Friday was interesting. Over my testing period I logged no losing days and this was my first...but with real money so I lost...$11 over three trades.
Trade one was not bad but I exited too soon for 38 cents. I don't mind exiting early at this point, I am still learning and better to exit positive early than turn it into a loss by holding.
Trade two was just plain wrong and I see now why I placed it and why I should not have placed it. I was losing the focus that I was working so hard on. My mental state was ready to place a trade to just be in. I had missed the key entry point and watched as the price dropped figuring to let it go until the next setup...I actually went short after a large move without real confirmation. Then, once in and seeing it was not a good trade I told myself to go for a breakeven and mentally called the exit but did not place the order and it would have been a very small profit...instead I rode it to a 30 cent loss.
Trade three was a non-loser...if you can count 11 cents a gain. I called it wrong, went long and held past the only peak. Once again I mentally called it as I would have while faking but held to see if I could squeeze more out of it.
So down $11 for the day. I stil met my daily average goal as I only traded three days and hit 3.6% but I would have liked to have cleared my weekly goal. I almost called it a day after trade one and would have. Got to listen to my gut.
Interestingly, had I been trading 200 shares instead of 100 it would have been an up day, if only by $8. Basically I gained but then lost due to the commissions.
Also worth noting, I am planning on trading 200 share lots after next week but had I been trading them all along I would be at 9% return so far. I will give myself one more week before bumping that up though. I need a little more confidence in my method.
The end result of the week has me learning more, which is the whole point right now.
Go with the gut for the exits
Don't try to "squeeze" anything, there is no control, only reaction
Trust the entries
I may start using market orders for the next week. I am finding that the tight limit order is just a little too restrictive as I make the call, place the order then do some juggling to get it filled. The trouble is that once I see a setup I wait for some confirmation and sometimes that includes a price move which puts me chasing the price a bit. I do not like to chase prices, better to have placed a market order if the spread is small.
Hmmm... maybe just limit orders with a wider price margin. A market is prone to getting a poor fill so at least a limit will keep me from getting tagged way out of the inside prices.
JD.
Questrade, My direct access discount broker.
Sunday, September 7, 2008
Thursday trading...and non-trading
I am doing a bit of catching up as I was busy last week...short week and all.
On Thursday I only managed one trade due to work constraints...part of the arrangement I have means that some things take priority.
Having said that I wonder how long I will need to work...seriously. Sure, today's "take" was only $69 but it still surpassed my daily goal as that is a 1.73% gain. I missed out on 4 other trades that would have (yes I say would have) amounted to another $200 plus. I had the trading platform running and jotted down the trade entries and exits, I just knew that I could not make the trades as I might have to leave it or just exit at a not so great moment. Them's are the breaks.
Given the movement that DID occur in all the missed trades I COULD have placed the darned things and let a VTSO take the ride for me. I will have to investigate that option for future. Here are the missed trades using conservative entries and trigger happy exits...just for fun, they might have been more if I had been on the button but i will never know:
10:44h short either in at $55.60 OR $55.00 to $54.20 for minimum $80
10:56h long $54.40 to $55.20 for $80
11:12h short $55.20 to $54.20 for $100
11:59h long $54.52 to $54.80 for $28
Grand total of $240 net
I don't want to start tracking missed opportunities but this one really stood out. I feel that missed opportunities are good for learning by seeing what may have happened and why the trades were not made.
JD.
On Thursday I only managed one trade due to work constraints...part of the arrangement I have means that some things take priority.
Having said that I wonder how long I will need to work...seriously. Sure, today's "take" was only $69 but it still surpassed my daily goal as that is a 1.73% gain. I missed out on 4 other trades that would have (yes I say would have) amounted to another $200 plus. I had the trading platform running and jotted down the trade entries and exits, I just knew that I could not make the trades as I might have to leave it or just exit at a not so great moment. Them's are the breaks.
Given the movement that DID occur in all the missed trades I COULD have placed the darned things and let a VTSO take the ride for me. I will have to investigate that option for future. Here are the missed trades using conservative entries and trigger happy exits...just for fun, they might have been more if I had been on the button but i will never know:
10:44h short either in at $55.60 OR $55.00 to $54.20 for minimum $80
10:56h long $54.40 to $55.20 for $80
11:12h short $55.20 to $54.20 for $100
11:59h long $54.52 to $54.80 for $28
Grand total of $240 net
I don't want to start tracking missed opportunities but this one really stood out. I feel that missed opportunities are good for learning by seeing what may have happened and why the trades were not made.
