I've never been good with keeping a journal in the past. Even if people don't read this journal, the fact that they can is a motivation for me to keep it updated. Some background, I'm 19 and trade a small account. I'm mostly a swing trader doing technical analysis and chart reading and I tend to have a short bias. My market is options on large cap stocks, mostly in the S&P 500, SPY, or USO occasionally. Usually I'll make profits for a few weeks before losing them due to bad risk management. I specifically want to focus on improving my risk management and work on the psychological factors of my trading too. Things I need to improve 1. Patience- I have a really hard time sitting on the sidelines with cash and just watching things play out. I always want to be trading but this hurts my performance. I really need to work on waiting for the right entry and letting some get away without me because there wasn't a good entry. 2. Impulse and over-trading -I will occasionally put on impulse trades or try to day trade. This usually just gives me small loses and once in a while a big winner, but is a losing strategy for me in general. I need to only make trades I plan out the night before and not try to participate in every intra-day move.
Hope you don't mind if i jump in with some thoughts that may help.Every trader encounters the same problems that you identify.For me personally,what really got through to me in the end was the pain of losing money once too often.Impatience,overtrading,revenge trading,trading for the sake of just doing something instead of trading your plan.Nobody can be in the market and right all the time but it's probably human nature to want to be in and winning constantly-greed basically.What i try to do to combat these weaknesses is reprogram my mind to a imagine myself as a predator.Like most predators one deadly effective strike excecuted at the right time is enough for the day.Imagine the market fears you because you are dangerous-you will only strike when the market is vulnerable.On the other,hand imagine it laughing at you as you go to click buy/sell when you know you shouldn't really!Greed is always there it cannot be conquered only contained.Try turning that on it's head by looking at it another way.This trade you're looking at now, how much are you gonna get out of it-is it enough? enough to justify the risk,or will a bigger,fatter,weaker victim usually appear later?.I just try to visualise myself as a cold blooded sniper rather than charging at the enemy with a machine gun(unless you got him on the run-which in trading terms means building the position,trailing your stops).Pain teaches you not to do something and i dont think you can really crack it until the pain of losing teaches you to respect the market.If cheetas didn't respect their prey,wouldn't they just stroll over and grab one?-that's what you're trying to do.I think things get easier to control after that point simply because you just know the worst is behind you and you can feel yourself going to the next level.There are three possible positions you can take at any one time;long,short or nothing.Doing nothing is a position.Its a position real pro's are ready to use all the time.Just trying to give you another angle rather than the usual lecture on discipline,stops,cutting losses etc
Thanks for insight. That is really how I'm trying to view it now. Just a sniper hiding in a tree, waiting for the perfect shot. And not having to shoot unless I see exactly what I want. That's how I should have been viewing the markets all along. I trade for myself and don't need to trade unless I see a great set-up. It's one of the other counter-intuitive things about the market, the more you trade the less you make.
Didn't have much time for charts this weekend. Setups I might play tomorrow. Just trading 1 option for now. 1. WB- If it comes down a bit and holds the short-trend line I'll buy a call and look for an exit around the 50-day SMA. 2. AET- Trading in a nice range. If it doesn't gap I'll buy a call at the open and look to get out around 44. Stop out at 41.50. 3. USO- A bit of descending triangle forming. Buy a put around 85.60-85.75. Tight stop, exit at 80. 4. XOM- Looks weak, maybe a pullback to the trendline from 1/23. I'm not going to play this one because I didn't see a clear place to stop out.
BUY +1 AET 100 MAY 08:45 CALL @1.25 LMT NYSE. stop loss: SELL -1 AET 100 MAY 08 45 CALL MKT GTC WHEN AET MARK AT OR BELOW 41.50 Got in a bit earlier on that one. USO gapped up too much. Waiting for WB to pull back more. At 27.68 now. Going to class. Here's the order for WB BUY +1 WB 100 MAY 08 27.5 CALL MKT GTC WHEN WB MARK AT OR BELOW 27.45 and the stop SELL -1 WB 100 MAY 08 27.5 CALL MKT GTC TRG WHEN WB MARK AT OR BELOW 26.95
1:27 - BUY +1 BMC 100 APR 08 30 CALL @1.55 LMT NYSE BSC trading around 31.08. Around 30.92 looks like support. Stopping out at 30.85 Edit: Briefly hit 30.85 and got stopped out. Should have had a looser stop. Might renter later
2:20 BUY +1 BMC 100 AUG 08 35 CALL @1.30 LMT PHLX SELL -1 BMC 100 AUG 08 35 CALL MKT GTC WHEN BMC MARK AT OR BELOW 30.75
9:41 BUY +1 X 100 APR 08 125 PUT @.80 LMT PHLX X was trading just under 146. I had to buy a cheap option because I don't have much DTBP. So this will be a short term trade since the theta is so high.