Realistic self-criticism is constructive - so if you took unnecessary risk of loss that needs to be recognised so it can be addressed next time. But in general terms, day-trading by its very nature incurs another type of unnecessary risk - risk of insufficient sustainable profit.
Day 7: 1/19/2018 Summary: SQ gapped up 5% premarket on positive analyst comments, so I closed out my SQ call options that I was carrying from the night before. Those profits made me profitable on the day overall – the rest of my trading during the day netted out to no gain and no loss. I will post the chart from one of my losing trades below. I also bought a few GE call options with a Feb expiry date – GE common looks a bit oversold/climactic selling to me. Took a small position so I don’t get railroaded in case I am wrong. And I took a small position in INPX – this is a speculative buy & hold, probably for a couple of weeks. Trade 2: Long TNA @ $76.38 at the high of bar4 as it was forming, stop placed at $75.99 below bar3. After seeing TNA test the day’s opening price twice and bounce, I figured bar4 might be good for a swing up. I proceeded to get stopped out on bar5, AND took 12 cents slippage in the process, only to watch the market turn back up on bar6 and rally $3 bucks for the rest of the day. So my trade idea was right, but the market stopped me out first. I believe they call this “trader’s torture”. J I considered buying 1-tick above the bar6 high (after bar5 closed the overnight gap down to YC) but my fear was this was just all a big trading range and I’d be buying high – couple this with the government shutdown rumors and I was very skittish about chasing price higher today. In retrospect, I probably should have been a bit more patient and waited for bar6 rather than buying on bar4. The fact that bars9,10,11 all were not able to close the open gap down the bar7 high was a sign of strength and likely higher prices to come. Buy like I said, I was nervous to chase with the shutdown looming. I also took a TQQQ long trade on bar12, which I thought was a reasonable reversal attempt, but I waited a couple minutes too long and bought a bit too high and wound up getting stopped out, once again to see the market reverse back up to my initial entry. However, even if I bought lower, in retrospect it wouldn’t have been a great trade. Good location but bad initial follow-through. Weekly summary: I made money this week, which I am happy about. It is interesting, because today I did the right thing in terms of taking stops like an adult, yet the market “punished” me for it while “rewarding” reckless traders who decided to not use stops. BUT, I made money this week and that’s the important part – I need to ingrain deep in my psyche that while my stop loss discipline will occasionally result in “unjust” treatment from the market, if I am able to finish weeks profitably, that is all that matters. Thanks for reading.
Day 8: Monday 1/22/2018 Trade 1: Long SCO (short crude oil etf) @ $22.19 on bar5, exited at loss @ $22.09 on bar7. Not a bad trade idea, but one thing I didn’t pay enough attention to on the 5M chart was that crude oil just made a triple-bottom on 3 consecutive candles – getting short there (via long SCO) had the potential to be a trap, which is exactly what happened. Bear bar broke right through the support, only to reverse up strongly – as soon as I saw that I knew I was in trouble. Fortunately, I stuck to my discipline at took the loss, because it would have gotten much bigger had I not (See bar24 70 cents below my entry!) Trade 2: Long UVXY @ $9.25 on bar8, took profit @ $9.29 the following day on bar6. Really upset about this trade. First of all, the trade itself was a bet on an opening bull reversal which is generally a low probability bet in the VIX ETFs. More importantly, I rode this all the way down and carried it into the prior day, and was fortunate to get bailed out by the market. In retrospect I should have traded half the size on the first entry on bar8, and doubled the size and scaled in 1-tick above bar11 and just dumped the whole position at $9.20 on bar11. Regardless, my whole management of the trade was bad. One thing I’m realizing is that even if I take big loss, the quicker I take it the better. What I mean by that is that even if my single loss wipes out the 4 prior days of profits, 4 days really isn’t that long in the scheme of things. Much better to just take that loss and make the money back over the next week, than take a loss that wipes out 4 weeks worth of profits and then have to fight the market for a month while feeling completely dejected in the process. The earlier I take the loss, the quicker I can return to focusing on making money. Trade 3: Bought GE @ $19.16 on bar76, sold the next day on the open of bar1 @ $19.30. I also unloaded those GE call options I was carrying from the prior Thursday on bar8. Another poorly managed trade in retrospect. I bought on bar76 because GE was stabilizing after getting crushed for many consecutive days prior. My indicators on the daily chart were all oversold to the level where most big cap stocks will usually bounce a bit, so I figured it was worth a long entry. This premise turned out to be correct. The problem is that I got my nice gap up the following day, and like a chicken quickly grabbed my profits at $19.30, while GE rallied all day up to $19.90. This could have been an extra $2500 if I just sat on my hands. I was nervous that the overnight gap up would close prior to GE moving higher. After the strong bar1 close, followed by the bar2 breakout, I should have realized that a trend day could be possible, especially considering how oversold the stock was. Also closed out those call options way too soon. I also didn’t like the way INPX was acting (b&h position I took last Friday) so I just bit the bullet at sold it @$.37 which cost me -$500 which was my entire GE profits from the day. Frustrating. I also bought some March02,2018 SPY puts with a $282 strike. Slightly underwater on these but am holding them hoping for an S&P500 pullback.
