I did no day trading today. I did sink all my capital, well, most of it anyway, into a bit of medium term trading.
I pulled some ideas from the past and mixed them with some new ideas and put four positions in play to see what would happen. This will give me some breathing room for some other studying that I want to do on longer term trading. I think that I need a perspective break from the daytrading right now, as much as I hate to miss some of the upcoming potential there will always be some level of potential for daytrading.
That and I think that I need to focus on some stock or sector ETF trading so I am looking in that direction with the longer term stuff. Seeing as longer term is really only a different timeframe this may give me some of the perspective that I look for.
I may still dabble but longer term trading takes, well, a longer time to see how it will work out so I am not sure when I may get back into what I see as my most enjoyable part of trading. Perhaps as I have cash on the sidelines I may pop in here and there as well as keeping up with some level of fake trading to be sure that the game does not change ahead of me too much.
Off for the weekend.
Jeff.
Questrade, My direct access discount broker.
Friday, June 19, 2009
Thursday, June 18, 2009
June 18, A break.
I'm taking a bit of a break from blogging all my activities for a bit. Too much stuff going on so I have to cut back on time spent on less productive activities for a bit.
I paid more attention to the last few days and how the trading ranges set up so I did a wee bit of range trading, which I either try to stay away from normally or I just trade for breakouts that never materialize. I traded one for a break out that failed but got close to break even and had two others that made a bit of profit. I see now how to better utilize the TICK. I think trying to concentrate on it as a trade trigger alone is asking for trouble anyway. It may work sometimes but trading should always have an edge, not just sometimes.
I am also trying something a bit different, actually it is a medium term trade idea. I have accumulated a list of stocks that are reasonably big players that I see other traders trading intraday or these are used to gauge market sentiment. Either way they are fairly common and reasonably fluid issues.
I plan on putting all of these stocks (McDonalds, Morgan Stanley, General Electric, Dupont, Johnson and Johnson, 3M, etc.) on a page in my Esignal software. I am working on a script to monitor these for certain significant milestones and trends in order to do some swing trading and sector rotational style trading, perhaps a bit of hedging as well.
It would be fairly easy to even scroll through these one by one to watch for certain patterns and price positioning as well. I have been only trading full lots due to a restriction in Questrade that would not allow me to place a part lot stop loss. I figured that, seeing as the stop loss was a market restriction altogether, I should try a partial lot stop loss in the NYSE...surprise surprise! I am able to stop loss partials.
Now I will be trading in my TFSA using part lots of various companies with appropriate stops in place for each. I may even let them trickle into my other accounts if I can keep enough capital free for daytrading...although even there I could use smaller position sizing as the main restriction I have been considering was having to use lots of 100 shares which can, in slumps or testing periods, draw my account down. Live and learn.
Today I bought McDonalds (MCD) due to the significant 200DMA test. It was not ideal but I wanted to place with an order setup and test the stop loss order entry. I placed a limit order lower than my eventual entry which I should have just left in play. Due to impatience I replaced it with a market order, only to see the price drop 20 cents shortly afterward. Unlike day trading a drop of 20 cents in a medium term trade means next to nothing as my stop loss is a full $1 away. I sort of wanted to be in the trade today even though I likely could have gotten a better price tomorrow.
Jeff.
I paid more attention to the last few days and how the trading ranges set up so I did a wee bit of range trading, which I either try to stay away from normally or I just trade for breakouts that never materialize. I traded one for a break out that failed but got close to break even and had two others that made a bit of profit. I see now how to better utilize the TICK. I think trying to concentrate on it as a trade trigger alone is asking for trouble anyway. It may work sometimes but trading should always have an edge, not just sometimes.
I am also trying something a bit different, actually it is a medium term trade idea. I have accumulated a list of stocks that are reasonably big players that I see other traders trading intraday or these are used to gauge market sentiment. Either way they are fairly common and reasonably fluid issues.
I plan on putting all of these stocks (McDonalds, Morgan Stanley, General Electric, Dupont, Johnson and Johnson, 3M, etc.) on a page in my Esignal software. I am working on a script to monitor these for certain significant milestones and trends in order to do some swing trading and sector rotational style trading, perhaps a bit of hedging as well.
It would be fairly easy to even scroll through these one by one to watch for certain patterns and price positioning as well. I have been only trading full lots due to a restriction in Questrade that would not allow me to place a part lot stop loss. I figured that, seeing as the stop loss was a market restriction altogether, I should try a partial lot stop loss in the NYSE...surprise surprise! I am able to stop loss partials.
Now I will be trading in my TFSA using part lots of various companies with appropriate stops in place for each. I may even let them trickle into my other accounts if I can keep enough capital free for daytrading...although even there I could use smaller position sizing as the main restriction I have been considering was having to use lots of 100 shares which can, in slumps or testing periods, draw my account down. Live and learn.
Today I bought McDonalds (MCD) due to the significant 200DMA test. It was not ideal but I wanted to place with an order setup and test the stop loss order entry. I placed a limit order lower than my eventual entry which I should have just left in play. Due to impatience I replaced it with a market order, only to see the price drop 20 cents shortly afterward. Unlike day trading a drop of 20 cents in a medium term trade means next to nothing as my stop loss is a full $1 away. I sort of wanted to be in the trade today even though I likely could have gotten a better price tomorrow.
Jeff.
Monday, June 15, 2009
June 15th, the followup
The chart pretty much says it all. I placed my stop at somewhere around 10cents under my entry, as I mentioned...I have a 20cent loss allowance on SDS, 15 gets used the most often and I end up moving it too soon sometimes as well.
Nice entry, the right price, read the support bang on and called the trend day. I failed the alternate entries due to the price not consolidating as long as I expected it to...in both cases I should have pulled the trigger once the price was within my stop allowance given where the stop needed to be placed. There were four entry opportunities and I saw three of them setup, so all is not lost as I learned a valuable lesson in chart readig and trade judgement.
There was an easy $1 per share trade here and, if I used both stop plans and entered twice $1.20 per share.
