Enigmatics

The other thing I need to consider is that I trade an instrument that forces me to juggle time decay issues further compounding my ability to mentally handle trades involving dips and grinding. So the potential for downside has a second dimension that inheritently skews the risk/reward on every single trade. I definitely just need to focus on my 10-15% moves for now an re-evaluate later on. Maybe when I'm fully committed to not having relapses with these mistakes I can look to expand my trading.

Monday thru Wednesday were great. Today was craptastic (wiped out previous 3 days' gain). Exceeded my allowed trade total too. I always have my worst days > 3 trades. I need to committ to just sticking to the 10-15% pops I get near the day's early part of the session. That's what I do best. I can't handle anymore of this forward-back-forward-back etc etc. I just need to focus on building my confidence and the only way to do that is to stick to my bread and butter. It's scary how this self-control issue has arisen again. I really felt I was past that. Apparently not.

This is an example of an AAPL options(weekly) trade I punked out on too early. I was eyeballing that 519.10 low of the day as it made it's way down to it for the 3rd time and judging by other higher time frames (15min/60min) I felt as if the wedge broke and downside was coming to the S2 pivot at 515.51. That also happened to be the low of January 7th. The breach of that 519.10 level happens. I enter the trade and as usual the flush happens, but the merits of it gets tested. My experience is this happens a lot when you attempt to short new lows as that flush allows guys who were short much earlier than you to cover into it for profit. I force myself to sit thru it as the next 2 two minute candles poke above the 519.10 level. It begins to reject, suddenly I get a move down to 518 and I'm thinking I'm going to get my full target. Not quite yet though. The red bar at 13:50 puts in a long lower leg. The next bar opens above the close of that previous one and suddenly my orientation turns sour. I'm not good at dealing with grinding like that so my first inclination is to bail as I don't want to risk losing any of the profit I had made in the earlier portio of the day's session. I know that any kind of reversion could result in a 1-2 pt upside, which would mean a potential 10-20% loss with the way the deltas were on the options at that point. Sure enough, right smack after I sell, it breaks down. That lower 515 area gets hit, The puts I had bought at 2.98 went to 4.00. Another trade I couldn't force myself to sit thru for fear of losing the day's earlier profits. Slightly irritating suffocating my own trades like that.

Ya, it's most definitely emotionally related. There is no doubt about that one. My relationship with money is not a loosely-based or high-risk taker one since I never grew up with a lot of it ...... I know you've talked about that kind of thing in previous posts of yours.

That is EXACTLY how I feel about this. :dito

Well, again I'm trading for a living. That being said, I know successful traders who stopped making it about the $-factor and suddenly it turned everything around for them. They began making it about strictly conducting the trade. The major conflict happening right now is that I know I can conduct trades at a high win rate, but I'm not making the money I believe I could. Yet, I'm in this comfort zone with 3 contracts using only $600-$1200 risk. Commonly I'll be in my preferred setup, I see $200-$250 up on the unrealized gains on the first part of them move. Suddenly I get impulsive and have to take the easy money even though I know from God knows how many times I've traded this setup that there's more to the move. I convince myself that taking 2 contracts off and leaving 1 to ride isn't "worth it", but yet I'm very timid about raising my risk tolerance. Good question. Ultimately, I'd like to increase my holding time on my winners. But again that's a tricky situation because of the conflict I just previously described. Sometimes I think that if I used say 8 contracts, I wouldn't get so upset about not maxing out gains as aa quick 10%,15%,20% burst on that kind of capital would be stellar imo. Yet, I'm not mentally ready to handle a position with that much risk on the table. Ya, definitely trade-offs to each. As you said, the bread and butter trade is not the problem. However, it requires me to be willing to wait for it, which I sometimes do not do (as illustrated by the losing trade I posted about). There could be a day where the setup doesn't present itself or the range on AAPL isn't large enough to justify me using my normal conservative position sizes. Am I ok with that? So far I haven't acquiesced. Typically it takes some time for the trade to develop (often til around mid-day), but I often find myself being lured into the liquid portion of the first 15-20mins of trading. Perhaps if I was making the times when I get my setup count and I maximized them, I wouldn't mind trading less ..... My strength is definitely identifying the preferred setup and trading the first pop of it. That is without a doubt. It's just that I believe over the long haul (especially since I trade for a living) it limits the growth potential and is further compounded when I make mistakes Iike I did on Friday. I agree with you on the reviewing issue about hindsight confirmation bias. As we watch charts, they are evolving on a second to second basis. Every moment is unique and anything can happen. We are essentially managers of the unknown when you really think about it.

