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mastacoli71

Registered: Dec 2006
Posts: 2124

01-12-11 01:18 AM

Another day in paradise. Started off the day following all my rules. Struggling a bit with profit taking but that will improve with time.

Then, the afternoon grind hit which is when I typically start looking for trades and swaying from my dicsciplines. Took a trade on DO with the range it had been trading in all morning. Got stopped out only to see it close right where my original profit target was sitting. I have to stop forcing trades and stick to my disciplines.

Revenge traded VRTN in the afternoon from a morning trade I was stopped out on. News type trade, I know better then to trade them. It is something I am simply not good at.

Good news for the day is I did not take one pairs trade. I actually shut down the pairs alert system. It will be idle at least until the end of February.

Net P/L = +1200 on 36k shares

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PropTraderMTL

Registered: Dec 2010
Posts: 302

01-12-11 01:38 AM

Quote from mastacoli71:

I've come to the conclusion that it is not the pairs that are hurting me but rather my psychology with them. I have been struggling for the past 5 months with pairs and have finally realized that it is time to kick them to the curb until I can come up with a way to trade them in the current environment. Until then, I will break out of my comfort zone like I mentioned in the beginning and trade strategies that I have been working on during my break.

Personally I have never really understood the attraction of this strategy. I obviously understand how it works but I would rather just buy the strong one and trade it like that. For me I really dislike holding trades that go against me. With the pairs strategy you always have one position that is against you. I know its meant to be hedged but from a psychological perspective it just really doesn't suit me.

What sort of strategies are you looking at? automated?

Tough day for you but just treat it the way your doing... its just another day. As long as you followed your system then there is no reason to be annoyed.

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mastacoli71

Registered: Dec 2006
Posts: 2124

01-12-11 10:35 PM

Quote from PropTraderMTL:

Personally I have never really understood the attraction of this strategy. I obviously understand how it works but I would rather just buy the strong one and trade it like that. For me I really dislike holding trades that go against me. With the pairs strategy you always have one position that is against you. I know its meant to be hedged but from a psychological perspective it just really doesn't suit me.

What sort of strategies are you looking at? automated?

Tough day for you but just treat it the way your doing... its just another day. As long as you followed your system then there is no reason to be annoyed.

Trading mean reversion of pairs is definitely not easy on the emotions. Sometimes it gives you a false sense of security thinking you cannot get hurt too badly cause you are "hedged".

No matter what strategy you trade, risk management is always important. That is one of my weaknesses that worked well in volatile markets but not now so I have to really focus on it.

Right now I am concentrating on two strats, mean reversion using standard deviation as entry and intraday / day breakouts. Nothing is automated. I use trade ideas as my alert system as well as a small list of stocks that I follow daily.

Thanks for the encouragement. To be able to come back with a positive day after a day like that says something about the changes I am making. It will be a process but in the long run will pay off huge. I always like to look at drawdowns like paying tuition in college. Nothing is free. LOL.

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mastacoli71

Registered: Dec 2006
Posts: 2124

01-12-11 10:45 PM

Made a commitment to myself to stick to disciplines today. Amazing what happens when I do. Only traded 1/2 a day and came back right before the close to take some early trades off. Still fighting the urge to move stops and profit targets in the middle of a trades but that will subside as I gain my confidence back. All in all a good day.

Back to breakeven for the month. Goal this week is to get account back to green without taking any unnecessary risk. If it happens, it happens. I live to trade another day.

Daily Net P/L = +3300 on 13400 shares traded

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PropTraderMTL

Registered: Dec 2010
Posts: 302

01-12-11 11:27 PM

Quote from mastacoli71:

Back to breakeven for the month. Goal this week is to get account back to green without taking any unnecessary risk. If it happens, it happens. I live to trade another day.

Nice one, it hurts when you take those hits. I was positive like 12 out of 13 days and on the 14th trading day I lost 65% of what I had made out of the previous 13 days. Managed to pull it back and have a decent month to boot.

You have held your trade during the tough time (being negative) and now just ride it up to the next resistance at the end of the month

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mastacoli71

Registered: Dec 2006
Posts: 2124

01-14-11 03:02 AM

Another day, another lesson learned. Mean reversion strategy off the open would have been great had I taken my profits and ran. Unfortunately I tried to squeeze everything I could out of the trades and it ended up costing me. For example, faded PPL off the opening move. Trade came in my favor 18 cents. I was looking for 20. 18 cent profit turned into a 20 cents loss...too stubborn to run a trailing stop, too stubborn to just let it go. Log the trade, learn from it, and move on.

Funny how what got me into the rut will fight me getting out of it: THE MASS BETWEEN MY EARS! Goal tomorrow as it is everyday, stick to my rules.

I still have half of the year end trade on but will be taking it off MOC tomorrow.

Net P/L -1800 on 18k shares

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