Jay's Journal

[jasont 10]

Thanks Sam. The market has appeared to be showing extensive volatility since the beginning of September. It is hard not to feel like you could have pulled more out of the market when it makes such big ranges but as you say there are the two sides to the coin and I'm thankful I was on the right side of the coin.

Edited September 18, 2008 by jasont

[jasont 10]

Trading For 17th September

 

Today's Trading Goals:

 

Spend 60% Or More Of My Time Watching The 5 Minute Chart

Make 8 Or Less Trades

Make At Least One Trade In Direction Of Established Trend

 

8:53 We're currently looking at a declining market during the overnight action. The US Government took steps to take over AIG which could be part of the reason for the decline. Right now I'm not too sure where we are headed in the market. The VIX has hit levels previously associated with market bottoms either intermediate or long term. The VOlume we saw prior to the sell off this week has also been seen at market turns previously. I'm going to air on the side of caution for today.

 

We could drop out of the sky right now if the market perceives the AIG situation badly. The more likely option I believe we could see is some early consolidation followed by some continued movement higher. Either way I am not going to set my plan in stone here until I see the reaction at the open. No major news out today though I will keep my eye on the Oil Inventories at 10:35. Oil doesn't seem to be making as big an impact on the market now though as inflation worries have eased with the drop in commodity prices.

 

9:36 Volume declining as we move lower, tick under the zero line currently and pressing lower showing stocks selling as they open.

 

9:58 Went short at 1198 and was stopped out at 1200. Right after being stopped out we moved back down so I got in again at 1297.50. Both only on half positions as I believe the stronger trend is up right now. Missed exit at 1195.50 and got out at 1197.25. Reason for trade was Tick divergence and volume extreme on the 3 second.

 

10:03 Better trade appears to have been in the direction of the trend though we appear to be slowing down up here. Bit of a choppy move higher here, best of waiting for things to clean out a bit.

 

10:17 Entered long at 1295.50 with stop at 1292.50. Only in on half position as stop was far away from entry point. Stop hit.

 

10:24 Long again this time full position at 1192. Out for loss at 1190. Time to take a break and regroup.

 

10:27 Long at 1289. 1st target hit at 1190.25. Stop moved up on second position to 1188.25. Reason for the longs was declining volume as we moved down and 1-2-3 pattern on the 5 minute chart. If volume doesn't come in big soon I'm hitting the exit. Out at 1188.25.

 

10:34 I find myself on the wrong side of the market today. Tick is predominantly in the red which tells me we may see a trend down type day unless we show good movement above there.

 

10:45 Stopped just shy of support down here. More volume came in but not enough to constitute what my guides determine as a reversal. Still in downtrend from morning highs. Tick still unable to shake into positive territory. Initial thoughts on the day being a buy up were wrong. Time to see what the market is really telling me.

 

11:12 Market still going down without as much as a hint of buying life. Stocks still selling strongly as seen by the tick. Volume seems to be quite light today, may just be my perception though.

 

11:37 Hmm well today is just not my kind of day for trading. After taking the losses early on I found myself spending the day looking for a decent sized bounce to short into. I'll assess my trading tomorrow and go from there.

 

Daily Wrap Up

 

Oddly enough I am glad I had a day like today right after yesterdays good performance. The reason being that it provides me with a strong contrast between performances. I would like to point out the things that were done well with Tuesday as opposed to today.

 

First of all Tuesday saw me predominantly watching the 5 minute and 1 minute chart. That made a big difference because I could filter out the back and forth which is seen in the 3 second chart and decipher the higher odds trades.

 

The second thing and probably the most important was that I traded in the direction of the trend on Tuesday. It is difficult to muster up a good risk to reward position if I am trading against the trend. Hard stops are going to be taken quicker and any trades that do get a chance end up being short lived. I played out today again in simulation and placed trades in the direction of the trend according to 1 minute retracements. Great hindsight trading but the emphasis was on seeing the difference in results when following the trend. Not breakout trading but entering retracements in the direction of the trend. Something I am working on improving.

 

My first two trades were good but just early. What I did well was pick up on the negative sentiment from the stocks as we reached the 1198 area. The other thing I did well in those trades is position myself with only half my regular size. This was good because the market hadn't yet established a trend and we weren't seeing extreme volume which constitutes a reversal.

 

The day ended 7.5 points down but probably am a lot further ahead in valuable lessons learnt today. I think I have finally clicked in the importance of trusting the trend unless reversal signals are seen. For following my plan I am giving myself a 2 out of 10. Lot's of room for improvement tomorrow so I can focus on that from here.

[jasont 10]

Trading For 18th September

 

Trading Goals For Today:

 

Spend 60% Or More Of My Time Watching The 5 Minute Chart

Make 8 Or Less Trades

Make At Least One Trade In Direction Of Established Trend

Identify The Trend And Note Changes In Trend Where Needed

 

9:06 The overnight market has seen a small rise on yesterdays close but we are currently riding a downtrend in premarket. The FED, ECB and Bank of Japan have joined forces to boost the markets. This is going to be a very interesting day for trading. There is no major news due out during the market hours today so we will again be left to digest the overnight government interventions we have been seeing a lot of lately.

 

9:35 We began an uptrend during premarket prior to the open which is still in place. Roughly 15 points up at this stage. Tick is playing in positive territory right now, volume rising as we move in the direction of the trend. Game right now is follow the trend unless we see strong signs in a reversal.

 

9:46 Premarket uptrend broken. Volume pretty heavy on the way down. Tick moved into negative territory.

 

9:59 Certainly getting some interesting action here, Quick and big move down followed by a quick and big move up. We aren't really trending thus far. Made a new high and the Tick is moving in positive territory. At this stage my option is to wait on the sidelines until we settle down a bit if at all. Volume not clearly one way or the other but we have seen bigger volume in on this move higher.

 

10:17 Market coming down from near 1188 high. Volume on the way down declined. New downtrend formed on the 1 minute chart.

