NoDoji's Day Trading Log

NoDoji

I've been following your journal since January. It's been very informative and entertaining until recently. You had me worried you were in a deep funk. But unless there is an impostor elsewhere on the net, I see you are still trading away. I'm pretty sure it is you because of the sense of humor. Friday you were wearing a tin foil hat to protect you from the guys at GS.

 

95% of what I do is try to catch the "meat" of the intraday swings / runs . . . (the whole intra-bar breakout thing is a single technique to get in on part of a more "parabolic" move without chasing price when there isn't much of a discernible retracement - part of the other 5%).

I also agree that "scalping" is tough and leads eventually to overtrading and taking inappropriate risks to come back from a string of losers.

When it comes to winning percentages, reward/risk analysis, etc, I've attached a worksheet as an additional contribution to this thread. It's one method to evaluate positive expectancy of different approaches. I expanded it based on a like article in Futures Mag several months back (after correcting formula mistakes). It assumes that you have some working knowledge or transactional data to work from, but it's a quick way to do a comparison on multiple approaches.

 

I really want to thank everyone for much good advice and many ideas.

And yes, I felt like I was wearing a tin foil hat yesterday. When my best setup of the morning was not shortable, and when ES reached long/short triggers and pulling its head back in at the edges of channels on a Friday, I couldn't see another huge rally coming, and I couldn't see any reason for the market to dump, so I had no inclination to trade further unless something were to pop out at me.

Since the market seemed more strong than weak overall, what I did do was watch every test of highs on stocks that have shown strength lately. I figured their overbought status after multi-day runs meant a lot of short positions were on and there was some solid scalping to be made on breakouts as buy stops were hit, driving price up further for a brief period of time. I actually came close to trading these setups live with small lots, but my experience is limited, so I just watched the action. It was all good, adding another tactic to my arsenal.

I'm stubborn and my stubbornness is costing me. I'm having a lot of trouble shaking "ideas" that have been stuck in my head after trading a particular way for a long time. It's great when the market complies, but when things change, you need to adapt and by studying different strategies and gaining confidence in them, you have more to work with.

 

metoo,

Thanks for the information. I'm familiar with TradeStation, but it took me 6 months of urging by many people to get me to open an IB account, so I doubt I'll be changing again soon.

IB has worked flawlessly for me. I continue to use PowerEtradePro for my watch list of stock charts, but I started using IB's chart for ES last week and it appears to update in perfect sync with the pricing on the DOM all in real time as far as I can tell.

My husband trades infrequently, but he also uses IB and recently his platform froze up a few times. He troubleshot it and found out his video card was causing the problems.

So if you're having problems with IB I don't think it's IB, but something with your computer.

 

- $12

ES b/o range long @ 978.00 and short @ 972.50. I was an observer today because of housing news. A long @ 978.00 was good for a scratch. On the reversal, a short @ 972.50 was good for about 3 pts. From watching the action on news, I came to the conclusion that placing bracketed stop orders on either side of the bar leading into the 10:00 a.m. news produced the greatest profit opportunity, providing a 4 pt move to the upside today, followed by a solid low-risk short around 977.50 on a pullback from the upper channel when the rally failed quickly, this one good for an 8 pt move before reversing.

Very solid support was established around 969.00, setting up a low risk long entry.

After that I watched ES trading in a range, good for quite a bit of 2 pt scalping which I didn’t do.

While watching ES, I tested a few stock strategies with 100-share lots.

First trade was an example of pure bad trading. ESRX was on my short watch and it bounced around on open, establishing a narrow range. I planned to short it on a breakdown through the opening low (70.24), because I’ve been paper trading these range breakouts and they’ve been very solid.

Instead of wisely placing a sell stop just below that price, I started watching ES again. After a while I glanced at ESRX and it was crashing hard. I was angry I didn’t stay focused and the fact I missed the train caused me to chase entry almost at the bottom, when it was hugely oversold. I figured it would crash another dollar like it often does when it decides to crash, instead of stepping aside and waiting for a new setup. It was awful discipline on my part and a total violation of my rules. I put in a .50 cent stop figuring a ride back up to the 10-period MA was as far as I was willing to go. The spike on housing news took me out for -$48

CTRP broke down its LOD, made a new low @ 48.14, attempted a weak rally, leaving a significantly lower high and I shorted @ 48.17 as it rapidly approached the LOD. I didn’t wait because the downside momentum was strong. I kept a very wide stop because price was jumpy as all heck with a very wide spread. I trailed a limit which was lifted at the absolute LOD for a $62 gain. This was an example of HOW IT’S DONE RIGHT!

