April 29th

I was able to take a couple hours to watch the markets, and found a couple opportunities to paper-trade. Four trades, three for winners. All four long on SKF. I'd really like to stay in for the closing but there is simply too much to do outside the stock market. My day-job appointment postponed until Friday leaving the day available for projects/chores here at home. Life requires balance and today, my bro-in-law and I are preparing a bigger herb and vegetable garden for Mrs. Blue Collar. Also on the list: replacing burned out flourescent lights in the garage so the old ones can go to the upcoming annual recycling day in my town, lawn tractor fluids and filters, thinning the "forest" around my house with the chain saw before the truly hot weather rolls in, lawn treatments, etc... The list is too long to go on. Here's the rub: if I could make decent money trading, I could pay people to do most of what I must do myself! To make decent money, I must practice the craft of trading. But I can't spend all my time practice-trading because I must do the projects!

Maybe I can squeeze in some time to wash and wax my Harley, Ha! That would be the only fun thing on the list.

I'm happy for my gain today, small as it is.

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3 for 4 winners, 75% success rate. Gain of 38 cents.

April 28th

I made it to the computer to paper-trade about 2:45 pm after my day-job ended. I was scalping small moves in lieu of letting something develop longer-term. I put together a few small gainers and a couple small losses before taking a short on SKF at 3:38 after a substantial amount of the EOD run-up had taken place. This appeared to be a breakdown in the making, but I was wrong, it was a small pullback. Then came a big green candle (3-min chart). Thanks to my newfound attention to S & R, I saw a resistance point at around 61.24, so I shorted again as the price moved toward it. With volume climbing to the fourth highest of any 3-min candle all day and a substantial diversion from the mean (10 sma), I sensed the reversal would come at the resistance point and shorted a third position right there. Then, I waited to see if my breakdown would come. At 15:49, I covered into the reversal move, for a gain on the whole trade; two of the three positions which made up the trade yielded winners. The resistance held very well and SKF stayed choppy in this range through the close and into after-hours (presently 5:00pm).

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7 for 10, a 70% win rate. Gain of 53 cents per share.

April 27th Re-Discovery

After a rough few days of paper-trading, I have made some adjustments. Back to the 3-minute charts after about 4 days of 5-min charting, and a re discovery of the importance of support and resistance. For nearly three months I have ignored S. and R. in favor of focus on Volume and Diversion from the Mean. Today, I started charting S. and R. and there before my eyes was the reason why I once charted it and why everyone else does it as well. A missing piece of the puzzle was found and I began to see the correlation of large volume spikes, maximum diversions from the mean, and support and resistance.

I still was caught in chop while trying to focus on so much information as compared to the bare-bones simplicity I had been trading. But, this added piece of information is going to be helpful, I believe. I now have to figure out what weight to give the three indicators in relation to one-another to achieve my best results. It is still possible to suffer the same problems with the added information. I had some early success today but for small gains, going 8 for my first 11 trades for a gain of 37 cents per share. Then, as has been the case lately, I got into a choppy phase in GS and was stopped out 3 straight times for hefty losses compared to the gains I had taken earlier. I played for a continuation of the down turn and to my dismay, it reversed. I was slow on the exit and the eventual reversal to the long play. I must learn to execute faster and avoid the bad entries that slow responses inevitably give a trader.

At this point of the day in GS where I made these 3 losses, lies a good example of the importance of Support in making a decision on a stock's direction. On a 3-min chart, the 1:18 pm candle is the second big red candle in a down-draft on GS. Note also the substantial relative volume of theat candle. Further, note that it is within 6 cents of the support line from the close and open prices of the 10:15 and 10:18 candles respectively. And, to go along with that, see the large diversion from the mean (10 day simple moving average) that the candle registers for a low price; approx. 84 cents, a nice push from the average for a mid-day move. The reversal did take place in the next (1:21pm) candle. While the down move did continue after that, it went only 18 more cents lower on un-impressive volume. The 1:18 candle with all it's supporting indicators, was a nice exit point. It later is identified as very near the mid-day low, which took place at 1:51 pm. In hindsight, I see all the indicators of a high-probability reversal. I did not heed the indicators and that is why I took big losses on the three GS trades I mentioned earlier.

From there, I managed to finish the day 7 winners out of the next 12 paper-trades, taking extra note of the importance of support and resistance areas in where the SKF and GS prices were reversing or breaking away with force.

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15 for 26, a 58% win rate. Gain of 28 cents per share.