 

10:39 Market is following its 5 minute uptrend at this point. Volume has declined on the move lower. Tick not really showing strength one way or the other. Still haven't made a trade.

 

10:57 Double bottom may not hold down here, made 1-2-3 top and seem to be traveling lower. Volume finally kicking in at new lows. Tick now moved to predominantly negative levels showing the selling power of the stocks hasn't let up yet. Premarket uptrend broken as well.

 

11:56 Calling it a night.

 

Daily Wrap Up

 

Hobby or Business? I guess that's the biggest question I am faced with right now. Today I didn't place a single trade yet I saw 3 strong opportunities to do so. The first of the three presented itself at 1183.25 as we made a 1-2-3 top. I saw it at the time but hesitated and missed the move. The same thing occurred at the pullback at 1181.25 and again at 1168.

 

If I am doing this as a hobby then sitting here watching the market without trading is fine. However if this is a business, I cannot afford to sit here watching trades that are part of the plan pass me by. It is poor business practice.

 

I can say my analysis was spot on today though I didn't write down all of my notes, I took a trend down standpoint after we dropped from 1181. We continued that trend the entire time I was watching the market. That is probably what irritates me the most about today, I had strong analysis backed by very good probability trades yet I fail to act upon it.

 

There isn't much more I can really say. For following my plan I give myself a 1 out of 10. I made a point because I stuck to my analysis rules.

[firewalker 10]

Thanks for that Ochie. What you have suggested is pretty much what I have been looking at with the 3 second chart. On a 5 minute chart a reversal is pretty obvious but sometimes difficult to catch. After seeing the reversal I monitor the 1 minute chart for the first pullback from the reversal.

 

Currently I am relying on exactly what you mentioned, the "PA bouncing up and down on a single 1 minute bar" as we reach my expected reaction point. In a way I find it becomes more intuition work than solid plan work when relying on the 1 minute time frame in comparison to the 3 second chart.

 

I think yesterday was nice example of how watching (and waiting) for the 5-min chart to show you the entry can be risky business... some bars on the 5 minute timeframe where (on the dow) as wide as 150 points in spread! Try and catch that

 

Great work you're putting into your journal, I've been pretty disciplined myself this month but it takes effort to write everything down like you do!

 

I also noticed you happen to take a lot of trades on some days, I think I saw one where you had more than 25... you then set yourself the goal not to take more than 5 trades, yet I see you changed that into 8... If you don't mind me asking, how come? I see you usually don't trade all day (I should say all night for your timezone), so do you feel there are really 8 equally high probability decent entries in only a few hours' time?

 

You also wrote: "That is probably what irritates me the most about today, I had strong analysis backed by very good probability trades yet I fail to act upon it." I hear what you're saying... can be very frustrating. But - unless these 'inactions' occur more frequently than is preferable, I would say focus on the positive elements: you had a strong analysis which turned out right.

 

Good trading!

[jasont 10]

Thanks for the compliments on my journal Firewalker. I agree that on days like yesterday relying on the 5 minute chart for entries can be risky. I think the best things I ever did for my trading was consult the 1 minute chart more and the 3 second chart for entries. The 5 minute chart now provides me with good broad trend information whilst the 1 minute breaks down the trend for entries to be made on a 3 second chart.

 

My alterations to my plan that I made give me roughly an average of 3-4 trades per day. Occasionally I may enter a touch too early and therefore take a small loss or gain. Have a few of those per day and before you know it 5 trades are gone. I found 5 to be too restricting. I only remain in a trade as long as the market continues in that direction. At the first sign of a decent pullback I will take my profits and await the next set up.

 

In regards to your comment "you had a strong analysis which turned out right" I have to be honest and say that is my problem. I am tired of trying to be right in the market, it takes too much stress. I'd much rather take a trade and if it's a loss so be it, doesn't matter whether I was right or wrong, what matters is P&L. Hence my comment about this being a hobby or a business. If it's a hobby then sure I can stroke my ego about great analysis I made however if it's a business, I'd rather leave the ego behind and make a profit.

 

It's great to hear you have been disciplined in your trading this month. This market has been a highly emotional one but a profitable one for those that can stay the course with their plan and stick to their guides. Well done mate.

[jasont 10]

Trading For 19th September

 

Today's Trading Goals:

 

Spend 60% Or More Of My Time Watching The 5 Minute Chart

Make 8 Or Less Trades

Identify The Trend And Note Changes In Trend Where Needed

Make At Least One Trade In Direction Of Established Trend

 

8:58 Big gains overnight after yesterday's turnaround. Right now we have been trending up pretty hard and are reaching near vertical point. Treasury Sec Paulson Speaks at 10am. This wasn't a scheduled talk as I didn't see that down until today. Yesterday there was no major news due for today. This will be something to remain cautious of as it is likely to make a big impact in the markets. I'll stay with the trend whichever direction it is after we open. That is my focus for the day.

 

9:25 We have been locked limit up since just after 9am here at 1268. I won't be trading today from the looks of it, crazy happenings that put me in unfamiliar territory. Best leaving this market be. I'll watch it though because it fascinates me. Will give notes if things change.

 

9:35 Well limit up only lasted until the market opened. Possibly overnight limits in place? As we opened we shot to 1284 and have come back to 1268 since. This thing is extremely volatile. If it keeps this particular nature I will sit on the sidelines. Still appear to be following premarket uptrend, volume massive at the open and Tick is remaining positive.

 

9:44 Attempted a long trade down here at 1261.25 but was stopped out for 2.25 loss. Ended up in a long at 1257 and trailed my stop which was taken out at 1259.25 for 2.25 gain. Both were only half positions. Not willing to risk full positions in this market with the current volatility.

 

9:52 Ok Tick in positive territory and strong. Only trends I have are ones from pre market which are up. Volume has retreated on the down move. Recent bounce is beginning to pull back.

 

9:54 New low made for the day.

