Self destruction

Its usually one trade that tears my day apart and sends me down the road of despair. I traded the open the way I was supposed to by catching early momentum off of TUP mostly. I always have the thought to just call it a day after taking some early profits, but today with the Dow down nearly 200 early on I decided to keep trading and swing for the fences.

I reached a major point of frustration mid day and decided to pop into some LVS seeing that it was near its low of day. Price ripped against my tiny position and my profits for the day were gone just like that- POOF!

The rest of the day has been trying to pull out .25, but getting stopped out for .10 over and over again. Now I am down a fair amount and have already traded 13,700 shares.

The commissions are another thing that gets at my mentally. The commissions keep piling up hour after hour and steadily eats into my profit and really hurts me after I am down.

Today has been another grind, but I have continued to learn about myself. I trade well at the open and should steer clear of the market during mid day. I am going to go read a book till noon.

Random Thoughts

These past few days have really been MAJOR GRINDING SESSIONS. It's very similar to going to play poker knowing that you will be folding hands for 8 hours. I put trades on then scratch them. I'd say that about 1/3 of my trades are scratches. This wears on my mentally and a bit physically. I repeatedly have expectations that are not met leading to frustration and exhaustion.

One positive is that I have finally gotten rid of my secondary watch list. This was the list of high flying stocks (LVS, CMI, PCP, DE, RIG, POT, etc.) that would take my attn away from the focus list and cause me to miss opportunities. They also led me to losses the majority of time. Its kind of a relief not to have these up anymore.

Another positive that I have taken note of is how quickly I am able to get out of losers. It is done with little to no hesitation. My mentor talked about controlled losses the other day and I totally agree with him. As long as individual losses are controlled then a trader can stay in the game and not have unplanned losses drag on his/her psyche and performance.

One of the metrics that I need to start tracking is time in a position. I'm pretty sure that most of my winners come from holds that last less than a few minutes. I'll check on that and post my findings.

300!!!

I have been raised to 300 shares! With the added size comes many more options and challenges. Profit potential has definitely been raised and downside risk as well.

Stocks I traded included Textron (beat earnings and raised full year guidance), Parker Hannifin (beat earnings and raised guidance), PKG (beat earnings Wed. afternoon and was a pick from the mentor).

TXT gapped up and chopped around pretty much all day. Had a couple early scalps and scratches on it.


PH dumped on me real fast near the open (I entered at 77.17 and the bottom just fell out). Shoulda stayed with it.


Packaging Corp. of America dropped down hard and fast at the open. I was able to get short at 31.10 and covered about .40 later.



Had another rough day as I was jumping all over the place and trading anything that looked like it would break a round dollar price level. My mentor even commented on it, which brought me back on track.

The stocks we start our days with really do move and I just have to trust that they will move and position myself to catch those moves.

Some performance goals for tomorrow-

* Focus on only 3 stocks

* Enter without hesitation. Go long above opening print and short below.

* Exit quickly if the stock does not move in my anticipated direction.

* If I am in a position with full size (300 shares) and it moves 1 point in my direction I will exit 1/2 of the position and hold the rest until the 20ema gets broken or stock breaks even.

An important thing that my mentor discussed in lecture today was the fact that our losses should be controlled losses. It's the losses that are out of our control where we exit in total panic that wears us down and makes us second guess ourselves on the next trade. We need to always be cautious while in a position and an exit is always an option. Controlling losses is our best defense.

CRUSHED!!!

The title pretty much says it all. I had a total loss of focus within the first few minutes and it snowballed into a streak of several losses until I could no longer take the pain anymore and called it quits.

The lack of focus started with the priority watchlist, which consisted of the following:

ATI (lowered guidance yesterday afternoon, gapped down ~10%)

AKS (I thought this was a competitor, but was only indirect. Direct ones are CRS, X, NUE, MT, PKX)

HDB (pre-announced a higher earnings number than current estimates)







Those are some damn pretty openings. I got chopped around in ATI at the open and jumped to stocks on my secondary watchlist like MA, NYX, POT, and CMI. These all resulted in losses or tiny gains. I was pretty much out of control for maybe an hour.

I need to figure out a way to get myself focused again after a string of losses. Going back to the breathing exercises would have been good.

Gross P/L: -285.00
Net P/L: -329.00
# Shares Traded: 4400
Stocks Traded: AKS, ATI, MA, POT, NYX, CMI

More Patience Required

Gross P/L: $196.00
Net P/L: $178.00
# Shares Traded: 1800
Stocks Traded: WGO (earnings), RIG (momentum oil stock), SAY (competitor of INFY, which reported today), DVN (momentum oil stock), MA (major momentum stock)

I was able to catch some nice point level breaks both on the long and short side today. The opening momentum trade was on WGO this morning as they reported earnings and I quickly caught a .60 move. Entry was damn good- WGO opened at 32.00 and I got filled at 31.96.

