CFMTrader Journal

Discussion in 'Journals' started by CFMTrader, Feb 18, 2008.

  1. Well ... here I go

    Brand new to day trading. I have been investing in the market for many years ... and have at times thought about day trading.

    I retired from my first career a couple of years ago and then took another job which I left at the end of last year.

    After working for the MAN for a number of years, I have the chance to work for myself and see day trading as an opporunity to accomplish this.

    I wanted to start a journal so I could share my experience of being a rookie, what I learned and will learn (both right and wrong), how I will grow as a trader, and to get feedback from other traders.

    If all goes well, I hope to be trading live by the middle of next month. I'm in the process of setting up a company to trade through and those other things that have to happen to get started.

    In the mean time, I have been reading and studying to get myself prepared for my go live day.

    As I move toward Go Live, I will fill in on my expectations, concerns (should I even say fears), and how I'm planning to approach day trading.

    Please feel free comment ... I look forward to hearing from my fellow traders.

  2. Second Installment

    I have been busy finishing up getting my trading account set up, and I'm ready to go live next Tuesday (I'm out of town on Monday).

    I have really focused on ES during practice trading the past two weeks. The movement and ability to make some money during the day are attactive. Of course there is also more risk if it moves against me ... but I have also been working on making sure my stops are in.

    I'm currently using a 5 minute chart with 12 / 78 MA lines and MACD. I also set my resistance and support lines, usually based on the past five days, plus mark new ones that appear during the day. I also use TRIN as a gauge of the overall trend of the market. I have also been watching volume as an indicator ... but still don't feel I have a good handle yet on what volume is telling me about what is coming.

    I have also been trading stocks on occasion, but have been focusing on the ES.

    Challenges I have encountered during practive trading ...
    Going against the trend ... I find myself wanting to fight the trend at times.
    Overtrading ... I have been working hard to just sit on my hands at times.
    Not letting my winners run long enough.

    The past week I had three winning days and two where I lost a bit. Friday was interesting. By mid morning I had lost almost $800 (paper money) ... then had to work all the rest of the day getting it down. If finished the day at -$250 (including commisions). I was satisfied that I was able to get back much of the money I had lost, but then I could have been positive if I had not made mistakes at the beginning of the day.

    Well the moment of truth starts on Tuesday ...

  3. So I have reached the one month mark in trading ...

    The first month has been interesting.

    The highlight. I moved from ES trading to stock trading on 3/26. What led to the change? Simple ... I was loosing enough money to make it hurt.

    I have enough capital in my account that I was no where close to that legendary "blow out" status for my account ... but I lost enough money that I coundn't continue to sustain loses at the rate I was occurring them.

    Today I was looking back. On the last three days of ES trading I lost 1200. My trading plan includes a curcuit breker for monthly loses which I will then switch to paper trading for the rest of the month ... if I loose more then my curcuit breaker amount before the end of the month. With the kind of loses I was taking up to 3/26 ... I'm not even sure I would have made it to the end of the month. I looked at it as demoralizing to have to move to paper trading!

    Moving to stock trading has helped significantly. My belief is part of what helped is that violitity has slowed way down in the market the past two weeks (both my own observation and the comments I have read on this board), and that has helped me in seeing and understanding what is happening.

    Moving to stocks has also slowed down the action to a level where I have an opporunity to understand what is happening. When trading the ES ... trades would move in a matter of second. Trying to understand why a trade when up or down in a mater of 30 seconds was leaving me dazed. Now I'm in trades that last anywhere from 10 minutes to an hour. I have time to look at the trend of the market, the trend of the stock, price/volume action for both, and see how they correlate (or not).

    Since moving to stock trading, I have been trading one stock at a time in 100 share blocks. I was doing the same with ES ... with one contract per trade. With stock trading, I have had a positve P/L on seven out eight trading days, BUT, when I include commissions then I have been in the negative. As an example, last week my P/L was +138 but my commissions was a -231 so my results for the week were -94.

    I can accept the negative result for the week. While we have expections of making our first million right away (why else would I choose to do this), I was also very realistic that there is a learning curve involved ... so what was the learning curve going to cost me?? With the ES it was costing me too much. In the three days I mentioned above, I really questioned whether trading was for me after the second day (I had lost 748 in the two days leading up to the Easter three days off) ... and looked at myself over the weekend. I came out of those three days off still determined to trade, but had a real lack of confidence that I could be sucessful. The following Monday I lost another 472 on the ES ... and said that IT!

    I moved to stocks the following day ... had a net positive day ... and started the work of rebuilding my confidence. Have I reached the point where I'm ready to declare myself a world class trader ... Hell No! But after a week and half of trading I no longer start the morning my wondering if today is the day I loose so much I can't take it any more.

    So where do I head from here?

    I'm going to contiue on my current plan of 100 shares at a time stock trading until I feel realy confortable that I am able to trade for a P/L profit on a consistent basis for a while ... perhaps the entire month of April. I expect that I may be stuck in the positive P/L but negative with commission issue for awhile, but, perhaps that is my next siginal that I have moved forward if I'm positive in net as well as P/L.

    Issues I'm feel I'm making progress on: Entry and exit points, not chasing a moving stock, looking at the volume, indicators, and trend before making a decsion to make a trade, and being more emotionally controlled over my trade decisions.

    The issue I was focused on at the end of the week was looking at what I'm making or not making as far as money. In a week were my P/L was positve, but my net was negative, I had to ask myself how I was ever going to make a living out of trading. Making 10 to 20 a day is not my idea of a living ... I can certainly make a lot more doing something else. For me the issue is how many shares am I trading. If I was trading 200, 300, or 400 shares at a time, the potential for profit obviously moves up, but the cost of trading stays the same ... the chance to make some money! I'm not ready to do that yet, but when the time does come I see a profit potential. Of course I have to have the self confidence in myself and my system to move past the 100 shares per trade rule I currently have.

    The month of April brings the second month of education as a trader. I'm looking forward to it. The end of March and the beginning of April brought a period where I was neither making a lot of money but I was loosing alot either. I can live with that as I grow as a trader ... and as I move on to my next step as a nubie.

    Best of trading to all ...

    Later ...