 

10:00 1 minute trend says down, meeting 5 minute pre market uptrend. Paulson about to speak so will wait out a bit until things are devoured.

 

10:08 The fact we are traveling down yet the Tick remains positive has me cautious following this downtrend. It suggests more of a temporary phase rather than the day's direction. Should it start trading beneath the zero I would be less cautious. Until we put a decent reversal in place though down is the direction the market is heading.

 

10:29 Took a couple of losses trying to long the market at 1245-1247. There is currently no discernible trend we are following. We have not seen what I classify as a reversal just yet. Until we see that I am best sticking with the selling side. Tick is banging on the doors of selling, volume has been declining, market is moving down.

 

10:42 Took a short trade 1245.50 but we stalled out, took an exit at 1245. Market wasn't moving down with the force we had been seeing.

 

10:45 Bastard, just out prior to us going lower.

 

10:47 Volume increased on latest drive down on 1 minute chart, making new lows. Stocks seen getting comfortable with selling now as seen by the Tick beneath the zero.

 

11:06 Bounce from support with a rise in volume. Tick moved strongly into positive territory.

 

11:43 Well I just took a long trade at 1247 and scaled in at 1250. Trailed the stop pretty tight as we made a Tick extreme and were yet to be in a strongly established uptrend. Out at 1251.50 for a small gain. Calling it a night here. Was a good day, I followed my plan pretty well, if I stuck to following the trend early on in the day I would have performed better. Ended down 1 point for the day. Pretty good considering I was down 4.25 at one stage. A big step forward for me today as I put full faith in my plan and came out without too much damage on a volatile day.

 

Daily Wrap Up

 

I don't think I have ever had a better losing day. The market was moving fast and required people to be quick on the trigger to get in or out. I was quick to pull trades not going my direction, I entered on half positions and scaled in if things were going my way relatively quickly. There was one trade that did me the most damage which wasn't following the broader trend however it is taken as another lesson to stick with trading the trend.

 

One trade that stands out the most for me was my last trade for the day. I picked up on the change of trend as we began moving higher at 11am. At 11:39 volume had been declining on the retracement and the tick had shown a divergence. It was good that I entered on a half position remaining cautious of the risk and scaled in a bit later. My trailing stop was hit for a small gain and could have been larger but it is something to work on in the future.

 

For following my rules today I give myself a 7 out of 10. I made good progress in watching the charts for entries. A couple of trades were against the however my management of the trades was pretty good considering the high levels of volatility we experienced today. I ended the day 1 point down but I put the need to be right aside and focused on following the plan. It helped keep me on the right side of the market and not attempt to buy the entire way down, something that in the past has been an expensive exercise.

[jasont 10]

Weekly Wrap Up

 

I can find no other description better for this week than "From Hobby to Business". I felt this week marked a change in my mentality towards my trading that has been necessary for quite some time. There was only so far I could take my trading without treating it as a business.

 

In the past I have been making my trading personal. If I took a few losses I would take it personal, as much as I dislike admitting it, I felt like I had to be right in the market. I thought the most important aspect of my trading was my ability to pick the right direction in the market. I was wrong. Having analysis that successfully puts me on the right side of the market but had no importance if I wasn't placing the trades.

 

This week a number of things have changed, I have implemented the adjusted trading plan, I am using a shorter time frame to assist my trading and I am focusing on going with the grain rather than against it. When I was trading CFD's I had a plan that had a win rate of roughly 30-40%. It went with the trend and took a lot of losses. However its wins were much greater than the losses.

 

Now that plan didn't suit the current market and it was based on breakout trading. However it did have some strengths that I had forgotten about. One was to trust a trend unless something significantly changes it. That has been something I have found difficult with my futures trading but this week made a break through. I saw the importance it had in reducing risk and maximizing gains. After all that is what this game is all about.

 

The second thing that plan did well was to press the winners and only risk a small amount upfront. When the market went my way I would load up and milk it for everything it had. It made a difference to the P&L at the end of the day.

 

The problem with my old plan was that it didn't suit my personality due to trading a daily time frame and it didn't allow me to use my analytical skills to increase the win rate. It was a mechanical system. This week has seen me take the advantages of my old plan and blend it with the advantages of my futures plan. It has been a good result and something that over time I will learn to polish even more.

 

So firstly I want to point out the aspects of my trading that I was happy this week and that I felt attributed to my better trades. Number one was that I began trusting and following the trend. Each time I took a trade in the direction of the trend I had ample time to exit early if we were not yet ready to drop which reduced my risk. I also would obtain larger point gains when the market went my way than if I made a profitable trade against the trend. Most significantly was following the 1 minute trend.

 

To help me identify turning points in the trend I would use a trend line but more importantly identify areas we were likely to reach again and cause further selling. If we broke the recent low and moved down a few points, it was likely we would attempt to go back up to the break point and encourage bottom buyers to get out at or as close to break even. In a way I don't blame those guys who hold on instead of taking their stops as we do commonly reach back to the breakout point. However it only takes one time for that not to occur before you wipe a large portion of your account out. Something I don't have the stomach for.

 

This method of trend analysis had me at full attention on the 3 second chart once we reached those points. This helped reduce my early entries as I waited for the probable turning points and then wouldn't get on board until I saw the compliance of traders to push further in the direction of the trend on the 3 second chart.

 

The second thing which I was happy with this week was my following of the 3 second chart. This was the first week I used the 3 second chart together live with my other analysis. It made a big difference to my entries when used in conjunction with my 1 minute and 5 minute analysis. Used on it's own it caused me a few irregular trades but I was quick to notice that and get back on my game.

 

What I have been using the 3 second chart for is as above in the trend following but what specifically it helped me find was big traders entering the market. If we are at what I call a reaction point, such as an expected meeting of trend or previous breakout point, I look for big traders to enter. If the enter and we continue through the reaction point it is a good sign we are not looking to follow the existing trend. If we hit that point and big volume comes in and we begin to show hesitation at the reaction point, it is a good sign the retracement is failing to gather further interest.

