Totally new to trading. Need a learning journal. Will post here, so other newbies may benefit and I can possibly get your thoughts along the way.
Preface: Came into this through Youtube videos, ended up watching a ton of primarily Warrior Trading January to May 2020. Did a handful of audiobooks. Opened an IB account and put in 2k. Traded paper and real and eventually ran it down to 1.5k over the course of 6 weeks. Realized I needed a different approach. (maybe everybody was right ...) Took out some money from the IB account and bought a second monitor, downloaded NinjaTrader 8 instead of IB's Trader Workstation. I like NinjaTrader charts way better. Subscribed to Kinetick data. $79 bucks is kinda steep without L2 ... Using one of the channels that streams trade ideas on youtube as a scanner for now. Week 1: Back to basics. Looking at candlesticks, price action, support/resistance again. Trying to wrap my head around that some apparent levels are not necessarily meaningful - e.g. going sideways for 10 minutes. Some levels that touches the daily chart in several places are more reliable than those that do not. It seems that some levels only have relevance in connection to a specific strategy. Do I need to somehow classify/categorize my levels? Do I mark levels off the wick or the body on the daily chart? Watched a youtube video of Sam Seiden explaining supply and demand. Liked it a lot. After watching that it seems that the candlesticks we watch are more like the shadows in the allegory of the cave. I need to process them very differently from what I initially thought. I am not even ready to trade paper at this point, which is a tough realization after 8 months. Also trying to come to terms with the fact that the inherent noise or randomness of the market will make it difficult to draw learning. The market will continue to throw me all sorts of nonsensical results that may just be down to randomness. I know this is why I must put in hours of screen time, but how does one not put too much or too little significance into a certain outcome? An audiobook I have mentions how it makes no sense to having an emotional response to being wrong on a heads or tails bet which is akin to a trade that also has some random component to it. Made me think about all this.
Sir, you are too kind. I think I picked up the allegory of the cave from Daniel Kahneman's "Thinking, Fast and Slow". Its a compelling way to remind oneself that you can be completely convinced and completely wrong at the same time ...
Week 1 paper trades: The shift from strictly chasing momentum up early in the day (like Warrior Trading Ross) to trying to short has helped my overall perspective on things. If the mind only looks for bullish signals that is probably what it will see most of the time. I would usually end up trading the backside of the gap getting stuck in a long position and unwilling to cut the loss (still have to work with this). This week I started shorting that backside, usually 09.40 - 10.30 market time, and then started trading the channel (the opposite of momentum I guess) in the afternoon when a trend had established. It looks like many gappers either stair step down or start to curl up slightly again towards market close 13.00 - 15.00. I feel price action is speaking to my intuition but I did not get to use daily levels of support and resistance as much as I had hoped since the gapper either traded higher than any previous levels or that previous days did not have multiple hits to confirm that level. Having two monitors really helps as well. Added MACD and RSI to my charts. Week 2: I will not have the possibility to paper trade next week due to family vacation but will probably be able to get some "academics" and some youtube lessons in. If you know a good book on audible - pls let me know. Week 3 I really want to start working on my risk/reward management since this week I would just enter a position when it looked right.
Week 2 (and most of week 3) did not provide any opportunities for paper trading due to family vacation. Week 3 paper trades: I am still trying to figure out some methodology to distinguish between intuition and hope - or in other words do I think the price will move in a certain direction or do I hope the price will move in a certain direction? It is difficult for me to tell the difference and I suppose this is the "psychology" aspect for me at least, since I have not really felt fearful or greedy per se even when trading and losing real money. I still find it much easier shorting the backside of the move rather than being long during the first part of the day. For the short trades that don't work out instantly I will sometimes "average up" once and that has been enough to keep me in the green for all my short trades this week. Only paper traded two days this week but I am fairly confident with my reading the price action. I applied to change my account with IBKR from cash to margin and I am now actively looking to joining a paid chat room to continue learning. Please let me know if you you have any recommendations. Week 4: I would like to have joined a chat room by end of next week. Also, doing my first yoga audiobook to explore that world for help in my intuition vs. hope consciousness.
Week 4 paper trades: Only did short trades this week and only traded two days due to my 9 to 5 and Wednesday I didn't find anything I liked. Had to do some averaging up a couple of times but closed all positions green this week as well. Lesson learned: Never short a gapper in the pre-market. Still listening to my audiobook on yoga but have not started actually practicing breathing exercises etc. but it seems there may be something for me to take away from that to apply in my trading. Paid the license for Ninjatrader so I am ready to go live. My account was approved for margin and I added 1.5k so I have something to train with. Did not join a chat room yet but still looking. Let me know if you have a recommendation. Week 5: I am contemplating getting my feet wet next week if there is a stock behaving the way I like.
Week 5 paper trades: Well, that was a bumpy ride. Traded paper account Wednesday and Thursday. I was planning on only doing short positions this week as well but managed to dribble the ball on my feet once and entered into a long position when i was trying to cover a short. Hit the panic button (close) in NT when I realized what had happened and was left with a 6 dollar slap on my 42 dollar profit. Did another short that worked out well and I was up $92 on the day. Then things went sideways. Third time went against me and I ended up holding that position into the extended hours and eventually closed with a loss that nearly wiped out my entire profit of the day. The next day I kinda repeated the scenario and was short until next day and covered for a break-even. I am now trying to size my orders according to an account of $ 2k. Since I have to maintain a margin of 1.5x the position it means that a typical order size for a $6 stock will only be 100 as that will allow me to average up once and then I am maxed out for margin. (e.g. 600 + 700 = 1300 1300 x 1.5 = 1950). I am trading around half size of previous weeks but I guess size doesn't matter (!). I am not really satisfied with my bag holding propensity but I am happy that this week's trades demonstrated my problem. Still something to work on here for sure. Came out with a small win for the week. Found Patrick Boyle on youtube. It is hands down the best quality educational content I have come across yet. I am watching his portfolio management playlist right now. Probably basic stuff for many but exactly what I need at this point. Week 6: Not sure what goals to set for next week or what to make of the market right now. Kinda interested in seeing how the overall market will behave before I decide if next week will be the first one with real money trades.
Hey there, thank you for sharing your progress. I'm just starting up in day trading as well I've been researching a decent program that I can learn from without breaking my bank. Have you decided what live chat group you plan to join?