trade to win: trade the market that is on my screen and not the one that seems rational. However, when all the signals that have worked for me and for others for years somehow prove useless, one knows that something is amiss.
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2:06 Apparently, it now takes a double-doji on the TNA 15 minute chart to move the stock down. I was up by $120 on my trade but chose to hold. I'm certainly hoping, in this market environment, that I didn't do the wrong thing. Time will tell. My trade is back to a gain now, though only by a little.
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2:09 Got the drop I was looking for and took 750 shares (3/4) of my position off at $46.23 for a gain of $136.83. I'm holding the last 250 shares and will liquidate them if price returns to my break even of 46.42 per share.
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2:32 Exited my final 250 shares at $46.12 with a gain of $73.78. Perhaps too soon... price still dropping.
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Definitely too soon, had another 50+ cents per share available to me.
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3:27 After the big pullback (sarcasm), SPY & QQQ have gone on to new record highs! This market is crazy. TNA not as ebullient though. Isn't it INTERESTING that TNA has topped out at the average entry price I held from earlier today! This is how it all works, as I have said before. Note also that it was the support level at 12:30 when I had a chance to get out even but didn't; now acting as resistance.
This is not magic. I have known for a long time and preach that the market moves based on the bad/reckless buying and selling habits of the 90% (?) who lose at this 'game.' On that trade in TNA earlier, I added to a losing trade but my sense was that the market was aching for a reversal, based on my reading of the charts. AND THAT AVERAGE PRICE WAS THE EVENTUAL S/R LEVEL FOR THE PRIMARY TRENDS OF THE REST OF THE DAY; hit at 12:30, 2:20, and 3:25pm.
Could it be any clearer that those who do not stop out, and especially those who average their trades for better prices are the grist for the market's mill? I have seen this every day for years, though not fully understood it until the last 6-8 months!
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3:41 My gut and every fiber of my being are telling me that this is a short term top in the markets. I expect some kind of 'big news headline' now that will allow the major players to send the markets down in the next few days; something that the markets would normally shrug off while rising to new highs will now be cause for a drop, I'd guess.
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4:02 Absolutely shocking: TNA rocketed up into the close and found its high of the day (HOD). Unreal. Unreal.
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9:44 Short 500 TNA at $46.26
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10:47 Holding. The SPY is straight up- unfreaking believable. But TNA is trading in a range on high overall volume through the first 45 minutes of trading. This sure seems like an asymmetric-odds short here. Either that or TNA is going to go up like a rocket at a moment's notice.
========
10:57 This sure looks and feels like a top in the markets. My goodness, how does this thing keep going up like this?!
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11:11 Shorted 500 shares TNA at 46.59; full 1000 share position short at average price of $46.42
Also went long 500 TZA in our TDA retirement account, at $33.65; perhaps longer term for that one.
========
12:08 I say it again. Unbelievable. Historical chart shows TNA straight up since April 18, except for one day. A quick look back and it appears that this is the most direct upward climb since October 2011 (complete quick-glance estimation).
========
1:10 Well, I had a chance to get out even at the 12:30 candle but I was sure this would break. Apparently in this irrational, Fed inflated market, two red candles and 25 cents is considered a break down. There is no rationality to this market; buy the dips, buy the highs, buy it all. Let's go! Everyone on the same side of the boat!
========
1:20 Hitting new highs!? And this after dojis on both the SPY and the TNA 15 minute charts! The 15 min doji has always been a reliable reversal indicator. A doji on the TNA 5 minute chart which is often a sign to keep your eyes open at 1:00pm.
If anyone says the market isn't manipulated, they are a pure unadulterated liar, in my opinion. having said that, and for all my complaining, it is my responsibility to trade to win: trade the market that is on my screen and not the one that seems rational. However, when all the signals that have worked for me and for others for years somehow prove useless, one knows that something is amiss.
========
2:06 Apparently, it now takes a double-doji on the TNA 15 minute chart to move the stock down. I was up by $120 on my trade but chose to hold. I'm certainly hoping, in this market environment, that I didn't do the wrong thing. Time will tell. My trade is back to a gain now, though only by a little.
========
2:09 Got the drop I was looking for and took 750 shares (3/4) of my position off at $46.23 for a gain of $136.83. I'm holding the last 250 shares and will liquidate them if price returns to my break even of 46.42 per share.
========
2:32 Exited my final 250 shares at $46.12 with a gain of $73.78. Perhaps too soon... price still dropping.
========
Definitely too soon, had another 50+ cents per share available to me.
========
3:27 After the big pullback (sarcasm), SPY & QQQ have gone on to new record highs! This market is crazy. TNA not as ebullient though. Isn't it INTERESTING that TNA has topped out at the average entry price I held from earlier today! This is how it all works, as I have said before. Note also that it was the support level at 12:30 when I had a chance to get out even but didn't; now acting as resistance.
This is not magic. I have known for a long time and preach that the market moves based on the bad/reckless buying and selling habits of the 90% (?) who lose at this 'game.' On that trade in TNA earlier, I added to a losing trade but my sense was that the market was aching for a reversal, based on my reading of the charts. AND THAT AVERAGE PRICE WAS THE EVENTUAL S/R LEVEL FOR THE PRIMARY TRENDS OF THE REST OF THE DAY; hit at 12:30, 2:20, and 3:25pm.