 

I don't have it down to a science but I know what I am looking for at that area. The 3 second has also allowed me to enter in on half positions initially. They gave me a further stop point initially and at reduced risk. I had time to assess whether or not we were going to continue in the direction of the trend or break it. If we showed signs of continuing the trend I added my second lot and then trailed the stop on the way down.

 

Those were the two big positive impacts on my trading. The results now rely on implementing the above mentioned positives as best I can. My weekly rating for the week is a 6 out of 10. I took the adjusted guides on board and implemented them most of the time. My biggest set backs occurred when I did stick to the guides so it is obvious what is needed to improve upon this week.

 

It was time to turn my trading from hobby, which was how I was treating it, to business. I was talking to someone who runs 3 businesses within a franchise and something they said helped me along with my trading. They said that last month they made X amount of profit but this month could lose a small amount. I have never run a traditional business that has large overheads but I always assumed that they generally made money each month. They are not far from trading, maybe this month they have a big gain in profits but next month they could come up with a small loss. Over the two months it was a good gain but if you look at it as one month you could get pretty pissy.

 

Each time I had a losing day I thought it meant I could no longer analyze the market as well as I thought. In all honesty that doesn't really matter that much, what does matter is the P&L at the end of the day. There came a time for me where I had to make a decision in my trading. Will I remain a hobby trader or begin to make this into a proper business and a professional source of income.

 

Being a hobby it was easier to fob off not making gains as learning. At the same time treating it as a hobby made it personal. The change in my structure now has me treating this as a business. Losses are no longer a result of my inability to be right, they are a result of business. Being right or wrong in the market doesn't matter as much as the P&L result at the end of the day now. What is important is creating a business that can sustain itself and provide a source of income for it's owner, me.

[jasont 10]

Weekly Analysis

 

I think anyone who trades regularly will be interested to see the impact of the latest regulations restricting naked short selling of equities. For me right now this provides the biggest interest as it no doubt upsets the balance of the market. We effectively become a buyers market when traders can no longer speculate in the equities that the market will move lower and profit from it.

 

I believe it will change the dynamics in the market as there is no money to be made by selling equities, only money to be retained by doing so. In a way it is understandable for stocks to be prohibited from selling first, after all the point of the stocks is to raise capital for a business should it be performing well. For pure equities traders it makes life difficult and less opportunity will prevent itself for those traders.

 

I do suspect we may see an increase in volume for futures trading though as big traders use that medium to hedge long trades in the market as opposed to other stocks. Then again with the restriction on short selling there may not be much money to be made on the short side right now.

 

What will be interesting is something Brett Steenbarger mentioned on his site in regards to the Tick. It will naturally change the dynamics of it as there was previously 4 elements to trading equities. Buy low, sell high, and sell high and buy low. We effectively take one side of the equation out which means the Tick will not see negative numbers because traders are speculating lower prices for equities but instead because they are locking in gains. That will be something interesting to watch over the next few weeks. I'm not sure how long this regulation is staying in place but it has been implemented globally.

 

Moving into other areas the indexes saw some heavy volatility occur over the past week. We hit fresh lows on what I class as extreme volume on the S&P, Dow and Nasdaq but failed to encourage further selling. As we have previously seen, drastic measures implemented by the government and Fed have created a change in dynamics.

 

It does appear as though the mark down phase or momentum phase of this move lower appears to be slowing in strength. The appearance of big volume down here and refusal to push lower does suggest some accumulation is occurring. This has me thinking the intermediate term may bring in some decent buying, especially considering no money is to be made from selling the equities due to regulation.

 

The VIX saw levels above 40 get hit and we have pulled back from there. The previous 30 level that so many people regarded as the magic turning point was broken through with relative ease. We still are hanging around the 30 level which to me indicates the volatility is not yet ready to subside.

 

What is concerning is the increase in Gold and the drop in the USD which suggests a lack of faith in the Government taking on the large amounts of debt. I tend to think they will be better able to deal with such debts than banks. The reason being that whilst the banks hold the debts it discourages further cash flow coming into them removing their source of income. The US government however has a source of income unaffected by the debt which is taxes. Although it will affect the USD value, they still have strong cash flow coming in.

 

Oil has seen a bounce now that could re-ignite inflation concerns though at this stage I wouldn't count it as a reversal rather than a retracement.

 

For me right now I am taking a bullish view but will remain relatively cautious. This market has heightened volatility which could see some more back and forth before moving higher. It is difficult to see a sustained move lower with the recent changes to regulation. To sell further from here it means some big traders would have had to been holding large quantities of equities prior to last week and want to sell now. To me that appears to be the more unlikely scenario. I do believe right now is one of those rare moments we have a strong scenario to one side.

[jasont 10]

Trading For 22nd September

 

Goals For Today:

 

Make 8 Or Less Trades

Identify The Trend And Note Changes In Trend Where Needed

Make At Least One Trade In Direction Of Established Trend

 

9:07 We are currently at roughly the same levels we closed at on Friday. There has been a slow uptrend evident in the 5 minute chart though we are seeing some bigger movement in the past 45 mins. No major news out today so no particular timeframes to watch out for.

 

9:25 In the current uptrend volume is picking up as we move higher and declining as we retrace or stall.

 

9:33 Market moved down from open, Tick negative, Volume increased on the way down.

 

9:36 Jumped in long but we couldn't pick up volume or higher prices took 1 tick gain exit. Missed the downward move afterward.

 

9:39 Took another shot at the long side but we came back pretty hard, took a 0.75 loss on full position. Current trend is now down at this point. Tick is neutral at this stage. Will go with the trend unless we show a reversal. Volume has declined as we moved lower.

 

9:50 Hit just beneath the support area and reversed pretty hard. Tick still struggling to move above the zero area, not convinced on shorting as we reach the trend line here. Will keep an eye out for a 1-2-3 bounce.