Once they increase my size I will be able to scale out more easily and catch bigger moves like this one on WGO:


SAY was a competitor of INFY (which reported earnings). I guess everything was factored into the gap down.


RIG chopped me around before making its move up and out. I have to be more careful on stocks with no fundy news and let them build their morning ranges.


Took a short on MA when it broke down the 168 level. The move didn't have any real strength to it, so I took half off at 167.09 and then at 166.51 when it really fell down.


My tape reading skills are still pretty bad. The information is just a little too fast for me. I'm not sure that I want to trade in this manner. But I will keep trying.

I really need to be more patient and go back to my chart trading ways. I gotta utilize the 20ema on those 2-min. charts to catch moves that follow through. PATIENCE, PATIENCE, PATIENCE!!!

My mentor told us about one of his star traders who clears 150k shares a day and who can manage 25+ positions at once. Supposedly the guy averages 10k per day (His profits were about 8500 for this particular day, which our mentor went through with us). Simply amazing.

Building Consistency

Gross P/L: +121.00
Net P/L: +113.00
# Shares Traded: 800
Stocks Traded: SGR (earnings report), URS (competitor of SGR)

Today was a repeat of yesterday- stuck with my market open trading plan and was rewarded.

Entries were a little off. URS opened at 60.90 and I was only able to get in at 61.20. SGR opened at 67.11 and I entered short at 66.26 (entry made at 6:33:40) after the bottom had fallen out of the stock. Now looking back at the tape I see that the 67 level was taken out at 6:32:40.





Earnings season is here again! Suhweet!!! Tomorrow I will FOCUS on 2 stocks again and work for better entries/exits.

Sticking to Your Plan Pays Off

Gross P/L: $100.00
Net P/L: $90.00
# Shares Traded: 1600

Today was the first day that I stuck to my plan (trade the opening momentum in stocks with major fundamental news and keep profits by not trading during mid-day). It was amazingly hard since the FOMC minutes were released in the afternoon and I wanted to trade off of it so bad.

My goal will be to continue finding stocks with major fundy news, enter above or below open price, and to catch a move away from the opening price.

Here are my two main trades from today AGU and POT (both competitors of MOS, which released positive earnings this AM). I was able to catch a point in AGU. POT took a couple of trades to get the direction right (what a monster...this bad boy ran for 7 points!!!).




Pretty happy with my first triple digit (gross) profit day. HAHA...Not too long and i'll be hitting my first 4 digit day!!!

From Loss to Profit Back to Loss

This morning I started out by watching R, CNW, and OMG. R guided lower for Q3 and FY07 and was down about 6% in pre-market trading (CNW was a competitor). OMG bought out another company for $265 million, which is a pretty large % of its market cap ($1.7B).

My first trade of the day was a short in CNW (open price $46.25). I got filled at $45.95 and proceeded to bounce around and stopped me out just above the $46 level. Fear got the best of me in this trade, since price never went above the open for the rest of the session. I find it very difficult to stay objective while in a trade. I get caught up in every tick back and forth and I get emotionally involved. This leads to exits out of fear rather than price areas where I know I am wrong. CNW proceeded downwards the whole morning.


My worst trade yet took place in OMG. I was caught up in my CNW short and entered OMG as it ramped up at the open (open price was $55.70 and my long entry was at $56.01). I took my attention away for a sec and OMG took a nose dive. Price was at $55.40 before I could get it together and exit at the market. I had flashbacks of the "deer in the headlights" moments from past trading sessions that really freaked me out.

Then right after my exit, price proceeded back up a point past the open price, which I was unable to get in since OMG had "hurt" me.


After mentally gathering myself, I put on a short in R as it slid from its opening price. I was lucky enough to catch a point before exiting.


The overall markets were sliding, so I scanned my momentum stock list for possible shorts. I caught POT as it was breaking the 105 price level and rode it down for 1 point.



The afternoon was spent churning and giving back profits plus a little more. I was extremely frustrated today just as I was on Friday. I keep thinking that my job as a trader requires me to contstantly be trading. This defies my rule against trading when you don't have an edge, which will be the mass majority of the time.

Tomorrow I will continue to focus on finding stocks with major fundamental news, catching the early move on these stocks, and taking my exits when they are given to me. I will also make it a point to sit on my hands and wait out the rest of the session, so that I don't churn my account and give back all my profits.

Churn Churn Churn

This morning I woke up refreshed and ready to trade. My main goals were to focus on a very select list of 3 stocks and to look for intitial momentum away from the opening price. I accomplished this goal by choosing CXW (they had signed a new contract with the state of CA to build a new prison facility), HOT (i was looking for continued momentum off of MAR's earnings in the previous session), and LVS (always a good mover at the open, no news though).

