Major Economic News: Existing Home Sales tomorrow Finished up about +$625 net today...missed a lot of signals..still virtually impossible to hit all of the signals that I get manually..in the process of automating a portion of my trading. Meanwhile, I'll still be 100% manual in my discretionary trading until otherwise mentioned. - Traded HD very poorly at the open...should've murdered that trade..but I had my biggest loser of the day in that fade and it also diverted my attention from my primary strategy and it caused me to miss a few trades that I would've made money on. Either way, I should've traded HD better as a fade play. - Still trading pretty small size and focusing on consistently holding my winners according to my exit rules (cutting losers is not a problem for me) --- I've recently noticed a few things in my big winners that I think will help me to protect more of my profits in those trades by watching RSI levels at extremes in conjunction with S/R. I've had RSI on all of my charts for years, but I've used it in the context of trend trading, only for RTM trades as a sort of alert (btw -- deciding to fade a stock b/c the RSI is at extreme levels intraday or overnight is a bad idea and when you're wrong you will be very wrong...I learned this from experience many times..just my .02 on that) - Regarding my size for trend trading, I'm going to take it up just a little bit tomorrow with an additional few hundred shares b/c I've been doing a pretty decent job focusing on the process of my trades and I've been pretty consistent P&L-wise. This strategy is very liquid and size-wise I'm barely even tipping my toe in the water -- so if I'm right about this strategy's potential efficacy (still in early stages), there should be a lot of growth in the future only to be limited by any trepidation on my part to really press the gas -- which is part of the reason I'm using this journal to be held accountable for any such act of succumbing to fear of much larger size in a valid strategy. - Today was a huge down day...and the largest down day since 8.11.10..long time. As anyone knows that's followed this journal until now, I've been a little skeptical/curious about how this approach will perform during pullbacks or bear markets. I had to do a little searching for shorts on my own, but I had a lot of valid short signals (and long signals today near the open) today via my filters which, is encouraging. Fingers still crossed. - There's a lot of earnings to play tomorrow so I'll wait to see what beat big and missed big and guided much higher/lower than expectations besides HPQ which is already on my radar. I traded it like a madman post-market today (lost 700 than made 850 back...traded it very poorly) Good luck tomorrow. "A pessimist is one who makes difficulties of his opportunities and an optimist is one who makes opportunities of his difficulties." ~Harry Truman
Today's results: -Two hundred in something Today I traded well and had a few computer glitches early on but I still managed to have some nice trades. I finished pretty much flat on the day---BUT after looking at some of the late day signals, I slacked off quite a bit in the last hour and missed a few signals that could've made this at least a $1k day. I really have no excuse for this. I've done really well in taking my signals and confronting many of the fears of trading this new strategy. Seeing and catching late-day signals is easy...but I have to remain vigilant. Today, I became complacent towards the last hour or so of the day and I was a little drained. I'm not a huge coffee drinker, but it wouldn't be a bad idea to get up and have a cup when I'm feeling this way. I was going to wait until the beginning of next week to raise size, but since it's the end of the month and b/c I've been very consistent with my process/results, I'm going to begin tomorrow. I expect losers to be a bit larger and the same for winners. I can't believe it's already March. Here we go. Good trading to all.
A great post....result of lurking on ET. It really hits home for me and is further confirmation that this is my #1 hurdle and has been my #1 hurdle even after having a great year in 2008 (who didn't?). Even when the people around tell me that I'm good BUT I've been risk-averse. I tried to overcome this issue in 2009 after having banked some nice coin, but being relatively new to the business, I traded too large of size and my RTM approach was inappropriate during 2009 and resulted in a large hole (I dug out in a few months). Then dug my largest hole ever in 2010 and subsequently dug out in a few months and completely out and back to the black on the day of the Flash Crash. Confronting this mindset is my primary goal of maintaining this journal. Automation has certainly helped and I'm working on automating as many of my ideas that I can, but even still, the obstacle of considering the money in a trade is something that I must overcome to make the change from good to great.
Another great post. Although I've had one great year and two mediocre years during my career, (doesn't include the first year when I was barely breakeven) I never looked at trading as an odds game -- I always focused on the little picture (the individual trade) and never realized that I should focus on the big picture even while looking at the big picture. Over my Christmas vacation I did some reading regarding the mindset of great traders and how they view this as an odds game. In the past, I've never internalized that mental model. The irony is, I've come to know a number of moderately successful to very successful traders and I've never, ever had this conversation with any one of them. Although in hindsight, it's clear that this is/was their mental model. I am focusing everyday to internalize this model.
Friday's take: -$2827.91 I raised my size a bit on Friday and I traded the same for the most part. The worst thing about the beginning of the day was that I ended up getting a disproportionate amount of losers early on than usual and I knew I was having a rough day without seeing my P&L. I pulled back on taking trades and of course as is usually the case, I ended up missing out on trades at the end of the day that could've either made my day less worse or possibly brought me back to positive. My cents/share in losers was the same as it has been. So on Monday, I'll be doing the same thing I did on Friday...except I won't stop taking signals. In a few past posts, I talked about partially automating this new strategy. Instead, I've decided to forgo that route and completely blackbox this approach (easier said than done). I currently have two profitable intraday black boxes running and if I can black box this one as well it will free up my attention to focus only on swing trades, ideal intraday breakouts, and RTM stuff (especially if the market really breaks down here). Good trading everyone.
Finished realized +$1547.33 (still open $119.00) Good day. Decent finish to the month. Automated trading was good this month. Looking forward to tomorrow/next month after all that I've learned this month psychologically and strategically. Maybe the late Feb volatility will continue into March -- QE2 probably isn't going to end early. May post a few of my daily process goals for next month later on. If not, good trading to all.
http://joefahmy.com/2011/02/27/relative-strength-talk-at-smb-capital/ Great video. No...I don't trade for SMB.