Simple Trading Journal

Discussion in 'Journals' started by JohnK, Feb 2, 2004.

  1. JohnK


    I decided to post my trades here, because sometimes I let a lot of time go by without taking a second look to see where I've been and how I got here and what lessons I've learned. Certainly, it would be great if/when some questions or feedback are posted in this thread and some decent and civilized discussion follows.

    I trade stocks, options and futures for several accounts (my own) and employ a different approach for each account. Here I will present stock trades that last 1-5 days on average for an account that is currently in the low six figures. The methodology I use is simple: take action based on the price pattern in conjunction with the behavior of some standard indicators, like MA crossovers, volume, etc, but always confirm the trade with MACD and Stochastics. There must be at least twenty well known trading books available out there that present variations of this methodology -- and I like all of them. As in many things in life, the question is how well can such a simple technique be implemented in real time, down at the trenches.

    I have taken most of the popular trading seminars and do use some of the best trading tools and services offered to individual traders like myself. These tools and services are discussed (and, very often, fought over) in other threads on this board. However, I will not get into any of that, because I don't like to participate in any discussion that starts from a suspicion that something is being sold in this thread or presented in any biased way. This is meant to be just a personal trading journal, not a sales pitch or a sermon of some sort.

    Nevertheless, even without the controversy and fireworks of the usual trading approach/trading tool religious arguments, I do hope this journal will prove to be interesting to some fellow traders, maybe even useful. I know it'll be useful to me. If not, as soon as my stoploss is hit, I'll exit :)

    To get down to specifics now, here, in a nutshell, is what I do:

    a. Evaluate market direction;
    b. Enter on the basis of the daily charts, usually both long and short, but weighted according to the anticipated market direction;
    c. Manage trades loosely intraday via simple indicator crossovers and divergences;
    d. Set stoploss and partial profit targets based on the chart, never more than a few percent;
    e. Trail the rest.

    Here are the positions I initiated this morning:

    ALTH LONG $3.6 RISK ~.4
    ITRA LONG $2.14 RISK ~ .4
    TRB LONG $51.11 RISK ~2.4
    PEGS SHORT $10.93 RISK ~.5
    AVCT SHORT $36.67 RISK ~2.0
    TTWO SHORT $29.82 RISK ~1.8
    MYL SHORT $24.67 RISK ~1.0

    Let's see what happens :)
  2. JohnK


    Ok, so far so good, the positions I initiated yesterday are doing fairly well. Of course, the account had other established positions as well, but they are not shown or discussed here. Gradually, as the pre-existing positions are phased out, this journal will be showing the full picture of what's happening with this account.

    I exited 4 of the 7 positions yesterday and or early this morning:

    AVCT SHORT OUT AVG. $35.67 +1
    MYL SHORT OUT AVG. $24.17 +.5 (partial exit)
    ALTH LONG OUT AVG. $4.2 +.6
    TRB LONG OUT AVG. $52.65 +1.54

    I initiated 3 more positions this morning:

    UPC SHORT $29.88
    DHOM SHORT $28.7
    SVC SHORT $13.99

    Let's see what'll happen with these - wish me good luck :)
  3. JohnK


    I exited a couple of my positions yesterday:

    DHOM SHORT OUT AVG. $29.7 -1 (SL HIT)

    And I initiated 3 more positions this morning:

    ALOY LONG $5.5 RISK ~.3
    FULT SHORT $21.67 RISK ~1
    BCRX SHORT 6.65 RISK ~.4

    Let's see what happens now...

    The account is up from this past Monday :)
  4. saico


    Nice green overall, John! Picked up your UPC trade, because of the nice short sell chart setup. Keep it up!

  5. JohnK


    Thanks saico,

    Just shorted NT at $7.83, risk ~.40, hoping that the stock will close the recent gap up...
  6. JohnK


    Again, I exited a few of my positions yesterday and this morning:

    NT SHORT EXIT AVG. @ $7.43 +.40
    FULT SHORT EXIT AVG. @ $21.27 +.40 (PARTIAL)
    TTWO SHORT EXIT AVG. @ $28.52 +1.30
    UPC SHORT EXIT AVG. @ $29.48 +.4 (PARTIAL)
    SVC SHORT EXIT AVG. @ $13.29 +.70 (PARTIAL)
    MYL SHORT EXIT AVG. @ $24.37 + .30
    PEGS SHORT EXIT AVG. @ $10.90 +.15 (PARTIAL)
    BCRX SHORT EXIT AVG. @ $7.01 -.30
    ITRA LONG EXIT AVG. @ $1.99 - .15

    And I initiated 3 more positions this morning:

    PRSF SHORT $7.04 RISK ~.3
    STFC SHORT $23.9 RISK ~.9
    ROST LONG $28.45 RISK ~.8

    Well, let's see what happens now...

    The good news is, of course, that the account is still (further) up from this past Monday :)
  7. You mentioned in your first post:

    >c. Manage trades loosely intraday via simple indicator >crossovers and divergences;

    What do you mean by 'manage trades loosely intraday'?

    It just seems that you have several positions, especially when going short that would need more than 'loose' attention.

    Just curious.

    And, maybe I missed it, but how are you calculating your risk?

  8. JohnK



    I do follow my trades intraday, using the 15, 30 and 60 min charts and one of my trading tools. But I don't intervene much,especially during the first day, unless I see a sizable move that appears to be unsustainable (in which case I exit and prepare to go back to the well next day.)

    At least, that's the theory... that's what I want to do, but... I often change my mind near the end of the day and exit positions to lock in profit, especially if the current profit exceeds the amount of risk I had originally seen in the trade.

    You see, my trading (training and) career started as a daytrader, fast moving Nasdaq stocks, Level II, etc, until the decimalization disaster nearly killed that comfy profession (stock scalping.) So, it's hard for me to trade exclusively off the daily charts. In that respect, this journal is documenting my (reluctant and slow) progress in learning how to be a bit more patient, work with the dailies and, when appropriate, perhaps even the weeklies (booooooring!! :) )

    In assessing risk, I look at the daily chart and spot the previous pivot, which I use to estimate risk. Unless of course that gives me a number of more that 3-4% of the stock's price, in which case I use the 60 min chart... or, if it's a cheap stock, I just eyeball the situation and assign a, more or less, arbitrary amount of $.30 to $.50 etc. I say arbitrary, but I've been trading for a while, quite successfully most of the time, and it's an educated guess, not a stupid thing.

    The other way I use to manage risk is, of course, to adjust the size of the bet and size of the partial exit(s). The ideal here is to always bet an equal amount of money, more or less, not an equal number of shares. But, as the stock becomes cheaper and the risk grows in terms of % of price, adjusting the size of the bet downwards is a useful escape from too much risk.

    My stoplosses are never written in stone: sometimes they are in the system and sometimes they are in my head or written on postits attached to my monitors, but I always follow the situation in real time and act accordingly when I think I have to.
  9. JohnK


    I just heard a quote that I had heard before, but it now made new sense to me in terms of trading and taking risk, always being exposed to the ups and downs of the market:

    "A ship is safer in the harbor, but that's not what ships were built for."

    Maybe it's because, as I grow older, more things make sense to me now than they used to... :)
  10. Thanks for the explanation about your trading. I'm just getting started, like little league vs. professional league, a big difference!

    Nice quote. Here is another one I had heard years ago, applicable in many ways.

    "Calm seas never made great captains."

    #10     Feb 5, 2004