Back again, looks like it was a choppy day. Amazing how much I can get done in life if I'm not glued to the screen. Here is the exit strategy on the daily chart. Need to see a momo divergence, decreasing volume, obvious support, where I will put the sell limit to get out (this is plan A). Plan B is I panic like usual. Gotta say, it's depressing being away like this. I miss the feeling of booking profitz.
You need to learn the joy of booking massive profits less frequently. Good day to be buying more SQQQ.
Yeah was just thinking the same thing. We're locking onto the much longer waves in the market by doing this. Position profit just doubled this morning. My trading development over the years has taken these stages: 1. Obsessing over an accurate entry (which I did find, eventually, and even used it in my first month trading) 2. Cutting losses when wrong. Much easier when you have been right for a while. 3. Trusting a trend and letting the open profits fluctuate. This is the stage I'm in now. I've taken up gardening to get my mind open to the need to let the plants grow before harvesting them. *edit- just logged in to see if I have the gutz to add another 100. Couldn't do it. It's taking everything I've got to make it this far with the first 300...
Nearly every stock opened down and most are getting bought off their lows. Looks like it may be time to tee up some TQQQ. I covered my SPY shorts this morning. Starting to buy a small long position. I'll add if the market proves me right. I'll cut it if the market proves me wrong. Have you read Darvas? His How I Made $2,000,000 is excellent, as his later work You Can Still Make it in the Market. In both he says essentially "so long as the stock is trading above its lower box (support) level it can go wherever it wants." William O'Neil is also very good for this. Cut your losses when the position is new and price close to your entry. But once the profit cushion builds, don't trail the stop loss too closely. Allow for the normal pullbacks and fluctuations.
Logged back in to see the unpleasant surprise. Today's action is an exact match of what Jessie Livermore called the "danger signal" or "one day reversal". Price makes a new low, closes above the previous high, volume greater than the previous day (and the same in reverse for a top). Will be looking to get out soon.... And days like this are the reason I evolved the "take profits and run" mentality in the first place.
I'm a big fan/student of Livermore. You sum it up very well. Look at the ES, for example. Last week we had two huge up days (10/3 & 10/4). But look at the volume on those two days. Both days were below the 10-day average daily volume and well below the volume of the two previous down days. However, as you said, look at today's ES volume. Today's volume was immense compared to last week's up days, and it was even slightly higher than the big 9/13 key reversal down day. Price and volume really trying to tell a story if you ask me. If there is a reason to be cautious as a bull (besides the obvious fact that we are in a bear market) it is this: On the weekly ES, this week's volume is still lower than last week's volume and we would need a phenomenal number of contracts to trade tomorrow to come close to the volume traded in the recent red weeks. Days like this are very few and very far between. If you enter and exit right, you will never manage to sell the top or buy the bottom. I was watching from before the open right through the first 30 minutes and I somehow was in a daze, flat-footed. Finally, I woke up to what was happening and closed my SPY shorts at $353 and change, and then longed at $352.50. So more than 5 points off the bottom before I acted, and I was actively watching. I just checked and my SPY trades went off between 10:06 and 10:08. Covered the shorts. Then had to run my calculation on current equity to size the new long. I will say that I am not at all upset that I "left 5 points" on the table," which is actually 10 points when you figure if I had stopped and reversed closer to $348 instead of $353. I am glad I held my shorts overnight and through the news volatility so I could capture the extra points I did catch. I like you journal and I believe that if you work on your swing timing and hold for larger pulls you'll be richly rewarded. I was almost sleep-walking through it until I finally got with the flow. To be fair to myself, I was working a TSLA position for the first 30 minutes and that is how the SPY action escaped my brain cells until after 10AM. But to be honest, that is also me making an excuse, because TSLA's action should have had me look more closely at SPY. Almost an epic fail!
Speaking from long and painful experience with the same problem, I offer a couple thoughts. 1. You need to really own the realization that you will NEVER succeed if you cut your profits short. A successful system requires that good trades are given the chance to run, helping to overcome the inevitable losses. If you try to manage every trade that is underway, you will always be a loser. 2. For me, it got to the point where I needed to enter, place a stop and target, and shut down my platform, or even turn off the computer until EOD. (Fortunately I run systems that take only one trade per day, and exit at EOD, so that worked.) 3. Yes, you may well have been rich by now if you had let your systems work. I understand and identify with that. So do whatever it takes to get yourself away from the trading environment once your orders are in place. It may require developing new strategies, and trading very small so that you can get over your fear of not watching every tick on the chart. But if you are serious about being a trader, you will do what it takes. Good luck.
Thanks. Just escaped SQQQ with a small profit. Not taking any chances after yestarday, since we're so far down range on the daily. Was sweating that one... *edit- worth mentioning the psychology of getting out here. The payoff is relief from worry over further unexpected setbacks, and a need to get out while ahead. I think my foolish experiments with averaging down "popcorn stocks" (which practically always popped at least once after I was in) created this mentality.
Being aware and mindful is a good part of the battle won. Most don't ever accept that their trading errors are because of their own response to their own psychological stress. I consider cutting profits short a trading error. I gave back more than half of my gains yesterday from the SPY long. Should be short right now but made an error and have no position. 100% cash and will be looking for a signal Sunday/Monday. Good work this week, @Wide Tailz