 

10:01 Took short entry at 1240 took first target down at 1237.50 as we hit high volume and trailed the rest at 1239 which was taken at 1239.50. Tick made a decent move to the positive side though it may be being skewed by the short selling ban. Basing out down here with decent volume.

 

10:13 Hmm choppy market here.

 

10:22 Tick is predominantly negative indicating trend down type day is the theme thus far. Trending down strongly, volume increasing now on moves lower and decreasing as we retrace.

 

10:51 Took another short trade this time at 1238.50 for a move down from 1240. Moved down initially but pulled back so took exit at 1237.50. Tick taking a few more shots at the positive area and we are now following an uptrend.

 

11:02 Uptrend broken.

 

11:07 Took a short trade again but only scalped a 1.25 gain as we started building heavy volume at an expected reaction point. Good trade. Proving to be a difficult market to trade for me as we push back and forth. May be setting up a 1-2-3 bottom down here.

 

11:24 Took a short trade at 1232 as we tested the day's lows. Met the downtrend and took off lower. Didn't get a chance to trade the second lot on it as we took of immediately, took the position off at 1229 as heavy volume came in slowing the move lower down.

 

Calling it a night here. Was tough trading session but came out well. Took more trades than I'd like but I came out ahead.

 

Daily Wrap Up

 

Again another improvement in my trading which is good. I traded more than I think is ideal but I made it work. The trades that provided the best results were the ones in the direction of the broader trend which was down. There was a section in there that I believed we could have bounced but that was short lived and I was able to switch to the downside rather quickly. The trend wasn't as clean for me as I would like but I managed to get in and scrape a few gains.

 

There was two trades that stood out for me. The first one was at 10:01 where I traded a further decline in the current downtrend. I took the first lot off as we built up volume down at the support area which was good. I then had the trailed position well placed which was good. After that trade things were pretty choppy over the next 20 minutes and I found it difficult to follow the trend as we appeared to be basing pretty well.

 

The next trade I was happy with was my last one. It was good that I took a continuation trade. We had been trending down on the 1 minute chart and were at a double bottom point. I saw that we were hitting the downtrend and big volume was failing to see us rebound which was good. I jumped in and again got out as we saw some big volume come in as we based. It was a good exit as not far from there we bounced back higher.

 

I was pleased how I handled today. For following my plan I am giving myself a 7 out of 10. I traded mainly in the direction of the trend and kept my risk relatively low whilst pressing the trades that went my way as best I could. I ended up ahead by 3.75 points which was a positive and hopefully I can improve upon that tomorrow.

[jasont 10]

Trading For 23rd September

 

Today's Trading Goals:

 

Make 8 Or Less Trades

Identify The Trend And Note Changes In Trend Where Needed

Make At Least One Trade In Direction Of Established Trend

 

9:17 It appears that we have some big announcements coming at 9:30am today, right at the open. I will take an easy approach at the open. We are currently in trend down mode so I will assess whether that sticks at the open. Actually pre market looks rather choppy.

 

9:34 Weird not as much opening volume as I have become accustomed to. We have pressed up but fading back off the resistance at 1215. Also this is where the premarket trend is reaching right now. Tick again is struggling above the zero area.

 

9:45 Tick moved into positive showing some sort of life on the buying side from stocks but couldn't sustain the move just yet. Saw a big reversal from the ES down at 1207 and currently the pre market downtrend is being tested. Will give this some time. One thing is for sure, volatility hasn't gone anywhere just yet. - Downtrend broken.

 

10:03 Bought in at 1216.50 and took a 2 point loss. Attempted again at 1215 and scaled in. Took a few points on the first and a point on the second. No strong trend at this stage, Volume declined as we dropped from the highs. Tick moved into positive territory but again has been slapped back a bit.

 

10:13 Tried shorting this market for the 1-2-3 top, made a decent move down but then flew back and took my trailing stop for a tick gain. Only half position. Not sure what this market is doing right now, failed to make a lower low so I will put my trust in up right now.

 

10:21 Tick has been equal positive and negative right now. We are reaching for the day's highs now. Volume still lighter than on the way up. 1 minute shows volume supporting the rise but mainly showing volume spikes at turns.

 

10:38 Market is choppy as shit. Had a couple trades, one loser one b/e now waiting for something more significant to stand out. Each move we make is commonly being retraced about 75% of the way before continuing further. We have a double top formed which suggests the end of the upward move but right now it has me guessing. Feel like I have lost my concentration a bit.

 

11:05 Concentration is lacking right now. Going to call it a night. Can feel myself wanting to make trades not part of the plan and missing ones that are part of it.

 

Daily Wrap Up

 

Today was a good day for understanding my own mental state. The morning started well with a few good attempts at trades. I made a good trade at just after 10am, a touch early initially but it was good that I could get back on the horse when I recognized we were still building some buying strength. The management of the trade also was quite good which enable me to go from 2 points down to a point up.

 

I got caught in the chop which occurred just after 10:30am and even when going back through simulation mode now I still got chopped around a little. It is good to see that it wasn't a case of making non plan based decisions but more so it was an easy area to get caught out in. The last trade I took was a short at 1217.75 for a move down from the double top at roughly 10:36. The chop knocked me out for break even which showed good trade management. We did move down not long after but unfortunately this was when I lost my concentration and not long after I called it a night.

 

I am pleased that I could identify my mental state not being 100% and taking myself out of the game. I took a break first to get my head straight but upon returning I just wasn't up to it and thought it best to get some good night rest and work on tomorrow. For following my plan I give myself a 7 out of 10. I tried as best I could to go with the trend, it was difficult to identify early on as we had some ranging back and forth but I think I did well. I came out break even minus brokerage however I was pleased with my performance.

[jasont 10]

Trading For 24th September

 

Today's Trading Goals:

 

Make 8 Or Less Trades

Identify The Trend And Note Changes In Trend Where Needed

Make At Least One Trade In Direction Of Established Trend

 

9:07 Market is opening roughly 10 points higher and the overnight market has been roughly ranging. It does appear to have a short term uptrend in progress but whether or not it will hold into the open is uncertain. Big volume kicked in on the recent reversal so it may have some balls behind it. Important news at 10am as well as Oil inventories at 10:35am. Both of these I will be cautious around and try not to take any trades immediately prior to their release.

