NoDoji's Day Trading Log

Excellent post, hog. Got me thinking...

 

Thanks, metoo, for your encouragement!

Every day I watch those big dogs sniffing and ask "Will they lift their leg??" And they do more often than not! I have to laugh every time, not just ES S/R levels but when stocks I'm watching are about to test highs or lows.

Tonight I finally pinpointed the mental block I have against the whole trend following modality. Hog really put it out there with the description of the commercial: "the little girl on the bicycle that was confined to riding the bike in a confined little space comes on."

Trading a range feels safe (you have a net to "catch" you on either side); jumping into what appears to be a reversal feels safe; you have the S/R level right there to "catch" you.

But jumping into a breakout is scary; the very nature of it is that an S/R level has been broken and you are in a free fall, which is not a bad thing, but where is the net when price seems "too high" or "too low"? It's purely psychological.

 

it is really a big jump. after this leap, you will not be able to see any range-band any more,i.e., you could not trade range-band any more. that is human nature. at first several yaers, I did lots of fading, I just play those no-where stocks with enought liqidity, I made lots of money. then I changed to break-out or chasing trading, my profit did not improve a lot since I could not trade range-band any more, while lots of the time the market just stuck there or consolidate or pull-back or rest a while, but I may force several breakout trades there, even cut loss accordingly, I still got hurt. congrtulations, you are now ready to do chasing trading.


find some individual stocks, look at daily/weekly chart, carefully exam chart pattern and study fundamentally, patienly waited there to trade the breakout/breakdown, then sit tight, with a small size.

ES is a little bit oversize for you currently, if wrong, 3points means 150+. plus many time ES did not trend well in a day session, you need find somethig everyday trends (I jump around for new symbol)

 

we may call fading trading style as dog-peddle swim

then millow? do some pullback buy/sell in a strong trend
then fish? do some double bottom buy/double top sell or 123 buy/sell

then shark? jump in a strong trend without thinking about "too high" "toolow" "the right chart pattern" "the right fundamental"..., just the direction

most swimmers follow those step by step. a good swimmer will do all of them freely

 

Hey Nod,

I have been going through a similar trading situation. I made this note to myself and my assistant. Perhaps it will help you! If you feel I'm imposing on your journal please let me know.

Each trader has their own methodology. No doubt many love range trading and profit greatly from it. I personally, despise trading ranges and have figured out why. Ranges have cost me plenty due to my inexpeience. This probably has been my biggest issue in the past, regarding losses, yet I still struggle to relate to them and act accordingly. I read something long ago that a wise trader said, that still rings loudly in my mind, "don't diddle in the middle". In oter words avoid trading ranges.

Right now, for me, I must avoid range trading! This area is where I am most vulnerable but if I want to become a good trader I must learn to spot and avoid ranges. I need to focus on nothing smaller than a fifteen minute time frame. I could accomplish this by closing smaller time frame charts and only opening them for entries and exits. I seem to not relate properly to trading ranges. I can't tell you how many times I left hundreds of dollars on the table because, I guess, it simply doesn't appeal to me to trade for small returns. I do suppose hovever much could be made by exploiting the very top or bottom of a range but for now, I must chnage and focus on what fits my personality.

As I reflect back in time, I suppose I got a taste of steak and lobster versus eating beans. Yes, back in the day, AOL, JDSU days, when interent related stocks were all the rage. I got a good taste of mementum trading. I had some really nice returns in those days but it was not because I was a good trader. Heck, all a person had to do then was buy an internet stock and it went straight up. So I guess what I'm saying is after having tasted steak and lobster, I'm not interested in rice any more. Is this pride or wisdom, I don't know? Which would you prefer?

It further interest me that the pennant formation on EU is still intact. If I am correct and it breaks to the upside this will be a significant move up of about 150 pips. Now I'll admit I don't understand the correlation between the EU and our indicies but I have noticed that our indicies seem to follow the move on EU. So as one person said " get ready, get ready, get ready!". You are destined for greatness!

 

that is true. after you taste something really good, you will discard the old food as bad. but the odd is: you will come back late and say the old food tastes better again after you are sick of the new food. you can eat atresturant everyday, but one day you found the food youcooked byyourself is the best and the most nutritious

there is a saying: after three days, the newly built toliet will not smell good.

people always think the things they did not get are better, but the truth is there is no better, just difference.

buy a momenten, then the sitting tight is very hard to many people, can you sleep tight overnight if you have overnight positions? no, bad news will totally change the trend.

I do no tmean you should not learn it, I mean you should be realistic or objective. if the market in long time range-band, what should you do? do you ask the market to trend? most likely you will force out lots of fake breakout!

there is a saying: know yourself and know your enemy, you can defeat your enemy 99%time. be objective to yourself and your market

 

did you trade AIG today, breakout perfectly

 

Perfect breakout from yesterday's high (never looked back) and then another above it's opening HOD, and then another textbook break out of consolidation! That was the point it came to my attention and I decided AIG is going on my active list for those fantastic moves!