Trust me, I'm always motivated. I typically always review my trades, especially the losers and problem shoot what went wrong. In reviewing yesterday's trade, I'm really disappointed in my trading behavior in that moment, as well as trading on lousy signals. It's almost like that rookie trader from 3 years ago suddenly possessed me. You're right about "interrupting the thought process". I can remember sitting there watching the trade confirm that it had failed and I didn't stop out. I knew in that moment I needed to stop out. However, the mindset I carried into the day about not falling below "x-value" came into conflict with it. Suddenly I was below that value and that perilous hope holding took over.

Been a while since I've posted on here. I hope everyone has had a nice start to their 2013 and is propsering in their trading. At any rate, today was not a good day. In fact it was pathetic and I broke a number of my own rules. Prior to today's session I had been on a very nice 3.5 week run, but today's relapse cost me practically all of it. The first thing I want to touch upon is the mindset I carried into the trading day. It breaks down into two areas which my trading often comes into conflict with and boy did it rear it's ugly head. Let me know if this is familiar to any of you: #1 - I had a number today that I was "defending" in my mind. No matter what, I did not want to take a loss which would've brought me under "x-value". #2 - Even though I put on a nice 3.5 week performance, I left a lot of profit out there on the table in favor of the quick and easy ones. The irony of #1 is that not only did I fall below that number, I somehow convinced myself to hold a losing position and it got tremendously worse. I flat out ignored confirmation that my trade was a failure and that dreadful "hope" word crept into my mind instead of remaining systematic about the situation. It's that moment you lose mental control, thinking that if you take a loss here, there may not be another trade today to work your way back with or possibly go green. It didn't help that in the back of my mind I didn't want to fall below a certain accoutn value and in almost a self-sabotaging way I made it happen. Now onto #2. I constantly go back and forth with this issue. Even though I had been on a nice 3.5 week run, I was growing unsettled because of my inability to maximize positions. I swear, every single time I've gotten that mindset I've gotten smacked down by something like today's trading. So where am I going with all this? I dunno. It's part vent post because there's nobody in real life I can talk to about it, but I'm also seeking out advice for overcoming these issues. I trade for a living btw and I have one particular strategy that I know like the back of my hand. If I just wait for it, I have far better understanding of the expected reaction than any other setup I might try to trade. Today's loser trade was not that trade. I could almost tear my hair out thinking about it because I was up $180 on the position before it ran into an area I knew as potential resistance, but because of other chart factors and not maxing previous gains, I convinced myself to let it breathe even though my gut was screaming "TAKE TAKE TAKE TAKE". Ironically, later towards mid-day I got the perferred setup and I traded it for one of the largest single trade wins I've had lately, albeit I took a 30% gain on what turned out to be a 70% move. Why did it take me digging myself a gigantic hole just to get to it? It's happened before and it's baffling how my largest single wins are on the heels of crap trades. I have been in this trading bubble where I only feel comfortable using 3 contracts and risk of anywhere between $600-$1200 which represents less than 3% of my capital. I know that I can consistently day trade and make a $200-$250 a day using AAPL options if I just take quick profit. As I said before, I've had opportunity to make more, but I keep punking out of winning positions too soon. I wish every move went straight up or down to expected targets, but that is typically not the case and I struggle to ride out the ebb & flow before it gets there. Some of that is because of the "theta" factor in dealing with options, particularly weeklies. I feel as though scaling could help me tremendously, but my dependancy on 3 contracts prevents it. I have not forced myself to become accustomed to taking on more risk where scaling would make sense. I've grown tired re-arriving at this apex where I'm unnappreciative of the gains I've been making, then I try to squeeze more out of a trade and I get burned for it. It's got that "damned if I do, but damned if I don't" vibe to it. What have some of you done to overcome some of these hurdles? Did you literally just force yourselves? Been doing this for almost 2.5 years now and I feel like these hiccups should not be happening anymore. I have a system with an extremely reliable win expectancy. I can trade it whether the stock is going up or down. I just want to get out of my own way! :crap:

I believe much of what you're saying as well. Some of the guys I've bounced ideas off of over the last few years have moved entirely into futures. They find technical analysis to be much more reliable in that market. The leverage scares me a little though with $50 a point on the /ES (which is what they trade). But if I'm not in futures, then I'm trying to finally figure out the best thing to do here. Some days I feel like it's spreading my risk. Other days it seems sticking to AAPL options would be the way to go.

Just curious what everyone's opinion is on this subject. I've gotten to the point where I've grown tired of trading individual stocks at a time. I commonly found myself in a situation where'll I find 3-4 stocks thru my scan for the next trading day, have the market direction pegged, and then end up in the 1 stock that decides not to participate. In the last two days I've passed up what would've been an average of +110 ticks or so if I took positions in all of them. Instead I chose the bad apple and stopped out for losses. BTW, yes I do have a methodology and setup that I trade every single time. However, just because one setup looks like a previous one I had success on, that does not guarantee success. Beyond the impact of market direction, all these stocks have different behaviors, betas, etc. What's been successful for you guys?