 

9:37 Took an early short trade from 1192 and scaled in around 1191. Took first lot off at 1188ish and then last lot around 1188.75. Going with downtrend as big volume pushed us lower. Tick is riding neutral area right not.

 

9:46 Market has seen stocks move into negative territory. Market made new low for the day on declining volume. Tredn down from premarket is holding for the moment.

 

9:57 Took another short trade but got out as we were heading into the news for a 0.75 gain on half position. Will stay out until after the news at 10am. Market still playing with the zero area on the tick and following the pre market downtrend. Volume currently mixed at this stage.

 

10:02 Choppy action after the news, no place for me right now. Hitting one of the pre market downtrends though.

 

10:09 Took another short trade at 1187.25 but was shaken out for a 0.25 loss on a half position. Volume was picking up as we moved lower but halted pretty hard. Possibly just digesting the idea of making new lows.

 

10:13 Took a short trade entry at 1185.25 which was delayed in coming up so I presumed I wasn't in it. Turns out I was, took exit for a point gain as we came into heavy volume slowing the selling. Downtrend is holding strong at this stage but suspect of it moving further as volume is kicking in down at these 1183 levels. I know that my opinions don't pay me so I will stay in the direction of this trend and wait for a decent reversal signal before attempting a long trade.

 

10:26 Tried scaling into another short trade. Took 0.75 off one position and break even on the second as we didn't provide follow through on volume. We're now testing the downtrend and showing buying interest from the stocks. Seem like a good exit as we blasted off just then. 1st downtrend broken.

 

10:38 Took another short on the move to 1192 on volume extreme. Scaled in and took a small gain on first lot and point gain on second lot. Appears to have been a good idea as market went back up to test the 1192 area.

 

10:40 Calling it a night. Have made some good gains and will reward myself by taking the rest of the night off. Am happy with my performance today.

 

Daily Wrap Up

 

I have found myself taking more trades recently and I think it is actually for the better. As a trader I tend to be better at getting in and out rather quickly which means better results for my business. This was seen today and has been seen over the past week.

 

I took a good trade at the open today which bagged a few points. I saw some big volume push the market higher but there was no follow through. We made a lower high and respected the pre market downtrend. I managed the trade well too as we hit the support area at 1287 and reversed.

 

I also took a good trade prior to the news. I got in and we were acting rather strange with the market action and I checked the time to see we were entering the news period. I took the position off right away which showed good risk management.

 

I followed the trend well today and it paid off in P&L. I don't believe I took a single long position as I really only traded the first hour or so and during that time the trend was strongly down. Entering on half a position and scaling in when we show signs of continuing in my desired direction is helping keep my risk minimal and I can use it to scalp a point or so here and there. I enjoy being in the action with the market, sitting there for 30 minutes waiting for the market to reach a level doesn't work for me and I am glad from a business standpoint that I have recognized that.

 

For following my plan today I am giving myself a 9 out of 10. I traded the trend, followed the risk management and position sizing guides well and rewarded myself for good performance. I ended the day 8.5 points up which was a big improvement on the week.

[jasont 10]

Trading For 25th September

 

Trading Goals for Today:

 

Identify The Trend And Note Changes In Trend Where Needed

Make At Least One Trade In Direction Of Established Trend

 

9:12 We are looking at opening about 5 points higher. In the over night market we have seen a slight uptrend but the more immediate trend is down. I'll keep my eye on both with the immediate view down but watching to see how we react should we reach the broader uptrend. We have important news at 10am so no trades are to be taken immediately prior to that.

 

On an analysis front, VIX appears to be running out of puff for higher levels indicating the market may be ready to let go of the selling pressure. All 3 indexes are showing good probability for a 1-2-3 bottom pattern. Will keep an eye on the possibility of a buy up today.

 

9:32 We respected the pre market downtrend but have picked up volume at the previous low. Tick is remaining positive at this stage. Not sure right now so seeing what is happening. I feel I am biased to the upside right now.

 

9:36 Entered long at a spot ordinarily left for a short trade. Will regroup and trade what I see, not what I think. Would have liked to switch my position around but not at that stage in my trading yet.

 

9:42 Was in long at 1195.5 and took 1.25 gain, hmm. Downtrend broken.

 

9:46 Market moving upward, volume increasing on moves higher and decreasing on moves pulling back. Tick keeping on the positive side.

 

9:53 Need to turn my game around here I went on the short side against the trend. Lesson learnt, took max loss on half position.

 

9:59 Tick staying positive, market is not looking weak at all really. Trend is up and pretty steep. About to have the news.

 

10:19 Well today is definitely a learning experience. I took two long trades and about 4 short trades which is against my guides. We have been trending up the entire day and I was shorting. I have pretty much eroded yesterdays gains by my eagerness to pick tops. Reminds me of the way I was previously trading and I don't enjoy it. Calling it a night here as I have reached my loss limit for the day.

 

Daily Wrap Up

 

Today has been a good reinforcement of the importance of following the trend. On Wednesday I followed the trend and made good gains. Today I traded against the trend and lost good gains. My second trade of the day which was a long trade was good. We bottomed out at 1194 on good volume, rose up and then came back weak. I took a good entry. I took an early exit which could have been better but these days happen.

 

From that point on my analysis said up before the day began, the trend was then up and the Tick was positive. I ran the day again in simulation and only traded the long side, something that my plan would enforce. It has been a good learning experience. I felt like I went back to my days of bottom and top picking yesterday and it is important for me to realize that change isn't an overnight thing.

 

Although yesterday I lapsed back into my old habits, I have been upholding my new more beneficial habits for the most of the week. It is great that I can recognize things that can be worked on and I can see the reasons for a poor performing day. It is much easier to improve when you know what needs improvement rather try to improve when you don't know what needs fixing.