Day 9: Tuesday 1/23/2018 through Day 13: Monday 1/29/2018 I was not able to update the journal because I was busy with other stuff. Trading has been going well though.
Day 14: Tuesday 1/29/2018 Interesting day today - the lesson for me is that if I'm expecting increased volatility (reasonable assumption after a -.60% overnight gap down) then I had better not try to front-run bars (buying as bars are forming instead of waiting for closes to properly assess the price action). It adds unnecessary stress to a stressful situation and clouds judgement. Trades I took today: Bar2: bought 1-tick above bar1 high, hoping that bulls would be eager to buy after a large gap down since they have been so eager to buy any dips for months now. In retrospect, this was not a great signal bar, and it would be much better to wait for a 2nd entry long attempt. Bar6: scaled in (doubled position size) as bar6 was forming hoping for a 2nd reversal up. Here is what I was talking about in terms of waiting for the bar to close: Bar6 looked wonderful as it was forming only to collapse during the final 30 second - better to wait Result: stopped out on both positions 1-tick below the bar1 low as bar8 was forming. Bar8: bought the bar8 close (2x position size), seeing the big tail and hoping for a reversal up now that dumb money stops (like mine) had been run below bar1. Once again, patience would have been preferable here - bar9 was much a clearer signal bar. Yes, my premise on bar8 was correct, but buying above bar9 was the higher probability buy. Bar15: took profits on the bar15 close, afraid we would see a big swing down- bar14 spent a lot of time in the red, so I figured that bar15 actually may have been a 2nd leg down rather, than a 1st leg down. In retrospect, this was poor thinking proving once again it pays to just wait for bars to close before making assessments. In retrospect, buying 1-tick below bar15 or 1-tick below bar16 would have been great trades, looking for a measured move up, using bar(s)11-13 to project a 1x move. Stupid me. Bar25: Bought the close, small position - in retrospect, another poor decision. However, for months now anytime the indices look bearish, buyers have stepped-in, so I have to forgive my mind for being "programmed" into thinking they will likely show up again. Sat through an endless pullback down, and doubled my position as bar44 was forming. With the earlier strength of the leg up from bar(s)9-20, it was reasonable to assume a TR rather than bear trend all day, and that some type of bullish reversal could happen - lots of green bars in the bear channel somewhat validated this premise. Bar44 looks like textbook BPA in retrospect - Bear channel with 2-sided trading, H3/Wedge reversal attempt (bar41/42), bulls give up and we get a climax bar (bar43) after 3-pushes down (bar25,30,40), bear channel overshoot (bar44) is bought as bulls give up. Took profits on my entire position as bar53 was forming, after running the stops above bar38. Thanks for reading.