Welcome. Ya whenever you get a big drop, the first legit bounce is considered an "automatic reversal" .... that's typically an area where shorts start cover. It's also one of the most volatile times to trade IMO so that's why I like to wait for the accumulation to develop under the creek.

Typically after the first bounce of a sustained drop & selling climax. Once that bounce peaks, that is the level or "creek" I'm looking to break after some accumulation.

Within the last couple of weeks, I've missed pops on stocks I was waiting for creek entries on. Most notably was today (GMCR). I was waiting for a break of that .84 level on my chart, but low and behold it popped much earlier than that on what appears to be a symmetrical triangle. Again, this has routinely happened to me while patiently waiting. Then I just stay away from the trade all together because the stock is already up too much on the day and I don't want to chase .... especially in a situation like GMCR's where there's an immediate "demand test" in the creek area.

Definitely VWAP. The reason I ask is there was a tutorial on here that depicted a VWAP/PVP trade. I it was also recommended to me to start following the VWAP by somebody else. I've found it to be very useful, but I catch a lot of resistance from others who swear by using short term EMA's or MA's when determining trend.

Just out of curiosity .... I wanted to get your guys' thoughts on these three as to which would be a more viable indicator of trend.

I trade with a proprietary firm.

Really gave a tremendous amount of thought to all of this over the weekend .... all of what you say is very true. Look, we're talking about a market that can swing 100 points on the Dow in 30mins (which it just did today). Sitting thru those kinds of dips and trying to ride them out takes a lot more gumption than normal. If I'm getting my initial pops, then the next step for me is to continue stacking gains and raise my positions sizes incrementally to increase future profits. Untiil then I cannot get hard on myself for not trading "all" of the move or most of the move.

See that's what my thinking was. Part of that lies in the fact that I'm still growing my portfolio. Even though I want the "bigger" profits, I'm not at a point portfolio-wise where I feel I can pass up the chance to lock automatic ones. I can imagine that people who've really groomed theirs can more comfortably let the "trade off" take it's course.

Along that note .... if you're going to leave some out there, what kind of position size should I be entering in with in the first place? I currently pay $4.99/trade and ECN fees (which vary by position size). Is there a "make sense" sizing for scaling and leaving some out there? I'm commonly trading with 400 shares right now. I know it's not a lot but it's what I'm presently most comfortable with. I used to use anywhere between 500-800, but scaled back after I had hit a trading rut a couple months ago.

Perhaps my ability to translate the candles needs revising ..... maybe using price bars instead or possibly Heikin-Ashi candles. The HA candles seemed like they'd be right up my alley since they smooth out the price data using averages. Sobering comment ..... no seriously though .... there's a truth to what you're saying, especially the fear of the unknown part. I mean we're currently trading in a very volatile market place where most of the equities do not act on their own behalf.

Entry is not the issue. It's the sell. I commonly sell too early, even though technically I am hitting my profit goal for the trade. Should it matter that I'm missing the larger moves? I'm wrestling over it because it seems like I could've traded "longer" in that uptrend we had all during October but I didn't. I got a little frustrated with that kind of missed opportunity. Now that I'm trying it the first week here in November when we've been choppy, I actually took a step back. So is it better to just play the pop at all times until I better learn market trending .... or better yet until I've sufficiently built my account up even more? I'm not so much an indicators guy. My whole strategy is based on a combination of Volume Spread Analysis, Market Profile, VWAP, and Point of Control.

Mulling over what it is I do well and what it is I don't. I've long maintained that one of my weaknesses as a trader is not maximizing trades when they go in my favor. I tend to take profits quickly. The previous 2-3 weeks were chalk full of trades that I took profit early on only to have the stocks go up quite a bit more. So this week, I tried adapting .... tried scaling out of stocks or riding thru dips. The end result was a red week working through some of the "chop" we saw. Obviously as a trader I'd like to be able to stomach dips better. I'd certainly like to utilize scaling. But if I'm hitting my modest profit goals on a daily basis just playing the first pop on the setup I trade ..... well then why get away from that? I would assume in time that as I continue to build my portfolio, I might be able to take more advantage of scaling and riding thru dips. The largest net can absorb the most risk right?

Awesome stuff there Tams!

I'm really paying a lot of attention to that now. I've been using that method for some of my setups (using Wyckoff/VSA strategies) .... particularly with "The Creek" and using the re-test as entry. I can see how a breakout and a test of the previous resistance as support is very important to determine strength of the move.

That's precisely why I'm asking. So do you not use them at all? I just want to find a way to get more comfortable buying dips. I figured better trendlines would help me.