Could it be any clearer that those who do not stop out, and especially those who average their trades for better prices are the grist for the market's mill? I have seen this every day for years, though not fully understood it until the last 6-8 months!
========
3:41 My gut and every fiber of my being are telling me that this is a short term top in the markets. I expect some kind of 'big news headline' now that will allow the major players to send the markets down in the next few days; something that the markets would normally shrug off while rising to new highs will now be cause for a drop, I'd guess.
========
4:02 Absolutely shocking: TNA rocketed up into the close and found its high of the day (HOD). Unreal. Unreal.
Tuesday, May 7, 2013
May 7 (Gain $55.91)
Short 500 shares of TNA at $45.75 at 9:40 am. Covered all at 45.75 at 10:08.
Gain $55.91
Out far far too soon. I have to modify my strategy to account for my lack of exit acuity. Perhaps taking off half to lock in small gains then allowing the remainder to stop out at breakeven or run to the full extent that momentum will carry it. Now, to find a quick easy way to do this in the inefficient, clunky, inadequate IB trading platform; that will be difficult.
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Short 500 TNA, $46.08 at 1:36 pm.
Short 500 TNA, $46.37 at 3:59 pm
Average cost: $46.22
Gain $55.91
Out far far too soon. I have to modify my strategy to account for my lack of exit acuity. Perhaps taking off half to lock in small gains then allowing the remainder to stop out at breakeven or run to the full extent that momentum will carry it. Now, to find a quick easy way to do this in the inefficient, clunky, inadequate IB trading platform; that will be difficult.
=========
Short 500 TNA, $46.08 at 1:36 pm.
Short 500 TNA, $46.37 at 3:59 pm
Average cost: $46.22
Monday, May 6, 2013
May 6 (Gain $60)
Content to watch some very easy trading opportunities go by today, but I saw one that I wouldn't pass up. Went short 500 shares TNA at $45.42 at 2:20pm. Covered all at 45.29, 2:43pm, thinking that it hit a notable resistance level on slightly up volume. Thinking a small pop here then a decision as to whether or not to re-enter short. Received a lousy fill that cost me 3 cents; damn black boxes.
Gain $60
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2:14 Got the pop in the 3:00 candle but I missed the chance to enter short as I had stepped away from the computer.
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Gain $60
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2:14 Got the pop in the 3:00 candle but I missed the chance to enter short as I had stepped away from the computer.
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Friday, May 3, 2013
Thursday, May 2, 2013
May 2 (Gain $265.24)
Had to review yesterday's sloppy execution and come to some sort of conclusion on how to proceed next.
I kept 750 shares of TNA overnight and found myself with a nice gain after a gap up at open. Sold for gain of $259.59. I covered 2000 shares of TNA last night at the close even though I believed I had a good price: I could not responsibly carry 2750 shares long overnight. So, had I kept the lot, I would have a very nice gain today instead of taking the big loss yesterday. But, that's trading. Bigger players often drive price down at the close knowing that weaker hands are looking to get even or put some gains on the board if price climbs. They force those of us with small accounts into losses EOD. As I said, that's trading. And, it is my fault for carrying the loss in the first place. My instincts for price level and chart reading were good, but risk management would not let me carry nearly 3000 shares overnight; it is that simple.
I tried another trade today, a short at 11:14 am, 500 shares of TNA at 42.36. I exited at 11:38 after price did not break down as I had hoped; Gain $5.65 (breakeven). Wise choice: price reversed up shortly thereafter.
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Today, I did some paper trading and actually did fine; three stop outs and three winners. Winners exceeded the stop losses.
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Looking forward to tomorrow. Being more selective, not as busy and eager to be trading. Instead, focusing on the top quality entries as I did last month when I first started trading live.
I kept 750 shares of TNA overnight and found myself with a nice gain after a gap up at open. Sold for gain of $259.59. I covered 2000 shares of TNA last night at the close even though I believed I had a good price: I could not responsibly carry 2750 shares long overnight. So, had I kept the lot, I would have a very nice gain today instead of taking the big loss yesterday. But, that's trading. Bigger players often drive price down at the close knowing that weaker hands are looking to get even or put some gains on the board if price climbs. They force those of us with small accounts into losses EOD. As I said, that's trading. And, it is my fault for carrying the loss in the first place. My instincts for price level and chart reading were good, but risk management would not let me carry nearly 3000 shares overnight; it is that simple.
I tried another trade today, a short at 11:14 am, 500 shares of TNA at 42.36. I exited at 11:38 after price did not break down as I had hoped; Gain $5.65 (breakeven). Wise choice: price reversed up shortly thereafter.
-----
Today, I did some paper trading and actually did fine; three stop outs and three winners. Winners exceeded the stop losses.
-----
Looking forward to tomorrow. Being more selective, not as busy and eager to be trading. Instead, focusing on the top quality entries as I did last month when I first started trading live.
Wednesday, May 1, 2013
May 1 - ($1,100 loss)
A really rough day today, leaving a bitter taste in my mouth. My approach must change. Today should have been a big winner for me, given my expectation of a break down yesterday. The break came, and I screwed it up.
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