FUQI had wide opening swings and I wanted to catch the break out of its midday consolidation, figuring a break down would amount to a .60 cent move on a retest of lows. I chose breakdown because during the tight range it left behind lower highs and lower lows. I shorted @ 23.26 with a stop above the previous resistance spike that had sold off quickly. Eventually it left behind higher lows, narrowed its range and broke to the upside for -$25. My only criticism of this trade is that I didn’t set a double stop, which would’ve placed me long for a .30 move to the upside.

CL set up small intraday bull flag and came to a total price standoff. I went long @ 74.90, stop @ 74.88 at the MA line. The market broke out, but CL did not; despite a bit of buying volume, price didn’t budge. Price stayed unchanged for almost 30 minutes and finally broke to the upside. Hit 75.00 and fell right back, taking me out for -$1. False break out, but low risk, which is the nice thing about this breakout strategy. I had to laugh that the consolidation was so tight that a .02 cent stop on a $75 stock did not trigger. However, that was the very reason I felt confident placing the stop that close.

I was a ticked off that I didn’t place JAZZ on my breakout watch after it hit the high ticker earlier this morning. Late in the day it broke through HOD for an amazing and very fast breakout move (which went on after hours).

I’ll be continuing to trade these breakout/breakdown setups with small size until I’m comfortable with stops, exits and overall trade management. I have found this to now be my preferred method of trading because it puts you in a trade in the direction of strength or weakness on momentum.

Today would’ve been overall profitable had I not violated my rule and chased an entry at the worst possible time. I really thought I was over that.

 

Get that e*trade chart outta here!!!!! lol

 

Yep, on many days in ES the days top or bottom can be printed very early.

The days "INITIAL" run is what everyone is looking for. When price starts to move the big dogs will get off the porch.

http://www.youtube.com/watch?v=UPI1nAqkpLQ

 

Only paper traded today, continuing to gain confidence in new styles of trading as well as in ES action.

ES opening range long signal 975.00, short signal 970.25. Long signal triggered first, good for a 4 pt move.

Pullback from high and failed retest pushed price back under the upper channel line, offering a low-risk short entry @ 977.75 (2 pt stop places you above the HOD; I like that kind play).

I realize I would’ve taken my profits at the lower channel line (973.50), but if I had the balls to stay in the trade as long no 50% retracement occurred (it didn’t), I would have had an additional 7 pts of meat to slice from (I know, I know, I’m veggie, but catching the "tofu" of the move just doesn't capture the essence of trading IMHO).

There was some range good for scalping 2-3 pt moves, then breakout to the upside off a higher low @ 967.50, good for about 10 pts of meat.

I also paper traded breakouts on stocks: POT to the downside, and ORLY, MFE, MAS and ESRX to the upside.

Difficult determining which time frame works best, but it seems that 5 min chart provides less noise and more survivable stops for these plays.

Late in the day LH came to my attention in chat as it sold off hard. One look at the intraday showed a beautiful consolidation in a range on low volume the entire day before the break down. A sell stop below the low of the range (or below the LOD) would’ve been triggered on the break and provided almost 3.00/share move down before bouncing. Just a couple of these a month can add a huge boost to the P&L!

 

A small incomplete recap of todays ES. All times are eastern time zone for the bars. This is for recap only, maybe i traded all this and more maybe i did not. this is just a short synopsis of some of what i was up to today and most days.

0930 opens @972.25.
0935 opens @ 972.75 so +6 = 974.25 and -6 = 971.25.
Long @974.50, sell at 976.50 @ 0940 bar = +2 handles. Exited was to early.
Because was out to early and witnessed a KEY bar at close of the 0955 bar i went Short 1 tick below the KEY reversal bar after the confidence number, So Short was at 975.00, exited at 972.00 after the KEY bar at 1015 showed the then days low. missed a 5'er handle trade on that one.

Price failed to take out yesterdays low at 969.0, came close at 969.50 though so all eyes were on that 969.00 as next support test.
did no DEAD ZONE trading this time as price advanced up to now defunct +6 line and took no long at 1045 bar.
Price tap danced for 2 bars and the second bar closed on it's low at 973.00, that was at 1100.

