April 23rd

Wow, a day of huge highs and lows for me personally when paper-trading the SKF and GS. To begin, my trade held overnight did pretty much what I expected and yielded a gain of $1.14 per share. In fact, at the open I added another position on to it which added another $1.04 per share gain... for a total of $2.18 on the trade in total. I learned a great deal about trading the open however! I clicked the transaction shortly after the opening bell because I had a very nice gain going. However, the trade was not executed until 7 minutes later. I lost most of the gain showing on the screen and was lucky to salvage a winner at all on the whole lot. This was incredibly frustrating. Well, it was to get worse from there. I was again trying to stick to the trend/momentum plays. I got chopped out/ stopped out consistently all morning to the point where I had lost all my gains from the overnight trade and was in the hole for about $2 - $3.00 per share! Talk about ugly reversals! Much like yesterday, the chop took me away from trying to play momentum and took me back to trying to play for reversals... it was what would be working in that type of action. With this change in strategy, I started to get a few winners, 7 out of 8, in fact. They were small gains and I was still down a bunch, but things were looking better. Then, the momentum came into the market and I was caught playing for reversals. At 2:10 pm, there started a drop in SKF that would have been a terrific short for a momentum play. Not for me though, I got caught on the wrong side of it and the market proceeded to "drop me on my head." I took a $3.55 per share loss! Ouch! At that point, albeit a bit late, I switched strategies and went back to trend/momentum trading again. I went 11 for 22 with a $ 4.73 gain and made back my losses of the day, finishing the day with a 98.4 cents per share gain. However, like yesterday, I am in a big position overnight. I didn't want to be, but I was unwilling to take the loss when I went against the trend in SKF during it'sbig drop into the close. So, with my success last night in fading a powerful uni-directional move, I decided to hold again. I'm currently down about $6.40 per share but I am counting on the trade to revert to the mean at open tomorrow. We'll see. This is a fairly reliable strategy. I just hope no news hits overnight to "drop me on my head again." For today, I am glad to escape with a gain, considering what went on. I really am undisciplined... all over the place. partly because I am playing two strategies so I can stay in the market all day, trying to profit from what the market throws at me. After all, this is training, not reall money trading. I need the practice in all facets of the game. For instance, today was the first time I tried to trade the opening bell. I learned something. Tomorrow, I'll try the same thing. This might get ugly though. I have a day job appointment which won't allow me to be here at the open... I'm going to try to change the appointment to 10:30 so I can trade that open position. If not, I'll just let it ride....
For the day:
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34 for 63, a 54% win rate. Gain of 98.4 cents per share.

Tips For New Traders -

I just found a reference on Don Miller's site to the following interview with Mark Douglas, author of "Trading In The Zone," and "The Disciplined Trader."

http://www.4shared.com/file/96740657/227e2748/Mark_Douglas_-_Mind_Over_Market.html

I HIGHLY recommend this 53 minute interview for beginning and slightly experienced traders. It is eye-opening to those (like myself) who haven't thought deeply enough about the psychology of trading. I am planning to watch it again tomorrow and I'll likely go to Amazon to buy Mark's book, "Trading In The Zone." So much of what's in the interview is akin to what experienced traders on the blogosphere espouse in their writings. For example, his principle of looking at the market in terms of probabilities, etc. Take a look at it, I think you'll like it...

April 22nd

The importance of focus is clear to me now that the market has closed. I came into the markets late after a day-job appointment and found myself trying to paper-trade the choppiness in SKF between 2:15 pm and 3:30. Frankly, I felt like I was being chopped to bits between 2:24 pm and 2:50 pm; stopped out on 6 out of 8 trades. I was still looking for a momentum move though, and it came at 3:35 pm... and what a nice move it was. I was long a double position at an average of $60.95 per share and foolishly sold it into this first green candle. I had been fooled by the prior choppiness and didn't expect the move to continue... I thought it would do a quick reverse as it had been. In hindsight, this was a very costly maneuver. While I took a nice 84 cents per share gain on the trade, the gain would have been up to an $8.48 per share had I held into the market close! And here lies the importance of focus. The choppiness lulled me into my old risky pattern of playing for a reversal into this final big move up in SKF. Sure, it payed off on the next trade; a short on the 3:40 pm red candle, yielding 49 cents per share. This was positive reinforcement and I continued looking for more reversals instead of going long on the "momo train." On my final trade, I went short at 3:51 and, liking the position, I doubled up on it. The reversal never came and I lost all my gains (about$1.30 per share). As good as I felt yesterday, I feel equally lousy right now. I ignored the proper, higher percentage trade of riding with strong momentum and took the riskier approach to fade it. Old patterns die hard. This is why I have not moved to my real-money account. I don't have the mental discipline yet to make the appropriate plays.

I am carrying a large short-position into tomorrow. I am reasonably confident about fading the strong, upward end-of-day move. In other words, I'm sticking to my guns that it will reverse into tomorrow's open, based on the huge volume traded in one direction during the last 15 minutes of the day. My average cost basis is $63.35 per share; the ETF is now trading at $63.81 and has been as low as $63.56 thus far in the after-hours session. I will count this trade in tomorrow's tally. Rest assured, if this trade ends positive as I expect it will, it is still not how I want to conduct business. I am training to be a day-trader not a swing-trader. I don't want to get in the habit of holding an ultra-short ETF overnight.

Without considering my open position in SKF, I ended today up 20 cents ... pretty disappointing considering the action that took place in the final 20-30 minutes of the day.

Focus, focus, focus is critical. I will eventually get it, I have faith.

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ADDENDUM: SKF is now trading as low as $63.07 at 6:35 pm. After further review of my trades today, I noticed that on my six double positions for the day, I was 5 for 6 with a gain of $2.55 per share. I was surprised and pleased at this result; I didn't notice it initially. I have been trying to get in the habit of adding to winning positions when conditions warrant. (as mentioned above, I am counting my present open position tomorrow when I expect to close it, not on todays tally)

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16 for 26, a 61.5% win rate. Gain of 20 cents per share.