I am planning on setting my stops on the charts from now on and setting my entry price accordingly. If the TICK sets up and the price is right then the trade is made...I need to set some sort of SMA band once I determine that an SMA is the rough stop setting as today was...less 5 - 10 cents.
Jeff.
Monday, June 15...frustration sets in
There are days when I wonder if the frustration is worth it...today I vent.
Don't get me wrong, I enjoy trading, the analysis, the watching market activity.
When I have a bad day, I learn from the poor ideas to avoid certain setups. I learn better how to judge and move stop settings. I get just that little bit more comfortable with the whole plan and execution. I have been getting better at entries and not entering when I shouldn't. I feel OK about the fact that I had a down day.
Good days, they speak for themselves, who can feel down on a good day?
But there are days that are in between. I know that missing a move is expected and there is little chance of catching every move over the course of the day. As I do not trade for a living (far from it yet) and I do other work during the day, I have interruptions in trading. I work trading into my schedule as I can. This is a huge problem with respect to trading for a profit.
This leads to a day like today.
Last week was a range week and I watched and learned. I made some trades and lost some trades, noted how the volume affected Friday's trading and how the week slowed right down to that day.
Without getting into the whole analysis I was planning my trades around a drop in the market today below the low of last week. In that I was not disappointed.
To keep the story short I placed a trade with a too tight stop, I see that now and should have seen it at the time...lesson leaned. I watched as the price did not come back to the entry I wanted...I actually set it well but hesitation had me miss it. I tried twice more unsuccessfully, only due to other issues interfering with my attention on the charts. By the time I could concentrate I entered a trade against my TICK timing and at a point in the pattern where a reversal was at least as likely as a continuation.
I fell prey to the "trade for the sake of being in a trade" trap. Frustration at missing trade entries clouded my judgement.
I knew that the trade was likely to go against me but I "hoped" that I would be wrong (HUH?) and the trade would go in my favour.
So I hope that I learned this lesson...although this is a recurring theme in my trading, that I miss some of the best moving days, even though my plan is sound.
I am going to have some lunch and review my plan, my setups and my mindset for the day to see if I can make some decent trades in the afternoon.
Jeff.
Don't get me wrong, I enjoy trading, the analysis, the watching market activity.
When I have a bad day, I learn from the poor ideas to avoid certain setups. I learn better how to judge and move stop settings. I get just that little bit more comfortable with the whole plan and execution. I have been getting better at entries and not entering when I shouldn't. I feel OK about the fact that I had a down day.
Good days, they speak for themselves, who can feel down on a good day?
But there are days that are in between. I know that missing a move is expected and there is little chance of catching every move over the course of the day. As I do not trade for a living (far from it yet) and I do other work during the day, I have interruptions in trading. I work trading into my schedule as I can. This is a huge problem with respect to trading for a profit.
This leads to a day like today.
Last week was a range week and I watched and learned. I made some trades and lost some trades, noted how the volume affected Friday's trading and how the week slowed right down to that day.
Without getting into the whole analysis I was planning my trades around a drop in the market today below the low of last week. In that I was not disappointed.
To keep the story short I placed a trade with a too tight stop, I see that now and should have seen it at the time...lesson leaned. I watched as the price did not come back to the entry I wanted...I actually set it well but hesitation had me miss it. I tried twice more unsuccessfully, only due to other issues interfering with my attention on the charts. By the time I could concentrate I entered a trade against my TICK timing and at a point in the pattern where a reversal was at least as likely as a continuation.
I fell prey to the "trade for the sake of being in a trade" trap. Frustration at missing trade entries clouded my judgement.
I knew that the trade was likely to go against me but I "hoped" that I would be wrong (HUH?) and the trade would go in my favour.
So I hope that I learned this lesson...although this is a recurring theme in my trading, that I miss some of the best moving days, even though my plan is sound.
I am going to have some lunch and review my plan, my setups and my mindset for the day to see if I can make some decent trades in the afternoon.
Jeff.
Thursday, June 11, 2009
Trading Journal
I have hit upon a nice comfortable method and setup to do my trade journalling on paper now. As much as I like having the nice charts I don't think that they are going to be as much of a reference as I thought they might. I see that Esignal has expanded the historical archive of intraday data, or are in process, so I can always refer back to any trade based on my journal entry. I may print the odd one or still notate them and log them here as well if I think they will be important reference.
This feels like a transition for me as I start to really see the nuances and interaction of the markets. Touching on the topic of too much information, I now find that blog posts are mostly confirmations of things that I am already doing or am trying to do in my trading. I am still struggling witht he execution of the trades, getting in just right and setting stops according to where they really should be. It's getting there.
Today's trading was disappointing only in that I was unable to capture the moves that I wanted to catch and saw setting up. I missed one to hesitation, one to interruption, one to away at lunch and one to lack of confidence in my trade idea at the time. All learning points though.
Having said that, saying my trading was disappointing is a little misleading in that I only had one losing trade of the four that I placed. The disappointment was not being there on the longer rides. One trade in particular I moved my stop intentionally to capture the momentum move that had just occurred from my entry BUT had I left my stop just 5 cents lower I would have doubled my profits... no big deal as the plan was the plan.
All in all I think I did well enough to consider it a successful day and it could easily have been profitable given more action on my part.
Here is a decent trade for today that I could have rode farther but still came out ahead on. The stops I need to work on but if I chose to just exit at better than break even I would be doing better. I just would rather work on slightly longer term trades than the short, almost scalping style of trades. There is, ultimately more money in holding for the moves.
TICK chart:
This feels like a transition for me as I start to really see the nuances and interaction of the markets. Touching on the topic of too much information, I now find that blog posts are mostly confirmations of things that I am already doing or am trying to do in my trading. I am still struggling witht he execution of the trades, getting in just right and setting stops according to where they really should be. It's getting there.
Today's trading was disappointing only in that I was unable to capture the moves that I wanted to catch and saw setting up. I missed one to hesitation, one to interruption, one to away at lunch and one to lack of confidence in my trade idea at the time. All learning points though.