The 1100 bar was a short at 972.00 expecting another test of that yesterday 969.00 low.
The 1130 bar was a ring the register at 967.00 after the previous bar at 1125 broke below the 969 support and closed on it's low. That was good for 5 handles.

Now i expected a retest of the 969.00 previous support as resist. the next bar was the then low of 966.00 and was expecting a retest of 969.00 as the bulls showed some moxie because 966.00 and the next bar showed no followthrough to downside.

So the "SITUATION AWARENESS" of the battle was a Long above 969'ish and a short below the 966.00 low. The low at 966.00 was never really a worry now as price again tap danced around 969 area and you just knew all eyeballs were watching that level.. you can believe the bulls were looking for a BO to upside with some mustard. keep in mind it is lunch time now and thats water cooler grab ass time.

970.00 was breached 3 times but no conviction.
Finally at 1300 bar we got a clue to be alert as the bar closed on it's low at 967.50.
The 1305 bar KEY reversed up to 969.50 and the last new shorts were now dog food. Then the bulls were in charge as they took out the 970.50 consolidation of lunch time aon the 1320 bar.

That was the bar to get long for the BO, price never went below the 970 50 lunch time range high after that. The BO was good for a minimum of 5 more handles before any real clue to get nervous on your long.

I was not focused after that for the day.
just focus on ES and the mystery goes away.

 

+ $29

I watched ES in pre-market react to the durable goods news, and figured there’d be times when I’d like to take advantage of after hours trading. My concern was whether stops work after hours (they don’t work with stocks AH), so I checked the configuration in IB, set STP orders to trigger outside regular trading hours, and tested with an order, shorting @ 969.25 and placing a stop @ 969.50. Price dropped a few ticks, but bounced back up to my stop before I could move the stop to capture a few dollars on the test, but at least I know stops work just fine and I’d be comfortable trading after hours. -$17.30 (Ironically, this was a good trade and I should've put it right back on!)

Short X @ 38.85 on gap down strategy, breakdown from gap off the open, covered @ 38.51 for +$32. I planned to replay this stock, but decided to paper trade all my ES signals, and determine how to best manage stops and exits. Had I just kept the original X short on most of the day, it would’ve returned almost $160 on just 100 shares.

Later, looked at MACD histogram on a chart because I read about it in Elder's book and was curious to see it. I shorted short CL @ 75.53, pullback from near previous resistance, when the MACD hist was at the top of a mountain (looked good as a short signal earlier). Covered @ 75.37 based on price at the trend line, MACD hist in the valley, and stochastics oversold, out just .04 cents from the pivot low, for +$14.

After the open ES hit my short trigger, but bounced so quickly that I had no interest in shorting.

Today I carefully noted all my short and long ES signals and determined that a 2 pt stop would work every time, keeping me solidly in all trades worth staying in. The most difficult issue I face is managing exits, being careful not to move a stop to b/e too soon, and most of all being able to stay in a trade when a trend is established. These will be my greatest hurdles.

I decided tomorrow I will do the Mark Douglas 20-trade exercise. Not sure if I’ll get a full 20, but I have to take every signal. If 5 trades fail, I will take the rest of the day off and look for a job. I realized that my technical signals combined with solid risk management have never failed me on paper because I take all the signals. If I pick and choose I’m likely to take the worst trades.

A little after 2:00 p.m. today I was chatting with a fellow trader and I thought I’d include this excerpt from the conversation just so ya’ll can see inside my head just how my “thoughts” sabotage my ability to trade my signals:

FT: “Can’t go long with this bearish sentiment”

NoD: “Those are the kind of thoughts that today have kept me out of many profitable ES trades. Seriously, I could’ve gone long ES 4 times today based on technicals and nothing else and made great money, even though the day seems very bearish.”

FT: “The day IS bearish as of now. Most volume on the sell side.”

NoD: “I agree.”

FT: “SPY looking really heavy here.”

NoD: “Yes it is.”

FT: “Which probably means it’s about to snap back.”

NoD: “It looks heavy and my thoughts say to short, but the technical signal is long.” (The long signal here was @ 966.25)

Price quickly moved up and hit 970.50 before pulling back.

This is the mental block I face day after day. I could teach a 6-year-old to trade my signals and s/he’d do it every time. But I can’t seem to fight through my own market bias to do the same.