August Trading Journals

and don't expect any easy money soon. With the new daytrade margin rules & negative market conditions, some of the 'real easy money'(the used-to-be newbie wannabe daytraders who thought it would be easy) just won't exist. There will be mostly seasoned professionals out there.

 

To all:

First of all, I am a small potato trader, and while one day I will sure break into swing trading, now is not the time. I am not ready yet (capital/experience/etc.) If I can fully extract my potential as a day trader, with my current position limit (3000 shares, 16 positions, and it is not even a year yet) at thiss firm, I can make some serious money, and eventually evolve into a top tier trader.

My first year is almost up (October 18th will be my one year anniversary), I am up $43K ($47K YTD, January was my first black month, lost 4K last year at this firm). It was a tough road, but I love the game, what can I say?

For all of you who suggested taking a week off, I can't do that. Every morning, there is a basic instinct in me that tells me I need to go play. Every single day, I believe I am capable of making money. At my firm, I see it with my own eyes, the very best traders in this business, bring home 80-100K, in a month like this. Every single game is winnable, it is just a question of how you approach it, how you attack your enemy. Precision, composure, focus, it really takes a lot to become a serious trader, and a serious trader rarely takes time off, especially not because of the fear toward his enemy. No fear, no mercy, no regret.

The reason I am up McDonald money for the month is simply because I did not capitalize on trades/days I should have made serious money (Fed. rate cut, Friday rally, etc.) If I stayed out, I would have missed those days. It is not because the market has been difficult, it is because my trading is not purified, yet.

My goal is to control my aggression to the point it is a sword in the hands of an expert, I should be able to pinpoint it at best possible times. Strike when the opportunity arises, defend when nothing is happening, yet always looking, always be in the game, every day.

There is no telling how long the current market will last, I am very sure that players of all size levels are struggling. In trading, there is only one level you want to be on, a true elite, someone who can still make size in this environment. That's the difference, that's where you want to be. Someone who truly devotes everything he has to his love, and his fight.

That's what I am working toward, and for that reason, I write this journal to criticize myself, to pressure myself, to become a better trader. I want to create a second voice that screams at myself everyday when I do something stupid.

In this business, sky is the limit, if you don't force yourself to play your best, who is gonna to? I post this journal because I do not want to make any excuses, on any given day if I don't make money, I played a bad game, no if/but/maybe, on any given day, it is possible to make money.

In September, regardless of what the market will be like, you can bet I will be out there, playing the game. I see myself doing this until I am down to my last bullet, and it is a long way off . . .

I don't care who posts on my thread and what, you need to have very thick skins if you post your performance in public and show people how did you make money and why, how did you lose money and why.

It keeps me honest, it makes me face my performance on a daily basis, it forces me to become a better trader. I want all of you to watch with your own eyes, as I either make it top tier someday, or blow up like many before me. There is no middle ground, for me, it is either make or break, black or white . . .

In the end, it is nothing but love . . .

 

Any time something is not working, you gotta find out why, and I believe despite of a small loss I have found the truth behind my recent shooting woes. Changes are expensive for traders, any time you add a new indicator, a new play to your book, you are going to take hits. Last week I added Bollinger Bands and had good results, and this week I have been shooting 25% and down $1200 for the week. There is no free lunch, you will take hits if you try new tricks, and you hope you quickly absorb the new tricks and make money again.

I have been trusting this indicator too much and shifted from playing a tight tape game into a chart game. Chart game results in looser stops and not getting out of the positions in time, while it allows me to track more positions at a time, in this brutal environment it is just a horrible idea (unless of course, I become a true basket trader and do dozens of positions at a time). I MUST wait for tape confirmation, I have to see some size, a BID, a ASK, something. I can not afford to jump into 1x10's and 2x5's, then set a chart stop, it is too loose, it is no good. Regardless of what the chart looks like, if the tape is not moving, it is a neutral position, a 50/50 trade. I have to lean on those BID/ASK's, tighten up the defense. I have took too much unneccessary damage last a few days. Playing a chart game allows you to have excuses to sacrifice on precision, and that is a big no-no.

Today would have been a total blown out if I didn't catch a very fortunate trade in AGN. I was torn apart missing first five shots of the game. I see my mistakes crystal clear now, wait for tape confirmation, TAPE, TAPE, TAPE, TAPE, just because a stock seems to be bouncing off the Bollinger Band doesn't mean buy it, watch the tape, wait for the BID, some sort of BID to lean on . . . The way I traded last 3 games felt like a return to the old ways of May, that's exactly how I got smoked until I switched to tape confirmation. Tape > Chart!