Having said that, saying my trading was disappointing is a little misleading in that I only had one losing trade of the four that I placed. The disappointment was not being there on the longer rides. One trade in particular I moved my stop intentionally to capture the momentum move that had just occurred from my entry BUT had I left my stop just 5 cents lower I would have doubled my profits... no big deal as the plan was the plan.
All in all I think I did well enough to consider it a successful day and it could easily have been profitable given more action on my part.
Here is a decent trade for today that I could have rode farther but still came out ahead on. The stops I need to work on but if I chose to just exit at better than break even I would be doing better. I just would rather work on slightly longer term trades than the short, almost scalping style of trades. There is, ultimately more money in holding for the moves.
TICK chart:
Chart for SPY for the same period:
This was a typical PP200 trade with a TICK timed entry. The only thing better would have been a launch off of the black previous day high at the same time. As it was all of the moving averages were converging and lending seeming support to the price activity. The volume picked up after I was out as the price crossed the high line. I didn't get back to actively watching the chart until after the nice climb to the top started enough that I was price chasing and would need to large a stop to feel comfortable.
Jeff.
Bloggers and Twitters overload
I am following a few, very few, bloggers and Twitters now. Even amoungst the few that I follow, in addition to a general twitter list for the market that I trade, I find a lot of regurgitation of posts and tweets. Sometimes it is not uncommon for one to be posted and three or four others will copy and paste...some with acknowledgements, some without. Some are more prolific at it than others... or maybe the word is blatant. It's fine to share information but there is so much overlap anymore that I find myself linking to articles and blog posts that I have already read, usually the original.
Maybe I should be linking all this stuff too?....Nah!
This makes finding original material hard to find and wastes time reading the tweet or blog that does the linking.
Oh, well. That's the internet for you.
Jeff.
Maybe I should be linking all this stuff too?....Nah!
This makes finding original material hard to find and wastes time reading the tweet or blog that does the linking.
Oh, well. That's the internet for you.
Jeff.
Tuesday, June 9, 2009
June 9th, Scratched the day
I am not working on honing my range trading skills, I am playing with my TICK entry to catch reasonable trending. I don't need day long trends to capture what I am looking for but it appears that low volume ranging is just different enough to throw off my trading ideas.
So in that light I decided to just watch and not even track any trades later in the day. I noticed how the TICK and SPY price danced and have more information that I did before the day started. I did try to do some back charting to see if I could fit some hindsight trades into the activity and even that was tough. The TICK did not range wide so the triggers were very tight. The spread between the average high and average low as down to less then 300 points. Triggers work best when they are farther apart.
I did note that during these times the moving averages could be used for entries based on the TICK, not in the same manner, just use the TICK as a reference for an extreme price move to get a lower entry. There were a few such trades that I saw set up but did nothing with...unfamiliarity.
Golf tomorrow so likely no trading at all. My luck the market will decide on a direction and have a large trending move day.
Jeff.
So in that light I decided to just watch and not even track any trades later in the day. I noticed how the TICK and SPY price danced and have more information that I did before the day started. I did try to do some back charting to see if I could fit some hindsight trades into the activity and even that was tough. The TICK did not range wide so the triggers were very tight. The spread between the average high and average low as down to less then 300 points. Triggers work best when they are farther apart.
I did note that during these times the moving averages could be used for entries based on the TICK, not in the same manner, just use the TICK as a reference for an extreme price move to get a lower entry. There were a few such trades that I saw set up but did nothing with...unfamiliarity.
Golf tomorrow so likely no trading at all. My luck the market will decide on a direction and have a large trending move day.
Jeff.
Slow start to the day
Oscillation.
The TICK and SPX are oscillating about zero and all of the moving averages respectively.
Of course I would decide to trade on a slow starting day. Volume is on the low side of the last 10 day average for the period, there is no commitment, just a lot of wallowing.
First trade I left more room than I should have but I was not sure that the price was going to pullback, I broke even. Second trade I lost half of my loss allowance at the stop but my order was filled poorly losing me the other half plus some.
I will now wait it out and see which way the market moves as I will not knowingly try to trade such a tight range. At least not yet. I would like to see some directional activity.
Worth noting, my entries were at good points so at least I have got some of the hesitation out of the picture. This at least allows me to set my stops at good chart points rather than out in the breeze hoping for the best.
Jeff.
The TICK and SPX are oscillating about zero and all of the moving averages respectively.
Of course I would decide to trade on a slow starting day. Volume is on the low side of the last 10 day average for the period, there is no commitment, just a lot of wallowing.
First trade I left more room than I should have but I was not sure that the price was going to pullback, I broke even. Second trade I lost half of my loss allowance at the stop but my order was filled poorly losing me the other half plus some.
I will now wait it out and see which way the market moves as I will not knowingly try to trade such a tight range. At least not yet. I would like to see some directional activity.
Worth noting, my entries were at good points so at least I have got some of the hesitation out of the picture. This at least allows me to set my stops at good chart points rather than out in the breeze hoping for the best.
Jeff.
Monday, June 8, 2009
Monday June 8th, play testing again.
Today was a day to play. I decided to not trade, I resisted for all but one trade and I timed it just plain wrong.
I broke the charts into AM and PM for clarity as I may refer to these later, seeing as this is a journal of sorts, and I would like to be able to see more of the detail.
First is the TICK for the AM with the green trade setup arrows and the black trade arrows. From the top are the SDS trades and from the bottom are the SPY trades...I decided to stick with SPY rather than SSO for a variety of reasons.
Any setup arrow not followed by a black trade arrow means that the trade was determined not a good entry due to chart indicators, upcoming resistance, pivot points, 200sma, already in a trade and a variety of others.
I broke the charts into AM and PM for clarity as I may refer to these later, seeing as this is a journal of sorts, and I would like to be able to see more of the detail.
First is the TICK for the AM with the green trade setup arrows and the black trade arrows. From the top are the SDS trades and from the bottom are the SPY trades...I decided to stick with SPY rather than SSO for a variety of reasons.
