"A man is not finished when he is defeated. He is finished when he quits."

Saturday, May 21, 2011

What I've been up to...




It has been a while since my last post, though I have been just as busy and attentive to learning the art & science of trading as when I was actively blogging. I have been faithful to not averaging a better entry price by adding to a losing trade. I have been struggling to faithfully obey my stops as well as having trouble learning to trust the technical patterns I have discovered in the past month; these are my primary mental challenges.



On the technical side, I am working out the details on an edge in the market which I believe will work. I am confident that once I have established and practiced my edge, my psychological difficulty of not trusting technical patterns will alleviate itself. Setting and obeying stops will no doubt be my last struggle.





I have had fairly negative results on my practice trades as I try to work the bugs out of my method. On range days, I still see good results but on trend days, I still get slaughtered. There is no mystery to me why. I know my shortcomings. I have to try to beat them as time passes.






UPDATE AS OF NOVEMBER 2011: It has been a long time since posting the following couple paragraghs below. Every so often I think of writing this "Mea Culpa" about how short-sighted I was in recommending John Kurisko's daytradingradio so strongly. It is true that I had a minor epiphany after watching his videos and sitting in on his radio/webcast every day for a couple months. I even became a paying member of his site for about a month. I got a great eye-opening as to the importance of trend-lines and the idea of improved odds of success when multiple indicators line up in favor of a trade. My understanding of market movement and momentum has really taken off since this discovery earlier this year. However, what I soon discovered about day trading radio and John's approach is that his exit formula on bad or faltering trades drastically lacks the discipline and sharpness of his entry formula. If you were to go to his site and review his success record this year, you'll see what I mean. BIG LOSSES when the market turned down. As a swing trader who sort of "wing's it" on his stops and exits, he posted some big draw-downs in comparison to his wins when the market reversed this past summer. Do I think he is good trader now? Yes, I do. And his openness and honesty, and his integrity is laudable. He is a profitable trader, but one whose method is not one I wish to emulate.
So, in appreciation of keeping it real, I am leaving up my post below which highlighted his site and method. But this preface should suffice to let you know how I think about it now.


If you are interested in learning how I diagrammed the GS chart posted here, go to http://daytradingradio.com/ and you will finally know much of the technical aspects of what every successful trend trader knows. I was a listener to John Kurisko (Day Trader Rock Star, his radio moniker) when I first became interested in day trading... it was early 2008 and I just happened to come across his vids on youtube. I was intrigued right away, mainly because I liked his story. (he was a young postal employee in search of a better life for himself. He blew up his trading account twice before achieving success on his third try.) Admittedly, I moved on after a few months when he shifted from all free to a pay sight and because of my restlessness with swing-trading. It is important to note that he is primarily a swing trader though he does day-trade the ES and a few stocks now and then. It is notable that his swing-trading concepts transfer to day trading quite well. I worked my way back to him in January of this year when I had more time to sit with the market after the sale of my business. It was a revelation! Although I had seen his entire method before, it finally made sense to me where it didn't 3 years ago; my experience brought me to understand his concepts and the importance of what he was teaching. In full disclosure, I am a subscriber to his website now. I am not being compensated for any of what I am writing. I don't participate in his chatroom because I find it hugely distracting. I have to admit that his mixing of music in with the broadcast can be a bit distracting, though that is his schtick... he's a former pirate radio guy. And when you run your site as a radio show, you have to fill every second. I actually like the ES pit feed from the CME in Chicago.



His method helped me to finally understand what I have seen Scott Farnham do for the two years I've followed him. I can't say for sure if it will have the same affect on you, but give it a try. It costs nothing to watch the videos... they are completely free. And he usually runs them in a continuous loop on Saturday and Sunday though for some reason he isn't today. The vids are on his site... just look for the Video tab on the top of the homepage (link posted above). I recommend you start at the video shown on the youtube link below, and you'll get the idea. This one is fairly new and offered in High Def for better viewing- his older vids are not... : http://www.youtube.com/watch?v=AlVV01aIxdg&feature=player_embedded

Friday, April 29, 2011

I thought this was wickedly funny...

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


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

Thursday, April 28, 2011

The past week






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

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


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