Day 15: Weds 1/31/2018 - Day 17: Friday 2/5/2018 mostly uneventful trading, profitable due to SPY puts. Day 18: Monday 2/6/2018 This was the big -4% selloff day in the S&P500 and a humbling experience for me. When the VIX starting going nuts at around noon, I figured it would settle down since stocks were holding up pretty well. Afterall, every VIX spike for months had been sold, why would this be any different. Boy was I wrong. I decide to "express" this trade by going long the SVXY-short VIX etf, and added to the position as it went against me. At one point I was long 1,000 shares with a cost basis of $95 (see screenshots of trades below). As some of you may know, SVXY opened at $11.40 this morning after blowing up. Thank God I had enough personal integrity to close the positions at around 2PM EST, and swallow the big loss. If I did not do that, I would have lost $80,000 and could say goodbye to my trading hopes and would have had to gone back to the corporate cubicle. Although I escaped trouble here thanks to getting flat during the day, I am not going to lie, this loss has me somewhat shaken - the most ironic part about this, is that this was the first time I have ever bought a short-volatility product in my life. It will also be the last time I ever buy a volatility product.
Day 19: Tuesday 2/7/2018 I took 3 trades on the SPXL today: Trade 1: Long SPXL @ $39.84 as bar1 was forming, took profit @ $41.00 as bar2 was forming. After 2 consecutive big overnight gaps down, and 3 consecutive RSI(2) readings below 10 on the daily chart, the S&P500 seemed very oversold to me and likely due for a bounce. I watched the 1st minute of trading and once I saw it was 2-sided and the market wasn't immediately tanking, I got long. In retrospect, I took profits too soon, which was a byproduct of me being scared with all the uncertainty in the market and my close call yesterday. I was just grateful to grab a profit and get out of there - should have been more patient, especially seeing bar1 and bar2 closing on their high-ticks. Trade 2: Long SPXL @ $41.71 as bar15 broke above the bar14 high, took profit @ $42.55 as bar17 closed (it was close to a scalp equaling 1X risk) Bar14 closed the open gap between the bar1 high and bar3 low, and was a 2nd bullish reversal attempt. I figured it may be a good low-risk entry point and it worked out. Trade 3: Long SPXL @ $42.92 at the high of bar36 after it broke out strongly, took profit @ $43.23 as bar38 tested the 60EMA In retrospect, this was a dumb trade. Smart in the sense that I wasn't fading a trend, dumb in the sense that I was buying high in a trend that may be close to exhaustion, which it turned out to be. One really good trade that I missed was buying bar(s)59-61, after a 3rd reversal attempt/wedge. Furthermore, even if I ignored buying 59-61, once the consecutive bull bars started really piling up by bar63, then I really should have gotten onboard. Summary: today was a good day, but thanks to all the losses I took messing with SVXY on Monday, I am down -$1,291 for the week, but like I mentioned in my prior post this could have been so much worse, so for that I am thankful. With that said, I am still up about $4,000 since I have been keeping this journal regularly, and for that I am grateful. Thanks for reading.
Tuesday 2/20/2018: Trades taken today: Trade 1: 5 SPY call options - bought as bar8 was forming, hoping for a reversal up after testing the open of the day. Result: Stopped out at a loss on bar13. After the overnight gap was closed on bar4, the market quickly reversed back down on bars5/6 - this could have been a warning sign that the market was not strong, and that long positions were dangerous. Trade 2: Long 1000 shares of SPXL @ $45.54 as bar 14 was forming, hoping for a reversal up. Result: Exited 500 shares @ $45.82 (after gap closed back up to the bar12 low) Exited 300 shares @ $46.12 (after test of 60-period EMA) Exited 200 shares @ $46.39 Trade 3: Long 500 shares of SPXL @ $46.08 as bar44 touched the VWAP EMA, hoping for a bounce, and gap closure back up to the bar39 low. Result: the bounce came, but was short lived, and I got nervous and exited on bar48 @45.97, right before the market reversed in the original direction I was hoping for up to bar53. Trade 4: Long 575 shares of SPXL @ $45.76 near the bar58 close. Result: took small profit @ $45.94 on bar61 (2nd leg up, most bars below 20EMA, so better not to hold long positions too long hoping for more profit from the long side than is available in a bear trend) Trade 5: Long 679 shares of SPXL @ $45.31 during bar70 (3 pushes down, bear channel overshoot/wedge failure, hoping for a reversal up. Result: took small profit @ $45.43 during bar76. Felt fortunate to get a profit off this trade. Thanks for reading.