Any setup arrow not followed by a black trade arrow means that the trade was determined not a good entry due to chart indicators, upcoming resistance, pivot points, 200sma, already in a trade and a variety of others.
Here is the chart for SPY. Note that the first setup arrow without a trade was while in a trade already. I probably would not have entered here as the price was approaching the 200sma as potential resistance. The second was basically the same situation. Not a high probability entry
SDS chart for the AM.
The green lines indicating the stop adjustments are placed real time, as much as they appear to be set to match the price activity after the fact, they are not.
The afternoon TICK chart. Notice how it gets rather hairy in the late afternoon. It is good to be in a trade before this goes nuts as trying to pick an entry is tough when the volume spikes.
SPY in the PM. With better stop management I could have stayed in the first trade for the whole period but I got a little close and stopped out. I considered getting a real trade on the last one but I decided to stick to my plan as it could have easily gone against me...even though most of today's trades went positive.
I am always concerned when my play testing works out so well and the wind rate, let alone the win value, is so high. I know I use the same ideas that I might while trading live but I think that I let the stops go wider longer than when I trade for real. This gets me stopped out too soon on runners and at a loss sometimes when it turns right afterwards. Most of today's play trades were 20 cents on SPY and 15 cents on SDS for initial stop settings.
I'll work out the numbers on these later.
Jeff.
Casino play
I spent some time at a casino on the weekend...too much time actually, but that is a whole other story. My wife kept insisting that I go and play figuring that it was "my thing". I tried the slots, no fun there. I would sooner just play a decent video game that had some user interface other than a play button. So I checked out the card tables, craps, roulette and baccara. Cards were the draw. I played some War (and old high low card game that I used to play as a kid just for fun) and found that the odds were definitely not in my favour...it wouldn't be there if there was a decent chance for a player to win anyway. Even though I zeroed out it was fun and I played for some time in the green.
Someone asked me what I thought a good gambler was, they were joking but I figured a good gambler left with a smile on their face no matter if they won or lost. Of course that implies that they were playing with money that they did not need, just like in trading. In gambling, the game is the fun, winning is a bonus, that is were gambling and trading differ, one of the points anyway.
This gave me pause to reconsider where I am in trading. Am I enjoying the game too much? Should I be leaving it alone? I decided to follow trades today rather than actually placing them, use the quotes for entry prices, move my stops on the charts, watch the patterns and levels and see where I would be on a fake trade basis in real time again. Of course, at this point, I decided to place one real trade in the middle and I picked the wrong one to do that with, small loss, so I stayed out for the rest. That one trade actually didn't really follow my rules that I am using for the faking...go figure. This is a day to review these rules closely and watch the results so I can get them on some sort of written reference card.
What I noticed at the casino was that I played with a similar outlook as I have when I am trading. I am aware of my loss allowance, I know when I am up or down, I have a target that I would take profits off if I were ahead and I will walk away at a certain point.
No, I am not going to try to figure out a method to make money gambling at cards... I may return to play another time but certainly not in the near future.
Meanwhile I am tracking today's activity and moving my chart stops along the way. I am reminded of the number of times I say, "in order to trade someone else's system you have to make every trade and be able to observe their loss allowances", and what not. Today I think of those times and I realize that I need to apply them to my trading system...loosely calling what I am doing a system for now, more just a method. I need to follow it for each and every trade as trying to cherry pick a trade or three does not stack the odds in my favour. I seem to have a knack for picking the wrong ones, or just not actually following my method and entering at the wrong time. I shoot myself in the foot, so to speak.
So, the rest of the week, when I can trade, I will be following what my plan is.
I'll post today's charts later.
Jeff.
Someone asked me what I thought a good gambler was, they were joking but I figured a good gambler left with a smile on their face no matter if they won or lost. Of course that implies that they were playing with money that they did not need, just like in trading. In gambling, the game is the fun, winning is a bonus, that is were gambling and trading differ, one of the points anyway.
This gave me pause to reconsider where I am in trading. Am I enjoying the game too much? Should I be leaving it alone? I decided to follow trades today rather than actually placing them, use the quotes for entry prices, move my stops on the charts, watch the patterns and levels and see where I would be on a fake trade basis in real time again. Of course, at this point, I decided to place one real trade in the middle and I picked the wrong one to do that with, small loss, so I stayed out for the rest. That one trade actually didn't really follow my rules that I am using for the faking...go figure. This is a day to review these rules closely and watch the results so I can get them on some sort of written reference card.
What I noticed at the casino was that I played with a similar outlook as I have when I am trading. I am aware of my loss allowance, I know when I am up or down, I have a target that I would take profits off if I were ahead and I will walk away at a certain point.
No, I am not going to try to figure out a method to make money gambling at cards... I may return to play another time but certainly not in the near future.
Meanwhile I am tracking today's activity and moving my chart stops along the way. I am reminded of the number of times I say, "in order to trade someone else's system you have to make every trade and be able to observe their loss allowances", and what not. Today I think of those times and I realize that I need to apply them to my trading system...loosely calling what I am doing a system for now, more just a method. I need to follow it for each and every trade as trying to cherry pick a trade or three does not stack the odds in my favour. I seem to have a knack for picking the wrong ones, or just not actually following my method and entering at the wrong time. I shoot myself in the foot, so to speak.
So, the rest of the week, when I can trade, I will be following what my plan is.
I'll post today's charts later.
Jeff.
Friday, June 5, 2009
More Friday stuff.
I made one more trade near the end of the day...I did not realize it was so late or I might not have made the trade as I don't like having to stop late day trades as wide as they need. This was no exception, although I never looked at the time until into the trade was about to stop out...I had creeped the stop up slowly from the start as I felt wrong after entering the trade...I should have felt wrong BEFORE the trade. 4 minutes after stopping I saw the move start that I was looking for. It pulled back then continued on...the second pullback would not have hit my stop and the move ended up being a 40 cent run up in SDS. Would have seen 30 cents of it with tight EOD stops.