 

I am also happy I haven't taken the losses personally as I used to. It shows more maturity in my trading and allows me to get back on the horse and work what I am meant to be working. For following my plan today I give myself a 1 out of 10. I took a 7.75 point loss today but I was pleased I followed my risk management and took myself out of the day. It wiped the gains from the day prior but there are plenty more trading days and I know my plan's effectiveness can make that back.

[jasont 10]

Trading For 26th September

 

Today's Trading Goals:

 

Identify The Trend And Note Changes In Trend Where Needed

Only Place Trades In The Direction Of The Established Trend

 

8:55 Premarket has us currently in a downtrend. Currently we are 20+ points down from yesterdays close. Things don't look pretty at this stage. I have adjusted my goals to only trade in the direction of the trend, this should help improve upon yesterday. There is no major news due to be released today.

 

9:25 Downtrends have been broken. We are currently in a new formed uptrend though having trouble continuing.

 

9:31 Tick down heavily at the open, had big spike higher initially now settled a bit.

 

9:39 Took a long trade from 1292.75 but didn't scale in. Trailing stop hit at 1295.75. Still holding this uptrend, market has become choppy. Tick holding negative values indicating selling from stocks.

 

9:45 Uptrend broken.

 

9:54 Tried to break to new highs, failed. Tick still showing negative numbers, volume increasing on the moves higher and declining on the moves down.

 

10:06 Steep uptrend broken. Tick made attempt for positive numbers but was kicked back. Volume picking up on the downside now.

 

10:18 Took long trade at 1199.75 for an attempt at continuing this uptrend. Market moved up about 2 ticks and then stalled. Took half point loss. Good exit.

 

10:29 Market has remained choppy for the past half an hour. Tick has been majority down but testing the positive side pretty frequently. Volume has also been choppy. Currently in near term down trend and longer term uptrend from premarket.

 

10:38 This market has really died off. Volume is rather light and action has been ranging. Reaching downtrend point now.

 

10:46 Going to call it a night here. Only took the two trades as we came into some real choppy action here. Did well staying out of an unfavorable market for my trading.

 

Daily Wrap Up

 

It is reassuring to see my P&L increase when I follow the plan. It is a good contrast to yesterday and helps solidify the day prior. I was cautious trading today after yesterdays performance however today brings to light the difference between following the plan/trend and not doing so. I was pleased that I refrained from too much trading once we developed into choppy action.

 

The first trade was a good one according to plan. I saw us bottom early on big volume and when we failed to push lower and put in a higher low it opened up the door for some buying momentum. It was good that I saw this through the charts and followed the plan. I trailed the stop well as I didn't get the second lot scaled in. We came back and hit the stop which gave me a good gain.

 

The second trade was a good attempt at a continuation. I saw early that we were having trouble pushing higher after a big volume retracement and took an early exit. It was a good attempt and a good exit prior to us pulling back further.

 

I only placed trades in the direction of the trend today and that made a big improvement upon yesterday in which I was fighting the trend. For following my plan I give myself an 8 out of 10. I did well assessing the markets trend and strength. I also did a good job staying out when the trend was not showing clear movement. A good way to end the week, 2.5 point gain.

 

[jasont 10]

Week of 22nd - 26th Wrap Up

 

This was a big week for me in terms of solidifying what I do in my trading. Prior to using the 3 second chart for entries I found my timing rather sketchy and less scientific. So my hat goes off to Atto from the forum for showing me the advantages of trading a smaller time frame.

 

This week entries had substance behind them and it allowed me to narrow the entry point down. I am not afraid to admit for the first time whilst trading I was confident in what I was looking for whilst in a trade. My entries were based upon hitching a ride with the big movers and shakers. If I was in and we weren't moving my direction I could take an exit without much damage to my capital.

 

It is pretty much what I feel I have been looking for in my trading for quite some time. I was lost a bit on exact entrance points and it was causing anxiety. It is hardly a "holy grail" but I had been searching for something that assisted my analysis for a while.

 

That brings me to the next finding and that was that entries don't mean shite if I am getting in on the wrong side. It has been tough adjusting my trading to follow the trend as I am a contrarian by nature. That being said, the days that we had obvious trends and I followed them I made good gains. It has proven to me that there is more Profits to be made on the trend following side. I may feel like a hero being able to pick a market bottom or top with my s/r levels and analysis but it doesn't put money in my bank account.

 

Again this brings me back to the important and relieving decision I made last week with my trading. As a hobby it might be good to stroke me ego with how good I am at picking directional changes in the market but for business it is far better following the trend. As much fun as I have trading, I must always remember I am doing it to make money. I'm not going to kid myself any longer by thinking it is ok to be trading and not making money. I am doing this to make a living and it is important to be treated as a business.

 

So this week I spent 4 of the 5 days doing my best to stick with the trend. The possibilities were presented to me on Wednesday when I made an 8.5 point gain. The effects of fighting the trend were seen the next day with a 7.75 point loss. My IQ doesn't need to be in 100's to see where the profits are. I did a great job on Monday, Wednesday and Friday of finding the trend and acting accordingly. Tuesday I also did a good job of sorting through the chop until finding my legs and bringing myself back from a losing position.

 

So really having 3 out of 5 days being profitable is a great advancement. I am extremely happy with that outcome. I pulled in 7 points for the week which is ok. It is better than a losing week and I know where I could improve on the upcoming week. Reducing my trading to only working in the direction of the trend should allow me to keep risk minimal and maximize returns.