3 of 12 shooting, 8700 shares, 2 bullets, +209 before commissions, -120 after . . .

Pre-Market: A bunch of health care upgrades and energy upgrades

9:30: Took THC at 56.75 and hit immediately for 22 cents loss, it was one of the health care stocks upgraded but HMO index reversed immediately, we had some data feed issues this morning and I got out a touch too slow. Took some MMC on IUX strength and got out too early, missed a 60 cents move. Took some WFT on OSX pop and got hit for 19 cents as that happened to be OSX's morning high. Took some EPG on XNG strength, hit for a nickle loss and it ripped half a point. Took GS on good tape action long and I was in the money by 40 cents, all of a sudden a 70000 offer showed up as the market reversed (actually, BKX/SOX were going straight down, I should have expected this, XBD alone can't hold up) and I was hit for a 10 cents, essentially losing 50 cents in GS . . . Not only I had the wrong idea of overall market direction (futures near top band but overall trending up so I wanted to go long), my execution was simply horrendous.

10:03: Took AGN bullet on DRG sell-off (Mrs. D. was also short, when you were as cold as I was, you needed to ride a coat tail, that's exactly what I got, just the fact she was short and a big offer convinced me to put up the bullet). Shorted 800 shares at 76.51, market went freefall but he displayed a 20000 BID (fake) at .40 which scared me into covering half at .41, shorted 200 more at .20 and covered it all at 75.54, sweeter than pie trade, of course it went down further but that was after an extended consolidation, despite of the lack of size I have to say it was the way I need to execute to win this thing. Unfortunately my bullet in LM on XBD sell-off didn't work, this stock just doesn't move anymore in a slow market, made 20 cents but it was on a tiny position. There was no offer, it was a waste of bullet.

2:00: This just sucks, all of a sudden all energy stocks went through the roof on real volume and large prints. I thought it was the delayed rally afterall there was an upgrade in the morning. Took KMI and TDW and I got hit 20 cents a piece . . . That said, today I learned a new tip from a fellow trader, (unconfirmed) every single Wednesday the commodity board announces inventory level, and that is a HUGE catalyst. The energy stocks will move sharply to one direction or the other, make it the only day of the week on which it is ok to trade energy stocks in the afternoon (all other days, the commodity price churns, so does the stock price, in the afternoon). I need to confirm this, if it is true then I have to watch every energy stock every single Wed 2PM. Any idea where I can find a list of events like this sorted by calendar? It turned out to be a rumor of natural gas reduction, a RUMOR, ahhhhh!

3:00: Churned EPG and IBM a little . . . actually made a few cents on each, but too little, too late . . . Still, given the way I played in the morning, it was a very fortunate game . . .

I am in danger of being swept for the week. 3 games losing streak, I have dealt with this before (lost 10K in two weeks late April), composure, composure, composure. I am down $750 for the pay period, I have had 6 black pay periods in a row, I still can make it 7th, getting a check this pay period, no matter how small, will be a HUGE mental edge going into September, when I absolutely must take my game to another level.

Next two games, SURVIVE IS THE WORD . . . Strength, courage and focus . . .

On a side note, Mrs. D. signed her 6 years contract with the firm today. She is the first female trading desk manager at my firm. The trader who was here 5 month and let go with just a 5K deficit in firm capital, he talked to the owner yesterday and got his account back, ready to play again. Great organization indeed . . .

 

I couldn't agree more with you. I want to be out there in the trenches fighting every day. No days off for me...no way! Real (professional) traders are profitable in all types of markets come hell or high water. They don't engage in excuse abuse or whine, results results results are the name of the game that separates the professionals from amatuers, no junk excuses...just get the job done. Learn how to make it happen right now with whatever lousy hand you're dealt, that is the mark of the true professional.

 

While I don't disparrage Hitman from trading every day the market is open, I don't agree with shortnfool that you have to trade everyday to be a "real" professional. Taking a day off or a week off or the summer off to relax and refresh your mind can do wonders for trading performance. Don't forget that a "real professional" is running a business, and like any other business, you need time away to reflect on your goals and get ready for another charge. I don't consider this making junk excuses or whining. Sometimes a professional can recognize hell and high water and avoid drowning or burning up. But if you can only make it by trading every single day, then more power to ya. For me that is called overtrading and I'm not very good at it.

Hitman,

Like everyone else here I really appreciate you posting your journal, the good and the bad. Keep at it, I know you have the stuff to make it to the top.