No charts today. I am cycling today so I like to get going as soon after work as I can.
Things learned today:
1) I can trade reversions
2) Don't try trading when on the phone
3) If it didn't work earlier, don't expect it to work later
#3 was funny, as I entered 4 cents higher than an earlier trade and stopped 3 cents higher. It may as well been the exact same trade as the price even jumped shortly after my trade in both cases. They were setup around the previous day low and close prices as resistance in SDS.
I will be going back over the day and setting trades according to strict entry and stop rules to see what kind of strategy would have worked and applying those rules to similar day setups in future. I know this smacks a little of curve fitting but if the curve fits ...why not wear it until it doesn't?
Jeff.
No charts today. I am cycling today so I like to get going as soon after work as I can.
Things learned today:
1) I can trade reversions
2) Don't try trading when on the phone
3) If it didn't work earlier, don't expect it to work later
#3 was funny, as I entered 4 cents higher than an earlier trade and stopped 3 cents higher. It may as well been the exact same trade as the price even jumped shortly after my trade in both cases. They were setup around the previous day low and close prices as resistance in SDS.
I will be going back over the day and setting trades according to strict entry and stop rules to see what kind of strategy would have worked and applying those rules to similar day setups in future. I know this smacks a little of curve fitting but if the curve fits ...why not wear it until it doesn't?
Jeff.
Friday, June 5th
I may be done trading for the day. Period volume is in the upper range today and the market is not moving around all that much, volatility is down. Actually it looks like volume is slowing down near the lunch hour but still in the middle of the last ten day average.
I have had a busy morning on the phones but I tried to do some trading in between, not the best of plans. I need to have some almost mechanical entry guidelines when I am trading under those circumstances. The first trade was OK, made a few bucks playing the counter trend or reversion with a tight stop...completely against the TICK timing as there were other factors lining up and I was feeling cheeky.
Next two trades had a too tight stop, missed the move as a result, and a wrong entry.
I think I will go for an early (for me) lunch and perhaps see what sets up this afternoon. Market is ranging right ow around the VWAP and there are some decent small target setups as a result but I often get burned playing those as I want to play for the breakout that, more often than not, does not appear.
I do see that mechanical trading this morning would have worked out not bad so I think that I will revisit my rulebook and get these TICK trade setups nailed down tighter.
I'll see if there is anything worthy of charting later today.
Jeff.
I have had a busy morning on the phones but I tried to do some trading in between, not the best of plans. I need to have some almost mechanical entry guidelines when I am trading under those circumstances. The first trade was OK, made a few bucks playing the counter trend or reversion with a tight stop...completely against the TICK timing as there were other factors lining up and I was feeling cheeky.
Next two trades had a too tight stop, missed the move as a result, and a wrong entry.
I think I will go for an early (for me) lunch and perhaps see what sets up this afternoon. Market is ranging right ow around the VWAP and there are some decent small target setups as a result but I often get burned playing those as I want to play for the breakout that, more often than not, does not appear.
I do see that mechanical trading this morning would have worked out not bad so I think that I will revisit my rulebook and get these TICK trade setups nailed down tighter.
I'll see if there is anything worthy of charting later today.
Jeff.
Thursday, June 4, 2009
June 4th
Not much to say today. Sort of a lazy uptrend with a range start and finish, so I don't think this really counts as a trend day. I stayed out of the SSO trades as I was expecting either a range or small move day as the volume was on the lower than average side all day until the EOD rush.
Note that the bars are closing in the bottom of the range.
Although the TICK could have been used for some upside trades I decided to not trade SSO as the moves were going to be rather small so my 100 share lots would hardly break even on a decent move. The upside was smaller than the downside so this was a test of my resolve to watch for downmoves. I hit one good trade and two small losers, one was a too tight stop issue as the idea was sound and the expected move was good. The wrong was really a speculative play for a reversion trade that did not materialize...then I called it quits for short (SDS) trades. I could use larger position sizing but I want to stick with 100 shares for a while yet.
I could have played other ETFs, specifically SPY for the upside moves but I was trying to avoid the downspikes that SPY exhibits. I expected that those would take out a stop. I see that may not be the case as if they did there would be a sudden huge runup of price as market orders were executed as other stops were also taken out at the spiked price...and I survived an SDS spike. Perhaps I do not completely understand what the spike represents. I recall getting caught and creating my own huge down spike on an old trade where I lost a fair chunk of change because of the spike. I think that the spike represents an anomolous fill and does not affect the bid/ask quote therefore the stop does not get triggered. I will rethink my staying away from SPY as a result.
I'll have to consider position sizing and price values when looking at SPY again in my risk management as I need to be playing both the up and down side of the market. SSO may still be a better play with 200 shares.
Jeff.
Note that the bars are closing in the bottom of the range.
Although the TICK could have been used for some upside trades I decided to not trade SSO as the moves were going to be rather small so my 100 share lots would hardly break even on a decent move. The upside was smaller than the downside so this was a test of my resolve to watch for downmoves. I hit one good trade and two small losers, one was a too tight stop issue as the idea was sound and the expected move was good. The wrong was really a speculative play for a reversion trade that did not materialize...then I called it quits for short (SDS) trades. I could use larger position sizing but I want to stick with 100 shares for a while yet.
I could have played other ETFs, specifically SPY for the upside moves but I was trying to avoid the downspikes that SPY exhibits. I expected that those would take out a stop. I see that may not be the case as if they did there would be a sudden huge runup of price as market orders were executed as other stops were also taken out at the spiked price...and I survived an SDS spike. Perhaps I do not completely understand what the spike represents. I recall getting caught and creating my own huge down spike on an old trade where I lost a fair chunk of change because of the spike. I think that the spike represents an anomolous fill and does not affect the bid/ask quote therefore the stop does not get triggered. I will rethink my staying away from SPY as a result.
I'll have to consider position sizing and price values when looking at SPY again in my risk management as I need to be playing both the up and down side of the market. SSO may still be a better play with 200 shares.