JD.
Wednesday, September 3, 2008
Daily real update, AEM daytrade
Today I placed my first cash trade since starting my day trading trial with AEM about three weeks ago. In my fake portfolio I got a little over 23% return for the 14 trading days. I consider that a very good return as it is a 1.64% daily return based on $5,000 starting capital. 1% per day is a good return as well and is my initial goal.
Here is most of the chart for today, the part that has the good trading moves anyway.
The lower pivot points were the important ones today. top red line is R1, the light blue is the primary pivot point then green are S1, 2, and 3 in descending order. The price barely broke above the PP, then bounced briefly off the S1, broke cleanly through S2, bounced off of S3 then hovered about the S2. Real nice trading moves and most of them occured before noon. The price did make it back up to S1 for about a minute right near the end of the day before dropping nearer to the S2 at the close.
I placed two shorts near the start, 1006h and 1023h for 22 cents and 44 cents per share gains, small moves but I was anticipating the drop that ended up happening so I was considering those intra-day positioning trades. I actually placed a short right at the 1030h mark where the nice consolidation was coming to an apex and the price just broke out to the downside nicely...perfect entry and would have grabbed the 80 cent drop. What happened was the connection to the ECN dropped at the broker and my short never got through...it was a limit so it would not have gotten executed at all by the time that the connectin was back up. I was really ticked and had to take 10 minutes to cool down in order to not trade under the influence of negative emotions.
The thing that I was most concerned about was, had the order been received and executed and the price jumped up I would not have been able to close the trade so the downside might have been a loss that I had no control over. I would rather a missed trade than a missed exit, at least missing the trade is a break even proposition.
Once the price bounced off of the green S1 support line I lost confidence in the down trend. I never got back in until the very bottom turned on the S3 line so I entered a long for a 51 cent per share gain. The price of gold was coming up by this point so it was a fairly high probability trade supported by the Global index that I use as well.
All in all not a bad day, 2.18% portfolio return even considering the missed opportunities.
Worth noting. Seeing as my portfolio is down to about $4,000 after all of my testing and goofing around I have restarted with $4K as my initial working capital. The $1000 loss is far less than the commissions incurred during the last 7 months, so I can't complain...especially as I blew $300 just trying out market orders to determine how fast they would get executed at the very start of the market. I'll restart the side bar stats soon as well.
Also worth noting, even though fake trading this as if I had money on the line it is always different when the money is actually there. A couple of times a hesitated when I shouldn't have, but there will always be other trades so once I realized my mistkae I did not jump ahead in. Take a breath and check to see that the indicators are all still good THEN make the trade. This difference will pass as I get ore trades under my belt.
Jeff.
Here is most of the chart for today, the part that has the good trading moves anyway.
The lower pivot points were the important ones today. top red line is R1, the light blue is the primary pivot point then green are S1, 2, and 3 in descending order. The price barely broke above the PP, then bounced briefly off the S1, broke cleanly through S2, bounced off of S3 then hovered about the S2. Real nice trading moves and most of them occured before noon. The price did make it back up to S1 for about a minute right near the end of the day before dropping nearer to the S2 at the close.
I placed two shorts near the start, 1006h and 1023h for 22 cents and 44 cents per share gains, small moves but I was anticipating the drop that ended up happening so I was considering those intra-day positioning trades. I actually placed a short right at the 1030h mark where the nice consolidation was coming to an apex and the price just broke out to the downside nicely...perfect entry and would have grabbed the 80 cent drop. What happened was the connection to the ECN dropped at the broker and my short never got through...it was a limit so it would not have gotten executed at all by the time that the connectin was back up. I was really ticked and had to take 10 minutes to cool down in order to not trade under the influence of negative emotions.
The thing that I was most concerned about was, had the order been received and executed and the price jumped up I would not have been able to close the trade so the downside might have been a loss that I had no control over. I would rather a missed trade than a missed exit, at least missing the trade is a break even proposition.
Once the price bounced off of the green S1 support line I lost confidence in the down trend. I never got back in until the very bottom turned on the S3 line so I entered a long for a 51 cent per share gain. The price of gold was coming up by this point so it was a fairly high probability trade supported by the Global index that I use as well.
All in all not a bad day, 2.18% portfolio return even considering the missed opportunities.