My initial trade came 34 seconds into the session after seeing CXW tick above its open of $26.10. Price stayed above the open and moved into the .60's where I decided to try and get a limit exit. It kept going higher so I canceled my order for a partial sell and thats when price started to pull back. I felt like I was forced to sell at the market and got filled at $26.48. Here's a chart of CXW-



That trade started the day off alright. I felt that I had executed correctly (at least on the entry) and that I had something to work on, which was to be quicker on exiting.

I was also watching HOT (yesterday I had missed a move in it because I didn't have the patience to wait it out). It opened at 60.00 and ramped up, but quickly retreated so I shorted. Not soon after price moved above the open, so I closed out the position. I repeatedly traded HOT around the opening price several times until it made its move up and out (10 roundtrips total). Here's a chart of the first 2.5 hours of trading in HOT:



I struggled again with sticking to my watchlist and hopped around watching the usual mo-mo NYSE stocks. Most of the day was spent trying to catch breakouts or breakdowns from major dollar price levels (Ex. $76 level in ACH). Here are some examples:



Trading in this fashion really doesn't present an edge. There's not really a way to tell if the move will carry through or not. Trading this way caused me to churn my account bigtime as I hit 5,500 shares (thats a ton of trades since I'm only trading 100 shares at a time). And also brought about my first losing day.

Here is the battle plan for Monday-

1. Focus on 4 stocks with major fundamental news.

2. Work on quickly identifying movement away from opening price.

3. Exit at either $0.50 or $1.00 increments for the time being. I have to make sure profits are taken when they are presented to me.

Day 2

Today I continued my winning streak and also doubled my take from yesterday. A whopping $73.00!

Profit, though, was not my ultimate goal. My goals in this session were to familiarize myself with the software, focus on a few stocks on my quoteboard, and continue learning to read the tape. Overall it was a good experience, especially to finish the day with a 2.5 hour review with my mentor and the team.

I am getting used to Esignal's quoteboard with all of its colored flashes that indicate trades at the bid or ask and also different colors for high of day and low of day. Tomorrow I plan to limit the quoteboard to 3 stocks, so that I can focus more on them at the open. Today I had too stocks up, which made following any individual stock very difficult. This led me to continue watching the charts to get a sense of direction and thus late entries.

Today's watch list (given out by my mentor) included hotel stocks since MAR reported (OEH, CHH, HOT) and automotive parts companies since ARM lowered guidance (TRW, ETN).

Here are some charts:




As you can see most of them flip flopped around before choosing a direction and making a nice move. Some of the stocks would take some time to get going and I started getting impatient and would lose track of them. My mind tended to jump to LVS, MA, PCP, POT, GS, BSC, LDK, etc. This caused major over trading (2900 shares) with each trade only being 100 shares.

Tomorrow I will continue focusing on my original watchlist stocks till they move. I may get chopped around quite a bit, but through good fundamental research and stock picking the stocks on my list should generate momentum away from the opening price.

Chatting with my mentor during the trading day and seeing patiently catch moves that I missed really helped to solidify the fact that I have to be patient and let the setups come to me. I can't jump from stock to stock hoping to catch some action. I have to be the sniper.

Back In Action

Today is my first day of "live" trading with the prop firm that I joined. The past week has been spent getting ready for today (getting software set up, reading up on tape reading, attending lectures by my mentor, etc.).

It's been pretty intense since the trading style is very different from my own. Our team trades stocks with MAJOR fundamental news that will guarantee movement at the open. Tape reading is used to determine movement and where our entries and exits will be.

My mentor says that "90% of a successful trade comes from finding the right stocks to trade and 10% from applying the method." This is also very different from my 15/30 min. chart consolidation breakout trading style. I like to apply my "method" to almost every stock that meets the parameters and not really searching for the stocks beforehand. Also, I used to wait 30-45 minutes before placing a trade to stay away from the wildness at the open, but this is where my mentor thrives.

It's been a lot of work going through time and sales records of several movers at the open, but I am slowly starting to see progress. In lecture, it takes my mentor 20-30 minutes to go through less than 5 minutes of actual tape (bid/ask records and sale prints). Seeing it in real time is just totally wild.

I am excited about learning the new strategy since it will give me weapons to trade at the open and then I can revert back to 15/30 min gap consolidations to trade from 7am till market close.

Strengths today: identifying areas of support and resistance from the tape

Weaknesses today: hesitation to enter/exit trades, errors in entering orders (went long instead of short)

Some short term goals that I have are to:

Optimize screen real estate

Get a feel for when a stock can be held longer instead of getting scared out

Work on familiarity with inputting orders (market, limit, stop market)

Made a few trades on LVS this afternoon which helped me finish my first day in the green.