Jeff.
Wednesday, June 3, 2009
June 3rd, levels and whatnot
I see others setting out price levels for the S&P 500 ETF SPY, the futures and other market indicators for public consumption. I have seen them and usually don't use them as they are not mine. Some of the pivots and various levels are from "proprietary" algorithms and methods...whatever works for me is what I go by and I need to know that I do not have to rely on someone else to supply my information...who knows when they may stop putting it out there?
Yesterday I placed important price points in SSO in my journal to see what stuck. I use simple Previous Day high and low, pre and post market ranges and perhaps some important and plainly obvious resistance or support levels from the previous day. Occasionally I will go back and see what might be important from a month or even a year ago but I have not really set those in writing for easy reference so far.
So, for yesterday's "trading" I had PD high of $27.81 and low of $26.80 and the pre and post range was $27.20 to $27.55.
Interestingly my SSO entries were from $27.52 to $27.65 and the exits were all $27.80 or $27.70. So the range that I was able to trade was the pre and post market high to the PD high.
I did not write down SDS levels but the ranging was inversely similar.
Today I only managed to squeeze in two trades. I planned on no SSO trades (long the S&P) as I expected a down day overall and perhaps even a trend.
SDS levels were marked but the only important ones were the premarket range, $53.47 to $54.00. Trading started in this range and passed the $54 early and never looked back...yet. I entered a trade at $54.11 but was stopped out early with very small profit as I was too anxious for a profit and not 100% sure of the coming move.
Second trade was just after 1000h at $54.45, I missed the pullback by keeping my stop at $54.30 then ratcheted it up to $54.67 before getting stopped out...impatience again.
Then lunch hit...or at least the pre-lunch hanging about that often happens which basically keeps me from actually placing trades. I did not get to look at the market again until about 1400h, the trend had trended and looked to be whipped as the days volume was petering off a bit. I did mark the entries at the beginning...the setup was at 1143h and the first of four primary triggers were from 1146h to 1206h. Given that I had already tried two trades in SDS it is more than fair to say that I would have placed more trades along the same plan.
Here is the SDS chart for the morning activity leading into the afternoon:
Assuming an entry on the high side of those red arrows...when I may have over ridden my plan and gone back to the PP200 style entry given the establishing trend and entered even better...there was a decent 60 cent climb using the 50sma (less 5 - 10 cents) as a stop and the R3 as the final resting place.
I am still ahead today regardless, though not a whole lot.
Jeff.
Yesterday I placed important price points in SSO in my journal to see what stuck. I use simple Previous Day high and low, pre and post market ranges and perhaps some important and plainly obvious resistance or support levels from the previous day. Occasionally I will go back and see what might be important from a month or even a year ago but I have not really set those in writing for easy reference so far.
So, for yesterday's "trading" I had PD high of $27.81 and low of $26.80 and the pre and post range was $27.20 to $27.55.
Interestingly my SSO entries were from $27.52 to $27.65 and the exits were all $27.80 or $27.70. So the range that I was able to trade was the pre and post market high to the PD high.
I did not write down SDS levels but the ranging was inversely similar.
Today I only managed to squeeze in two trades. I planned on no SSO trades (long the S&P) as I expected a down day overall and perhaps even a trend.
SDS levels were marked but the only important ones were the premarket range, $53.47 to $54.00. Trading started in this range and passed the $54 early and never looked back...yet. I entered a trade at $54.11 but was stopped out early with very small profit as I was too anxious for a profit and not 100% sure of the coming move.
Second trade was just after 1000h at $54.45, I missed the pullback by keeping my stop at $54.30 then ratcheted it up to $54.67 before getting stopped out...impatience again.
Then lunch hit...or at least the pre-lunch hanging about that often happens which basically keeps me from actually placing trades. I did not get to look at the market again until about 1400h, the trend had trended and looked to be whipped as the days volume was petering off a bit. I did mark the entries at the beginning...the setup was at 1143h and the first of four primary triggers were from 1146h to 1206h. Given that I had already tried two trades in SDS it is more than fair to say that I would have placed more trades along the same plan.
Here is the SDS chart for the morning activity leading into the afternoon:
Assuming an entry on the high side of those red arrows...when I may have over ridden my plan and gone back to the PP200 style entry given the establishing trend and entered even better...there was a decent 60 cent climb using the 50sma (less 5 - 10 cents) as a stop and the R3 as the final resting place.
I am still ahead today regardless, though not a whole lot.
Jeff.
Relative period volume
I revisited the chart that I posted a while ago looking at the relative volume of each 1/2 hour period over the course of the day...including the first 1/2 hour of post market activity. I was trying to come up with a method of being able to compare each period with previous day periods. I did not come up with anything terribly easy so I went back to over simplification.
Here I plotted the 30 minute simple moving average of the close which would basically track the high of each bar directly as if it were a line chart of the high points. Then I offset yesterdays' ahead by 14 periods which overlays yesterdays' onto today...easy comparison this way. I then went to town and created 10 SMAs and offset each by an additional 14 periods...effectively this creates a cascade of SMAs overlaying today's volume representing the last 10 trading days general average.
Here I plotted the 30 minute simple moving average of the close which would basically track the high of each bar directly as if it were a line chart of the high points. Then I offset yesterdays' ahead by 14 periods which overlays yesterdays' onto today...easy comparison this way. I then went to town and created 10 SMAs and offset each by an additional 14 periods...effectively this creates a cascade of SMAs overlaying today's volume representing the last 10 trading days general average.
I considered, and started colour coding the averages so I could tell how far back each one came from...then I decided that it is not necessary. I may grey scale them to fade them into the past so the more current ones are darker and likely more relevant. I do have to remember that the averages are of the close, or high of each bar so the fact that the bars are hanging in the breeze below the lines has no bearing, only the top of the bar is important. I could run averages using H/L/C data and put the lines in the middle of the bars...naw.
