I traded my first stock about 5 months ago, then focused on swing trades and options. I learned a ton via the school of hard knocks and hours of self-education and chart study. I paper traded some day trading strategies for 3 weeks or so and last week decided to actively day trade. I've been keeping a trading journal since April and will share my daily adventures in the hopes it will help keep me from doing something really stupid.
Comments from wise old traders are always welcome
July 25, 2008:
First trade of the day, nice retracement on SPWR (qty 1000) that rallied hugely for a $1230 gain in 15 minutes. A looser stop would’ve allowed a good added bit of profit, but SPWR has tended to pull back more than I normally like before continuing. An entry later in the day that was signaled went past my target rather quickly, but turned out it would have returned another $1000. However, I am pleased that I stuck with my rule of not chasing, as that’s been responsible for many losses in the past. I prefer the security of high probability and quick lock-in stop set at break even.
Second trade was a JNPR short. They gapped up on record earnings and hit new highs all morning. Shorted 1000 shares at 26.22 and covered at 25.97 for a $250 gain in 15 minutes.
Shorted JNPR again not long after the first one at 25.72 and it stalled for nearly half an hour, so I covered at 25.74 for a $20 loss.
Next, I shorted BIDU after watching its chart carefully. A gradual downtrend with mini rallies set the stage and I shorted 200 shares as the next rally began to stall (figured out what “fading the move” means) at 333.20 and set a target profit via limit order to cover at 332.20. BIDU moves in frightening chunks and just when it looked it might turn against me and cause me to cover at a very small profit, it triggered my limit within seconds for the full $200 target profit in just 4 minutes!
Shorted JNPR yet again at 26.17, and it stagnated for over half an hour. I set a stop at the day’s high and grabbed a bite to eat. This time it rallied out of consolidation and the stop triggered for a loss of $200. LESSON: Don’t trade a stock that’s consolidating just because you THINK you know where it will go based on what it did a while ago. Wait for the actual break in one direction or the other.
Rather than leave JNPR alone, I shorted once more at 26.44 when buying volume dwindled and selling pressure began. Could’ve scalped $50, but thought for sure it was pushing a bit lower, then with frightening speed a rally began, triggered by institutional purchases (10K and 20K lots appearing on the Level II). I should’ve exited on the spot for a tiny loss, but decided to give it a bit of time. A secondary rally ensued and I quickly placed a stop at 26.84 that triggered a $400 loss. I was very pleased with my ability to cut the loss quickly without thinking, analyzing, or hoping. I had no regrets afterward. LESSON: Exit quickly large blocks start printing against your trade.
(Turns out the JNPR short of the day occurred almost at market close when it topped 27.00 and failed to hold that new level. It pulled back to 26.57 in just minutes.)
Best of luck to you and I will watch your journal.
remember that its more important to not lose money than it is to make money when starting out. ( you wouldn't let your 15 yr old drive a nascar car in a real race before they had a drivers license and trading isn't as easy or boring....LOL)
1R, in reviewing my day I am very pleased to have not lost money, and have tossed aside my regrets about missing CLF's second entry, as it could just as easily have dropped back to 98
July 28:
Wanted to climb CLF this morning since they were trading on their lower end; used 1-min chart and got 1000 shares at 98.92 after a nice retracement off the low. Did not enter a stop, because this is CLF, always volatile in the early a.m. and did not want to be shaken out. Dipped to 97.36 and then did a real retracement. Set a stop once profitable and got stopped out 5 mins from entry at 99.13 as it pulled back. Made a mental note to re-enter if a pullback to 98 retraced. Pullback to 98.40 retraced and I missed it because I was investigating my other charts plus the hi/lo ticker. Once I noticed CLF again it was above 100 and I decided it was too high to go long at that point, leaving $4/share on the table. It's easy to know that in retrospect!
Mid-morning, V was looking good as it failed to make a new low. Got in a bit high at 71.55, then instead of setting my stop just below the day’s low (my common strategy on less volatile stocks), I set it tighter, because my ego didn’t want to give up my $210 gain for the day on CLF. Got shaken out at 71.78 ($270 loss), and it immediately rallied to 72.50. Put that one behind me and moved on.
Noticed CNC had pulled back sharply from its high of 22.42, tried to resume and failed at 22.27, tried again and failed at 22.10. I liked these lower highs and shorted CNC at 22.08. It was an extremely gradual trend of lower highs and lower lows for quite some time. At some point it was trading around 21.89, and I played around with my cover order trying to get the ask lower. That was an exercise in futility, so I left a standing order at 21.87 in lots of 200 shares, which eventually triggered piece by piece for a gain of $210.
Around 3:06 I noticed SPWR failed to make a new low and retraced. After confirming the trend, I used a market order to get in at an average price of 72.84. I placed a stop at break even as soon as possible, because near the end of the day these rallies can be rather tired. It hit 73.26 and stalled, so I intended to raise my stop and instead entered the order as “limit” and it filled at market – 73.16 for a $320 gain. It didn’t really seem to have a whole lot more to give after that so I called it day.
Nice journal nod. You seem to have the right mindset for only trading stocks 5 months... an inspiration for a fellow noob trader.
Thanks, z0r. I have to make this work, or I have to get a regular job, so I've put my heart and soul into it, and you wouldn't believe the mistakes I made the first four months.