 

- $95

Very frustrating day, based on making the same errors I firmly thought I’d overcome by having written rules, but obviously I need to say the rules aloud 3 times each morning, because out of sight out of mind is the problem.

Here are my rule violations today:

1) did not take my opening ES signal

2) did not take my opening ES signal despite a second confirmed opportunity

3) chased a trade and entered at an absolutely inexcusable price

4) allowed previous trades to influence a new trade

5) As a result of #4, I exited a trade before it reached my stop above previous resistance, assuming it was headed there anyway

6) As usual I ignore my Hand of God trade idea that comes to me each morning

Let’s start with the Hand of God trade idea: Every morning a stock trade idea pops into my head. It must be a subconscious feed from action I’ve seen over time or the previous day, but whatever it is, it seems to happen every morning and I’ve now come to believe these are the Hand of God trades that I should be taking without question.

This morning it was ESRX. Something told me to go long ESRX. I completely ignored this intuitive feed, as I’ve ignored so many in the past. (I don’t always ignore them; I’ve taken a few and they’ve all been nicely profitable. I’m a slow learner though.) ESRX came back onto my radar when I noticed saw it hitting the high ticker. And again my fear of jumping on board kept me out of a nearly $2/share trajectory up.

Then I didn’t take my ES opening long signal @ 999.00. I had a second chance to take it and didn’t trade it then either. After all the great advice I’ve gotten on this thread, and while I’m reading Al Brooks book, too, you’d think that this wouldn’t happen.

Yet here’s what happened. The entry trigger price of 999.00 was fast approaching and I thought, “Well, the job numbers were bad so I’ll wait for confirmation of the long.” ES rose a tad, then pulled back just near that trigger price and winked at me from across the dance floor and said, “Come on, Doj, have a long dance with me.” And I thought, “Those job numbers were bad, I don’t think this market can dance, I’m not trading ES today.”

Price action.

Sit in a dark room and ignore the news. Just let the price action tell you what to do.

What a huge and difficult lesson to get into my head. I’m not giving up yet though, because I keep thinking I see a tiny sliver of light at the end of the tunnel…

So I decided to do some stock trading.

Short TGT @ 45.14, covered @ 45.10 when the move didn’t materialize: + $14. Not a bad idea, and a solid exit based on price action at the moment.

Short TGT again @ 45.21, covered @ 45.20 for b/e when again the move didn’t materialize. Again, not a bad setup, but no follow through and I decided to re-evaluate.

Short TGT @ 45.15 when it appeared to weaken, covered @ 45.12 when the move didn’t materialize: +$10

Short TGT @ 45.18, got partial fill, covered @ 45.14 when once again it stalled: +$9

Now the fact that I had several scratch trades tallying a mere $33 influenced my next trade. TGT started falling a bit again and I was pissed I didn’t just hold one of my earlier shorts. “Now it’s finally breaking down" I thought and jumped into another short WITHOUT LOOKING. As soon as the trade was on, I noticed that not only was it oversold at this level, but it was at a strong support level for the day and I entered the trade without waiting for a break down through that level! And because the other trades were all scratched and price eventually fell, I let that influence me and I placed a stop much higher than I normally would have and ended up losing $68!

Then I lost focus altogether and got a bite to eat instead of watching the new action, thereby missing the very best short entry of the day at the double top. This is an ongoing problem for me. Scratch trades are OK, they generally leave you at b/e or close to it, so once you catch the real move you win! But you have to stay focused.

Later on in the day I shorted TGT again down near that earlier support level figuring for sure it would break down now, and ended up scratching it when I realized (again checking the chart after the fact) it had formed an internal double bottom: - $10

Short X @ 43.70 on weakness and covered @ 43.69 for b/e when the move didn’t materialize.

Short X @ 43.68, pullback from lower high, and placed a stop just above previous resistance. As soon as I was in the trade I realized that the chart setup was not very high probability, because there was also a higher low (I’ve overlooked this a few times in the past). So I expected nothing more than a scalp, but I really thought it might break previous resistance and when it started to move up I exited PRIOR TO MY STOP, which turned out to be the exact high of that particular move and price then moved down to 43.55 and the trade would’ve indeed provided an acceptable scalp had I left it alone! - $50

These are the days that try a trader’s soul, but though I’m frustrated with myself, I’m not at all discouraged because at least my loss is the result of easily identified and correctable mistakes, not a result of ignorance.

 

sorry to hear your violations of your own rules.

do not punish yourself, do not be too strict to yourself. take it easy. there is no perfect thing in trading.

be positive to yourself, be nice to yourself, very important.

I once punished myself when I violated my own rules, but i found the punishment made things worse. my punishment is when I violated my rules, I withdrew money from trading account. after the withdrawing, I felt I did a bad trade and lost much, my confidene lost. this depression mode makes me hard to pull trigger or jump on the gun again... so be nice to yourself.

think a baby starts to learn walking and running, any improper walking/running is not so bad, as a baby's parent, we may encourage him while not discourage him to try walking/running