Worth noting. Seeing as my portfolio is down to about $4,000 after all of my testing and goofing around I have restarted with $4K as my initial working capital. The $1000 loss is far less than the commissions incurred during the last 7 months, so I can't complain...especially as I blew $300 just trying out market orders to determine how fast they would get executed at the very start of the market. I'll restart the side bar stats soon as well.
Also worth noting, even though fake trading this as if I had money on the line it is always different when the money is actually there. A couple of times a hesitated when I shouldn't have, but there will always be other trades so once I realized my mistkae I did not jump ahead in. Take a breath and check to see that the indicators are all still good THEN make the trade. This difference will pass as I get ore trades under my belt.
Jeff.
Thursday, August 28, 2008
Updating the stats column...an optomistic projection?
I was just updating the stats column. I stopped entering them early this month and my previous goal had been 24.45% return after 16 weeks for the CTP plan. That was 1.5% weekly compounded monthly which doubles the capital about every year.
I am 13 days into the day trading plan, no real goal as I am testing right now, but I am at 21%...that's almost 6 times faster than my previous plan goal.
So, for arguments sake I ran a one year spreadsheet using 6% return per five trading day period, and running 40 weeks or 200 days. This is lower than my current by a fair margin as three weeks at the current rate would put me over 25%, so 18% for the same period. I did not compound the return but at the point where the portfolio increases by $5K I roll that back into a second lot for trading purposes...effectively doubling my dollar return at the same percentage return. With 12 weeks buffer, (I like that, 3 months potential holiday), I could add a few weeks if the returns are lower to get to the same point in a calender year.
By the end of the year I will be:
trading 6 lots
profiting $1800 per week
have a portfolio value of about $35,000
Have used little to no margin
I figure that if, (yes I do say if as it is possible for this to not work as planned), I get to the point of trading 6 lots a few things may have to happen.
I will need to...
1- switch to a more expensive stock to keep the lot sizes down for liquidity purposes
2- get more efficient at entry and exits to be able to move the larger trade sizes
3- have more than one stock to trade to take advantage of the lower beta periods of one stock
4- have 2 stocks trading simultaneously to boost my dollar returns and keep liquidity
(only one can trade at a time so a stock that is not in sync would be best)
Crap, if I use margin and I stopped increasing the trade size when it hit $60K (my $30K and $30K margin...keeping in mind that margin in my account is 3x, this is only 2x use) I would end up with $3000 per week and a portfolio balance of $85,500...based on 5% per week instead of 6%...A small fudge factor. That is $3000 per week.
So, dreaming big here for a moment...if I use these numbers and set an income replacement goal of $1000 per week before taxes and left everything else in play I could easily stop working after one year (the soonest I would) then I would be re-investing $2000 per week after the one year. That's living off of $40K and re-investing $80K...I'd balance those a bit depending on needs.
BAH! Got to keep thinking small here for now. No sense in getting grand ideas while I am still a fledging trader here as that is just begging for a huge ego bubble burst and setting me up to get emotional about the trades.
Back on track here, as I have started to track my returns based on a percentage of the daily beta captured I should be able to use this to calculate roughly what I might expect from any other stock. That makes a few assumptions about the stock being as predictable as what I am used to so there may be a paper trading trial time...or not....
JD.
I am 13 days into the day trading plan, no real goal as I am testing right now, but I am at 21%...that's almost 6 times faster than my previous plan goal.
So, for arguments sake I ran a one year spreadsheet using 6% return per five trading day period, and running 40 weeks or 200 days. This is lower than my current by a fair margin as three weeks at the current rate would put me over 25%, so 18% for the same period. I did not compound the return but at the point where the portfolio increases by $5K I roll that back into a second lot for trading purposes...effectively doubling my dollar return at the same percentage return. With 12 weeks buffer, (I like that, 3 months potential holiday), I could add a few weeks if the returns are lower to get to the same point in a calender year.
By the end of the year I will be:
trading 6 lots
profiting $1800 per week
have a portfolio value of about $35,000
Have used little to no margin
I figure that if, (yes I do say if as it is possible for this to not work as planned), I get to the point of trading 6 lots a few things may have to happen.
I will need to...
1- switch to a more expensive stock to keep the lot sizes down for liquidity purposes
2- get more efficient at entry and exits to be able to move the larger trade sizes
3- have more than one stock to trade to take advantage of the lower beta periods of one stock
4- have 2 stocks trading simultaneously to boost my dollar returns and keep liquidity
(only one can trade at a time so a stock that is not in sync would be best)
Crap, if I use margin and I stopped increasing the trade size when it hit $60K (my $30K and $30K margin...keeping in mind that margin in my account is 3x, this is only 2x use) I would end up with $3000 per week and a portfolio balance of $85,500...based on 5% per week instead of 6%...A small fudge factor. That is $3000 per week.