It is worth noting that Friday's volume was low over the course of the day, remained low into the close then skyrocketed past all ten days values in the aftermarket. Most regular traders do not trade in the aftermarket so I expect that was the large institutionals and fund managers getting their positions in or out for the month end weekend. Toady's volume was shooting right up the middle of the range.
This is just another piece of information to judge the trading day activity as it has no direct bearing on trades other than to justify a bias. Range trading if volume is lower than average or watch for trend breaks if volume is higher...generally speaking.
Jeff.
Tuesday, June 2, 2009
June 2nd...non-trading trading
Today I could not actively trade but I was able to follow along to see what would have been nice entries.
There were a total of 9 trades that I may have taken. A few more setup according to the TICK entries but were not good due to the price location, market situation and gut feeling...yes, the gut still plays a part, a smaller part than it used to though.
As I start to type this entry I see a final setup in the last 20 minutes of trading that I would like to trade, but prudence tells me to stay clear. The EOD volume is not as high as normal so I SHOULD be able to get in well and get out safely...but it is the end of the day afterall.
Actually, the day has been low volume overall. seeing as this is a consolidation after yesterday's runup I think that this bodes well for the bears. Personally I don't really care which way it goes as I would just like to be able to profit from the moves, trending or slow range bound are looking like the best for me right now to practise in.
Here is the TICK chart: setups are green arrows and trade triggers are black.
There were a total of 9 trades that I may have taken. A few more setup according to the TICK entries but were not good due to the price location, market situation and gut feeling...yes, the gut still plays a part, a smaller part than it used to though.
As I start to type this entry I see a final setup in the last 20 minutes of trading that I would like to trade, but prudence tells me to stay clear. The EOD volume is not as high as normal so I SHOULD be able to get in well and get out safely...but it is the end of the day afterall.
Actually, the day has been low volume overall. seeing as this is a consolidation after yesterday's runup I think that this bodes well for the bears. Personally I don't really care which way it goes as I would just like to be able to profit from the moves, trending or slow range bound are looking like the best for me right now to practise in.
Here is the TICK chart: setups are green arrows and trade triggers are black.
I checked the price entries based on the TICK spikes at the triggers and fudged about 2 cents or so against me and used tight stops due to the nature of the range trading today. The results are as follows:
SDS, 6 trades. 1 loser. $1.19 per share gained overall or 2.25% based on average price.
SSO, 3 trades. 0 losers. $0.42 per share gained overall or 1.56% based on average price.
So, single lots of both gross return of $162
Optimum position sizing of 200 SDS and 400 SSO would yeild $410
Fudging 30% against me puts the single lot return at $113 and optimum at $287.
Oh, commissions would be $90 and all these figures are in US dollars so I see a bit more at this time
I'll feel better when these are actual real trading results.
Jeff.
The average trader fails at trading...better than 80%
I just read an older post from Dr. Brett Steenbarger's blog site concerning the failure rate of average traders.
It boils down to what I have said all along, that a high number of traders fail. I have been using 93% as my benchmark, perhaps that may be a little high. It is nice to see that there is actually a study that did some decent number crunching to confirm this.
So, in Dr. Steenbarger's post he poses the question "So what keeps new traders coming to an arena in which far fewer than 20% of participants are profitable after costs?"
In answer he suggests that "...individual day traders may place too much confidence in their ability to read market patterns out of the gate."
OK. I consider myself confident enough in my ability to learn how to read and understand chart patterns, market forces and a host of other market variables in order to create an edge in my trading to end up producing profits to justify my time spent in this learning process. That is probably the key, spending the time studying. I did start out a little over confident and had a number of wake up trades, both large winners and large losers, to realize that it was not as easy as it looked.
I would suppose that I am a little farther than "out of the gate" now and, seeing that I have been trading for well over a year and have not blown my account up, I suppose I have demonstrated my ability to manage risk where I can be fairly confident in not blowing it up in future. I have have not firmly set myself in profit mode as I recognize that I still need some tweaking in my trade management. Once I can get things down and I see some consistency, which is slowly getting there now, then I will start to ramp things up and review my capitalization levels.
I know that I have gone off half cocked a few times in my blog about being there already, when I sit back and ponder my situation I usually see the light and pull my horns in a bit. Some of my previous plans would have worked out nicely but did not suit my style. They may be tweaked in future once I have a consistent trading base to work from.
Jeff.
It boils down to what I have said all along, that a high number of traders fail. I have been using 93% as my benchmark, perhaps that may be a little high. It is nice to see that there is actually a study that did some decent number crunching to confirm this.
So, in Dr. Steenbarger's post he poses the question "So what keeps new traders coming to an arena in which far fewer than 20% of participants are profitable after costs?"
In answer he suggests that "...individual day traders may place too much confidence in their ability to read market patterns out of the gate."
OK. I consider myself confident enough in my ability to learn how to read and understand chart patterns, market forces and a host of other market variables in order to create an edge in my trading to end up producing profits to justify my time spent in this learning process. That is probably the key, spending the time studying. I did start out a little over confident and had a number of wake up trades, both large winners and large losers, to realize that it was not as easy as it looked.
I would suppose that I am a little farther than "out of the gate" now and, seeing that I have been trading for well over a year and have not blown my account up, I suppose I have demonstrated my ability to manage risk where I can be fairly confident in not blowing it up in future. I have have not firmly set myself in profit mode as I recognize that I still need some tweaking in my trade management. Once I can get things down and I see some consistency, which is slowly getting there now, then I will start to ramp things up and review my capitalization levels.
I know that I have gone off half cocked a few times in my blog about being there already, when I sit back and ponder my situation I usually see the light and pull my horns in a bit. Some of my previous plans would have worked out nicely but did not suit my style. They may be tweaked in future once I have a consistent trading base to work from.
Jeff.
Monday, June 1, 2009
June 1st, new month, new outlook
Today was a day of learning.
