Welcome to my journey on the road to hopefully kaizen (continuous improvement) with trading. I have traded the markets on and off for over 23 years (since I was 16).
After reading many books and especially Tom DeMarks books I became convinced of a few things about trading.
1. Most people try to find a trend and trade it. Along with that most people lose money in the markets. So you either need to find the right trend and early or you better be able to find the end of the trend.
2. Most market makers / specialists fade the public / professionals. Along with that most MMs / specialists make huge amounts of money. trend followers have to be very quick to take losses and be able to stay in when the trend is going their way.
3. when you enter a trade by following a trend you normally give up the spread as well as take away liquidity. This causes you to be at a loss from the start and causes you to pay a higher commission (ECN pass throughs )
4. By fading you can actually collect the spread (usually very small but over the course of a year or more will add up) and you can lower your cost of trades if you use IB or someone that gives you ECN passthoughs( I have used before and will be changing over in about a week from TS to IB for my primary broker)
so what i try to do is find overbought or oversold situations and then 'fade' the stock or find the points in a trend where the stock is signaling it will continue further. I use software (currently Tradestation) that scans the market (preselected group of about 900 stocks) with algorithms that I have worked on and off for the last six years and dedicated about the last year or so on. When they started working consistently I thought I would make a journal to improve my results by looking for patterns.
I prefer shorting more than going long so my first push was for overbought signals and now i started working on oversold. I will need to test them for a while before you see very many trades that are long.
I trade intraday as well as swing trade. I am willing to buy and/or sell options to get into a trade and/or to hedge a trade.
I also like to sell EFPs to gain extra 'interest' income with the overnight balances.
Because as of the start of the post IBs commissions are so small I have not gone with a prop firm. I have averaged about 15 cents per hundred shares net cost(.0015/share)
My swing trades I will post in real time in the journal. My intraday trades I post as calls and in near real time in the ET chat.
Of course the calls and the posting is all based on my ability to do so without effecting my trading.
I think the ET chat room is a hidden treasure with a great bunch of very knowledgeable guys.
I use ARCA for my listed trades and Island (smart on IB) for the naz stocks. I do not jump in or out of trades with both feet. I almost always pick an area of entry and exit resulting in scaling into and out of most trades.
For leverage i rarely use it unless I am in several trades at once.
Keeping the powder dry for the swing trades as we watch the following for a complete of the trend.
I did manage to do some day trading today. I also was able to close out yesterdays carryover at a profit. (SPN)
Out of the five day trades only one really gave me any trouble. HK acted very strange and closed at 26.39 only to be trading in the 25 price range within mins after the close. (earnings report came out and it appears the street didnt like it)
+1282 for the day
+1848 for the week
+ 3787 for the month
+ 42751 for the year