So, dreaming big here for a moment...if I use these numbers and set an income replacement goal of $1000 per week before taxes and left everything else in play I could easily stop working after one year (the soonest I would) then I would be re-investing $2000 per week after the one year. That's living off of $40K and re-investing $80K...I'd balance those a bit depending on needs.
BAH! Got to keep thinking small here for now. No sense in getting grand ideas while I am still a fledging trader here as that is just begging for a huge ego bubble burst and setting me up to get emotional about the trades.
Back on track here, as I have started to track my returns based on a percentage of the daily beta captured I should be able to use this to calculate roughly what I might expect from any other stock. That makes a few assumptions about the stock being as predictable as what I am used to so there may be a paper trading trial time...or not....
JD.
Daily update.
I was not going to do anything today but I caved and opened my trading software at about 0945h to take a peak. Too bad I didn't follow it from the start. It followed yesterdays pattern, gap up, push up then a quick pullback from the peak in the very next minute and right down over the course of the morning.
I made some notes before doing anything and wrote "expect a short bias today and a possible late rally with the low around the PP". So why the heck did I place a long as the first trade? ...dumb dumb dumb. lost 29cents per share by the time I decided to bail, largest single trade loss since starting this. Forget about possibly having shorted it instead but had I just not traded it, accounting for commissions it was a $39 drawdown. I almost didn't place another trade.
7 minutes later I was into the shorts for a profitable day, too bad about that stinking first trade though, I didn't let it get to me and considered not counting it...but for the sake of accuracy I couldn't fudge it.
4 trades, finished at about 1140ish. $67 net profit, 1.34% return.
Slightly below my average daily net of $84.15 return of 1.68%
Return to date for 13 trading days = 21.88% or $1094.00
Interesting stat, long : short ratio is 1.31:1, the imbalance is due mainly to the general uptrend on the daily chart since the 11th.
Of my 8 losing trades the short losers vs long losers ratio is 1.7:1. I almost expected it to be closer to the long:short ratio.
I made some notes before doing anything and wrote "expect a short bias today and a possible late rally with the low around the PP". So why the heck did I place a long as the first trade? ...dumb dumb dumb. lost 29cents per share by the time I decided to bail, largest single trade loss since starting this. Forget about possibly having shorted it instead but had I just not traded it, accounting for commissions it was a $39 drawdown. I almost didn't place another trade.
7 minutes later I was into the shorts for a profitable day, too bad about that stinking first trade though, I didn't let it get to me and considered not counting it...but for the sake of accuracy I couldn't fudge it.
4 trades, finished at about 1140ish. $67 net profit, 1.34% return.
Slightly below my average daily net of $84.15 return of 1.68%
Return to date for 13 trading days = 21.88% or $1094.00
Interesting stat, long : short ratio is 1.31:1, the imbalance is due mainly to the general uptrend on the daily chart since the 11th.
Of my 8 losing trades the short losers vs long losers ratio is 1.7:1. I almost expected it to be closer to the long:short ratio.
Wednesday, August 27, 2008
Daily update
I tried a speculative day today, a few trades that I would not normally do, some that I would have just to mix things up a bit. I figured that I would need to add a few trades to my numbers today as I figured I would just have more entries due to the playful nature of the day. Had I been actively trading seriously I might have skipped today altogether as it felt like another flat day and many small trades didn't feel like fun...which was the drive for the changeup.
So, 6 trades altogether. Had I been on the ball I would have entered long in the 2-5 minute area as the price came off of the reaction low after the initial gap...I was too stuck on my 20 minute minimum...so I went with that. I missed a $1.24 move which I would have nabbed about 70 cents of...but no trade. Instead I rode the followup roller coaster. I had half expected the price to be trending up after the strong move but the volume petered off and I was not really thinking this through. Anywhere above $61 would have been good short entry points right up to 1023h and holding for a $30 maximum loss allowance would have kept me in if I was looking for intra-day trend trading...but I'm not.
Trades 1 through 3 were not too exciting, between all three I lost $30 net. I gave the price time to settle into a trend, entered one too soon, the other just wrong and the last made a bit of profit.