That noon trade that I was monitoring got ahead of me, I left it ride and when I came back to it the price had climbing and pulled back steep enough that my stop was likely to get hit. I have learned in the past not to adjust a stop if the price is moving fast, especially on high volume, which this was. In modifying the stop the system cancels the first and reorders the second. I have had these rejected as the stop loss cannot be placed higher than the trading price. I have also had them get placed but the delay is large enough that the price just keeps going and I get a poor closing price. So I left it fro a very small profit.
Here is the TICK chart for the day.
Of these trades, 2 and 4 were not so great, small loss though. 6 was one of the more profitable of the day as I realised that I need to keep my stop tighter so I managed to snag the exit at the first pullback. I would not have tried for more as the 390VWMA was very close (the pinkish heavy line). i considered more momentum reversion style trades but decided I did not have earlier profits to play with.
Chart for SSO with it's three trades and stop lines.
Obviously missing that morning run up was a shame. #1 was a false start as I may have gotten in earlier or later for a better price so I ended up in #3 instead at the same price. Paying closer attention to #3 would have gained me another few cents at the end as I should have been up just below the 50 SMA and even tighter as the price approached the purple monthly R1. Same deal with #5. Leaving the prices alone too long before looking in on them is an issue today. I will be working on an automatic alert to let me know when a price is in jeopardy of turning based on the faster moving averages in the TICK...need some more research for that one. The entry alerts are doing well.
That noon trade that I was monitoring got ahead of me, I left it ride and when I came back to it the price had climbing and pulled back steep enough that my stop was likely to get hit. I have learned in the past not to adjust a stop if the price is moving fast, especially on high volume, which this was. In modifying the stop the system cancels the first and reorders the second. I have had these rejected as the stop loss cannot be placed higher than the trading price. I have also had them get placed but the delay is large enough that the price just keeps going and I get a poor closing price. So I left it fro a very small profit.
Here is the TICK chart for the day.
I know it is not the clearest in the worked but I decided to not break the day into AM / PM portions for time constraints. It is pretty clear that trades 2 through 6 were at least at the beginning of the TICK trend change. I need to work on my stops and my earlier entries as I get in a little later than I would like but my TICK timing at least doesn't get me nailed to the wall chasing a price and being way out of whack and getting whipsawed. Some of these trades were held for a longer period of time than my normal, which is a good sign all of it's own.
Chart for SDS and the three trades with the green stop lines.
Of these trades, 2 and 4 were not so great, small loss though. 6 was one of the more profitable of the day as I realised that I need to keep my stop tighter so I managed to snag the exit at the first pullback. I would not have tried for more as the 390VWMA was very close (the pinkish heavy line). i considered more momentum reversion style trades but decided I did not have earlier profits to play with.
Chart for SSO with it's three trades and stop lines.
Obviously missing that morning run up was a shame. #1 was a false start as I may have gotten in earlier or later for a better price so I ended up in #3 instead at the same price. Paying closer attention to #3 would have gained me another few cents at the end as I should have been up just below the 50 SMA and even tighter as the price approached the purple monthly R1. Same deal with #5. Leaving the prices alone too long before looking in on them is an issue today. I will be working on an automatic alert to let me know when a price is in jeopardy of turning based on the faster moving averages in the TICK...need some more research for that one. The entry alerts are doing well.All up I came out with about $13 and change profit.
Oh, new rule for me lately. I am not counting my commissions in my daily tallies as I do not want to get caught up in trying to break even based on them. I would rather work on having good trade ideas, good entries and exits and let the profits build. The commissions will look after themselves. I realise that they are a cost and must be considered so I do track them very closely in my overall P/L plan and data management, just not for trade dissection now.
For the record, commissions and SEC charges were a little over $60...so, yes, I am down approximately $47.
Jeff.
Nice morning
I decided to try to wait out the first 15 minutes of trading starting last week. Today that cost me a nice entry which cascaded to missing a few nice entries and left me scratching at the range area mid to late morning. Lots of learning as this tends to be my weak spot, but I would like a bit more profits to play with for my future learning...I guess I can't have it both ways.
I expect that I was not in the right trading mindset as the morning opened either. I had three people chattering at me right up to 0930h and on and off there after...not conducive to getting in the "zone" for sure.
Watching the open turn relatively strong on higher than average volume had me itching to jump in long, but I held. Trade the plan and all, I used the interruptions as excuses for not being in.
So I think I may have a new guide as it pertains to the open. I see that the TICK indication was strong to go long, there were a number of nice pullbacks in TICK that never reached the lower boundaries. I will note these on another post, I am just venting right now. The one low that did hit my target was a good entry on it's own, a little late but was still a 30+ cent move on SSO.
Lunch approaches and I see the TICK pattern heading down and I am in a long position in SSO hovering over my stop which I will not lower. I am sitting just under the 100VWMA which has typically been a good place to be and I usually miss it and get stopped before I can get under it...we'll see if it works today...this is my second try at a long SSO from the same price.
Ah, it is moving as I type and the TICK trend may be resuming up as well...I'll see where the next low reading appears and judge whether to advance my stop or not.
Jeff.
I expect that I was not in the right trading mindset as the morning opened either. I had three people chattering at me right up to 0930h and on and off there after...not conducive to getting in the "zone" for sure.
Watching the open turn relatively strong on higher than average volume had me itching to jump in long, but I held. Trade the plan and all, I used the interruptions as excuses for not being in.
So I think I may have a new guide as it pertains to the open. I see that the TICK indication was strong to go long, there were a number of nice pullbacks in TICK that never reached the lower boundaries. I will note these on another post, I am just venting right now. The one low that did hit my target was a good entry on it's own, a little late but was still a 30+ cent move on SSO.
Lunch approaches and I see the TICK pattern heading down and I am in a long position in SSO hovering over my stop which I will not lower. I am sitting just under the 100VWMA which has typically been a good place to be and I usually miss it and get stopped before I can get under it...we'll see if it works today...this is my second try at a long SSO from the same price.
Ah, it is moving as I type and the TICK trend may be resuming up as well...I'll see where the next low reading appears and judge whether to advance my stop or not.
Jeff.
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