March 9th

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

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

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

March 8th

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

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

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

March 5th, Friday

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

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

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

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

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