Interestingly I set a short limit order for $61 at 1035 when I saw that spike in price...missed it by 2 cents...should have just done a market order and I would have been in for $60.95. The volume dropped off in the next few minutes which was a good sign to short soon as the price wallowed about under the trendline. I ended up getting in short at $60.80, rode it down to just below the R1 and exited at $60.38 as it hovered below $60.40 on really low volume... unpredictable. It rallied briefly up to $60.47 (note that R1 is $60.46) so I jumped in as it started to head down at $60.38, my exit price last trade...almost a shame not to have held it through the rally but I am not interested in trying to squeeze out every drop, just taking profits as they present themselves. Even so I should trust the pivot points a bit more and given this a little more headroom as it did not cross the line enough to worry about....hindsight. I exited at $60.10 as the price came off the low of $59.92.
The last trade, #6, was about the same as I watched the price approach the R1 line again and slow down it's upward movement...I jumped in sooner than I might normally except I recalled the R1 acting as resistance once already today...in at $60.31 out at $60.08. Had I been planning to trade for the day I would have re-entered around $60.10 and rode it down for another 30 cents. The rest I think may be a wash but I will not even be looking at the afternoon activity until after hours anyway.
Turned out the afternoon wouldn't have been bad to trade and add to the profits. The blue line is the primary pivot point from yesterdays numbers, the red is the first resistance level R1. R2 is off the chart a bit and first support S1 is below the chart.
Red boxes are the loosing trades and the green are the winning trades.
So, 6 trades altogether. Had I been on the ball I would have entered long in the 2-5 minute area as the price came off of the reaction low after the initial gap...I was too stuck on my 20 minute minimum...so I went with that. I missed a $1.24 move which I would have nabbed about 70 cents of...but no trade. Instead I rode the followup roller coaster. I had half expected the price to be trending up after the strong move but the volume petered off and I was not really thinking this through. Anywhere above $61 would have been good short entry points right up to 1023h and holding for a $30 maximum loss allowance would have kept me in if I was looking for intra-day trend trading...but I'm not.
Trades 1 through 3 were not too exciting, between all three I lost $30 net. I gave the price time to settle into a trend, entered one too soon, the other just wrong and the last made a bit of profit.
Interestingly I set a short limit order for $61 at 1035 when I saw that spike in price...missed it by 2 cents...should have just done a market order and I would have been in for $60.95. The volume dropped off in the next few minutes which was a good sign to short soon as the price wallowed about under the trendline. I ended up getting in short at $60.80, rode it down to just below the R1 and exited at $60.38 as it hovered below $60.40 on really low volume... unpredictable. It rallied briefly up to $60.47 (note that R1 is $60.46) so I jumped in as it started to head down at $60.38, my exit price last trade...almost a shame not to have held it through the rally but I am not interested in trying to squeeze out every drop, just taking profits as they present themselves. Even so I should trust the pivot points a bit more and given this a little more headroom as it did not cross the line enough to worry about....hindsight. I exited at $60.10 as the price came off the low of $59.92.
The last trade, #6, was about the same as I watched the price approach the R1 line again and slow down it's upward movement...I jumped in sooner than I might normally except I recalled the R1 acting as resistance once already today...in at $60.31 out at $60.08. Had I been planning to trade for the day I would have re-entered around $60.10 and rode it down for another 30 cents. The rest I think may be a wash but I will not even be looking at the afternoon activity until after hours anyway.
Turned out the afternoon wouldn't have been bad to trade and add to the profits. The blue line is the primary pivot point from yesterdays numbers, the red is the first resistance level R1. R2 is off the chart a bit and first support S1 is below the chart.
Red boxes are the loosing trades and the green are the winning trades.
Notice how the price reaches the PP and pretty much bounces along for a bit...depending on the volume and activity there were four points of entry down there and if I had gotten in low enough any one of them could have held for a long trade but that middle one and the last one would have been the most likely attempts...say one 20 cent trade in the middle as the rally failed then a 45 cent trade as the last.
OK, net profit $33...a lot of work for $33 but the stocl only changed 4 cents over the day. A very emotionless day, which is the goal. I am finding that speaking my observations out loud while watching the trades helps to keep me detached and objective.
Net P/L = $33, 0.66% return
Total just crossed $1000 to $1027 which is a 20.54% return. This was my unspoken target to hit to see how many days it would take...12 trading days.
total swing or Beta = $1.70
Captured beta = 54.7%
I had figured that the price was going to stay within the PP and R1 based on the premarket bids, I wasn't too far off as the price remained around that area once it settled down.
JD
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