Kirk

 

Very true WarEagle, reminds me of Covey's 'sharpen the saw' chapter in his famous book.

 

WarEagle: ”Sometimes a professional can recognize hell and high water and avoid drowning or burning up.”

As usual, excellent post WarEagle.

Shortnfool: ”Real (professional) traders are profitable in all types of markets come hell or high water. Learn how to make it happen right now with whatever lousy hand you're dealt, that is the mark of the true professional.”

“Real” professionals may be profitable in all types of markets but often to varying degrees. “Real” professionals know when to drop their size and expect less from the market. “Real” professionals cultivate patience and strict discernment regarding the quality of potential trades. “Real” professionals do not see the need to trade “come hell or high water” unless systematically specified in their trading plan.

I believe there are times during the day when you would be wise to step aside and wait. And sometimes there are entire days when you would be wise to step aside and wait. And sometimes its best to take a vacation. I don’t believe that you must learn to play every “lousy hand you're dealt”. It is not necessary to be able to trade in every single possible intraday environment to become successful. Not that that is something any trader should not attempt to master if that is his/her desire.

If the spirit of your statement is that traders should adapt to changing market conditions, though, then I agree.

 

So thats is ms. D...I saw that on the memos.

Hey Hitman, I heard Worldco's new trading floor on 100 Wall Street is going to be RIDICULOUS. So try to get in there.

I can understand being there everyday...but not trading everyday. Personally..this week I would go in in the morning and wait for an absolute "layup" or I will not trade. Then I leave at 11...But that is the benefit of living 2 miles from my office.

Good luck tomorrow, don't force anything and just take what "the market gives you" if its not there..eat the loss for the pay period because better times are right around the corner.

 

This is what I am talking about to be in the groove, it is so important to win small yet consistent games so when the opportunity arises you are at the bleeding edge, ready to unleash your full strength. After losing 3 straight games, I was way too conservative today, while I pulled out a minor victory it could have been so much more. My size and aggression were not there and I passed up a lot of trades.

2900 shares on 4 of 6 shooting, +535 before commissions, +393 after, 1 bullet . . . Still down $300 for the pay period, and tommorrow's game will probably be super light volume as many many traders at my firm will take a long weekend off heading into the most critical stretch of the year. I must win tommorrow's game and seal that check, it doesn't matter if it is a $50 check, it is all about psychology. I want to keep my streak of positive pay periods, I want to begin fall trading with confidence.

My shooting improved immediately as I started to wait for tape confirmation, unfortunately my only bullet of the day was on the strongest stock of the day. I was unwilling to put up more bullets and I passed up a lot of opportunities as a result . . .

Pre-Market: Almost no news, who would have thought today we would have broke all support?

9:30: Shorted MER at 51.62 and covered for a 20 cents profit, accidentally bought more than I should have on cover (it was a partial fill on the short and I didn't realize it) and lost 8 cents on the extra shares. Ended up a loser trade after commissions.

9:39: Saw BTK/DRG going straight up, took FRX at 74.14 and AGN at 74.81, futures squeezing hard, was in the money by as much as half a point on AGN and the specialist pulled the BID from underneath me and stopped me out at 74.9, dime trade very annoying. Fortunately FRX worked well and I took 56 cents out of that. Also got WLP on HMO pop and unfortunately entire market came in and I stopped out for 20 cents profit and left a lot on the table after a brief shakeout.

10:02: Put up a bullet on DNA, bad mistake, BTK was the strongest sector at the time, and DNA was really strong, had I put it on CRA instead this would have been a totally different day. Lost 6 cents on a short on DNA, it was an incredible feeling to see market break every support hitting new low's and this one stock is hitting new high's. I knew he was strong, I really wanted to buy on a pull back to mid-band, but I passed it up because I couldn't do it when everything else is falling. Tape is the king, there was a major insitutional buyer in the stock this morning and nothing can put it down. I spend too much time watching him and I was unwilling to chase anything else.

3:00: Shorted IBM on a fake pop of the futures for a 30 cents profit, very fortunate catch, this stock was tough, he was trading all over the place . . . Will take anything today, tommorrow I need $350 to finish the pay period in the black . . .

On a side note, Mrs. D is moving to our new location at 100 Wall Street (from 110 Wall Street), I inspected the location with her today, it is freshly innovated and feels like a much better environment to trade in. I will post details later. This looks like a great opportunity to receive some real training from her as once I am part of her desk she will undoubtly find a real incentive to make me do better.