Wednesday 2/20/2018: Trade 1: Long 521 SPXL @ $45.93 as bar8 was forming, hoping for a bounce off the VWAP& 60EMA. Result: Took profit equal to 1X risk (using bar8 width to define 1X) @ $46.24 as bar15 was forming. In retrospect, when seeing the consecutive bull bars13-15 I should have suspected we could get more up and should have held for 2X profit rather than 1X. Trade 2: Long 1000 SPXL @ $46.06 as bar37 closed. 3rd reversal attempt/wedge buy/EMA gap bar1 after pullback from the HoD. Result: Took profit equal to 1X risk (using bar36 low to bar37 high to determine risk) @ $46.15 as bar39 was forming. In retrospect, once again this trade went much further than I was expecting and I could have held to make profit in excess of 6X risk (also the Fed minutes bull spike is atypical). Nice to make profits, but I should have held the trades longer in hindsight. Optimal trades today- With the benefit of hindsight, the following were all good trades today: Buying 1-tick above bar1 and looking to make 1x - somewhat risky Buying 1-tick above bar10 (H2 buy at VWAP test), and holding to make 1x or 2x risk Buying 1-tick above bar22 (H1 buy at 20EMA test) and holding for 1x or 2x Selling 1-tick below bar63 and holding for a swing down (I thought of taking this trade but didn't because it felt like I was fading a strong trend and I am trying to avoid doing that). Thanks for reading.
Thursday 2/22/2018: Took 3 trades today, made money on 1 of them. Finished the day in the red. Trade 1: Long 536 shares of SPXL @ $45.17 as bar6 was forming. Hoping for failed bear BO /reversal up after testing below the bar1 low. Result: Took profit @ $45.47 near the high of bar8. In retrospect, I should have held at least part of this position for a swing because the market topped out @ $46.10. I was nervous to do that though, because at the time I entered the trade, price was below the 20EMA and VWAP and my fear was that price would hit resistance once it got there (which it did). However, I should have been more patient (just like yesterday) and realized that even if price failed at the EMA, we would still likely get some sort of 2nd leg up attempt, which we did (again, just like yesterday). I'm not sure if I did the wrong thing managing this trade today, considering the EMAs above price. Best SPXL trades today in retrospect: Buying 1-tick above bar6, hold for 2X move up Buying 1- tick above bar11, hold for 1X move up Buying 1-tick above bar14, hold for 1X move up Buying 1-tick below bar17, betting the bear reversal would fail. Buying 1-tick above bar19, pullback to EMA. Buying 1-tick above bar26, hold for 1X Shorting 1-tick below bar36, holding for at least 2X down Shorting 1-tick below bar62, (EMA gap 1 short) holding for at least 2X down Buying with a limit order at YL, hoping for a bounce, which happened at the EoD. Trade 2: Long 160 TQQQ @ $162.52 as bar38 was forming and scaled into another 150 TQQQ @ 161.43 as bar41 was forming, hoping that this was just a bear trap (EMA gap bar 1) and that we would reverse back up into the bull trend. Result: puked the entire position up at an average of $159.80, which was close to the bottom tick and the market reverse back higher from there (although the bull reversal failed as well). I think the initial premise wasn't bad for a long position, but I should have waited the bull bar to form first, and then place my by entry above it on a stop rather than trying to guess a bottom. Even on my earlier profitable trade today, I would have made just as much money if I had waited for the bull bar to first form and then buy above it rather than guessing at a bottom. If I had to do things over again, I would have bought 1-tick above bar41, and then scaled in 1-tick above bar53 and exited the entire position at my initial bar41 entry point. And as you can see, that very spot was where the market reached and then turned back down. Anyway - I'm kind of pissed at myself over today. I had a good trade this morning that I exited too quickly. And I had a bad trade this afternoon that I stayed in too long, and entered poorly. Hopefully today's lesson sticks in my mind going forward. Thanks for reading.