 

I feel I made a good number of trades this week. The style of getting in on half a position and pressing it when it moves my direction is working well for me. It suits my style of trading well. My results for the week are as follows:

 

Total Trades: 33

Wins: 17

Losses: 16

Long Wins: 5

Long Losses: 9

Short Wins: 12

Short Losses: 7

Win %: 51.5%

Long Win % : 35.7%

Short Win %: 63.1%

Points Gain/Loss: +7

Risk/Reward Ratio: 1:1.3

 

It turns out that even though I took more losses on the long side than winners, the long trades only resulted in a small loss. The gains I made from the long side put me into profit for the week which was good. I kept a had a good risk/reward ratio for the week which can be improved upon for next week. If I can keep my Win% at 50% or higher I will be pleased.

 

One day made most of my gains and then one day took them away. It is important for me to work on consistency after a good gain in the market and not presume I know better than my plan. Ego got in the way and it is something that needs to be kept in check after a good day of trading. The moment I begin making my trading personal is the moment I falter from the plan.

 

For following my plan this week I have gained a 6 out of 10. It is an averaged score derived from the daily scores out of 10 I give myself. All in all it was a good week that showed great improvement upon the past couple of months. I have a strengthened confidence in my plan and my mentality towards my trading. The focus now goes upon building on that and instilling consistency in my trading. I feel we are at a very interesting time in the markets.

[jasont 10]

Weekly Analysis

 

The affect the new bailout plan will have on the market is no doubt on every traders mind this week. Granted it is the biggest news we have had in quite some time and it will affect the markets first hand. Since mid September we have been trading in a 100 point range on the S&P and a 1K point range on the Dow. It is a large volatility expansion and to me has represented some large exchanging of ideas as well as money.

 

The volume as we made the recent bottom has been extremely high on both the S&P and Dow. In fact it has been higher than the January, March and July lows quite substantially. I guess the key question here is, are we buying or selling. For me things are pointing to buying but I could be wrong and don't overly care if I am. I just like to have some sort of idea in regards to where we are headed and go with that.

 

I guess from a technical standpoint we have been traveling lower for almost a year now. That in and of itself doesn't mean much as there is no time limit on how long we can fall. Looking at a much longer term standpoint we have made a double top with the 2000 highs. That suggests we could see a further decline from a macro standpoint. However for the shorter term, mainly talking this year we have struggled to push much beyond the July lows with increased interest, meaning more volume. We are still very much in trend down mode but the charts are suggesting at least a short term rise in a downward market.

 

That is just the charts alone though. The VIX has hit levels last seen in 2002 prior to the extension of the rising market we had seen. What is also interesting is that the low levels we saw in 2006 on the VIX were also levels seen in 1994 prior to the advent of the Tech Boom. This doesn't mean we are going to see another strong run higher from where we are but it is something to be mindful of. It is just another piece of the market puzzle that can assist with a longer term view.

 

Gold at this stage appears to be running out of puff it had leading up to January of this year. Failing in July to break the January highs signals to me that the flight to safety of Gold may be over for the moment. In fact a substantial easing may be warranted from the macro standpoint.

 

Oil appears to be in the same boat, in fact many commodities are beginning to see this occurrence. If one was seeing this weakness I would put it off as circumstantial, the fact many commodities are seeing this easing leads me to believe funds are being pulled out and placed elsewhere.The above mentioned does encourage further buying in stocks as we see inflation become less of a problem and greater cash flow available for companies.

 

The USD has seen some further buying leading into the bailout proposition this weekend. We could be setting up for further downside movement in the face of the USD taking on more debt. On the other hand, although the Government is taking on "bad debt" should the housing market begin to pick up again, that bad debt may in fact become quite the asset. There is suggestion that foreclosures will be avoided as much as possible so if that is the case, their loans they hold could become valuable once affordability comes back into the equation.

 

So that brings us to an interesting situation. We still are faced with a ban on short selling. Whilst that is in place I still believe it is extremely difficult for us to move below our recent low. With the above mentioned pieces to the puzzle, I am swayed towards more of a buying bias. At this point I don't suspect anything more than a bounce in a down trending market. Though I don't rule out the possibility of a market bottom, I just think its a little early to think it. It also isn't good for my ego, trying to be a hero by picking market bottoms is bad for my health.

 

I will keep an eye on the news and believe we may be in for another volatile week with big news. The bailout plan has been released and I think is likely to be voted on by October 1st. I do believe acceptance of the plan is likely however it could be rejected just as easily.

[firewalker 10]

So that brings us to an interesting situation. We still are faced with a ban on short selling. Whilst that is in place I still believe it is extremely difficult for us to move below our recent low. With the above mentioned pieces to the puzzle, I am swayed towards more of a buying bias.

 

Nice read jason!

 

Just one comment, I'm not sure how much this ban on short selling affects the markets... but I've looked at several stocks that were affected previously because of a ban on short selling (in July) and - apart from a temporary lift in prices - it didn't prevent them from going lower.

 

Have a look at Fortis, it's as low as 5EUR per share, while they denied short selling on Euronext on all major banks two weeks ago. At that time it was trading around 7-8 EUR...

 

I would be surprised if we make new lows to be honest, last week looked like attempts of buyers, but this morning we've already dropped quite a bit, so we are definitely not out of the dark yet imo!

 

Good trading this week.

[jasont 10]

Hey FW,

 

Thanks for the comments. I had a theory that any selling beneath our previous low on large scale would be a result from traders holding long positions way back in April 2005 for memory. As to get beneath those levels we had to be selling previously owned stock. I had a look at Fortis and it was in a similar position but managed to drop well beneath its recent lows.

 

Therefore I am willing to say my theory was flawed on the basis of thinking that not many traders holding the stock from then would be willing to sell now. Obviously with yesterday's market action we have pulled beneath the recent lows, though how far we go from here is anyone's guess. We could pull back after the extreme move or we could pick up momentum.

 

All the best mate.

[jasont 10]

Trading For 29th September

 

Today's Trading Goals:

 

Identify The Trend And Note Changes In Trend Where Needed

Only Place Trades In The Direction Of The Established Trend

 

9:23 Market has seen a decline of roughly 18 points from Friday's close. Not exactly what I thought we might see in the face of the bail out possibly being accepted this week. Either way the most recent trend is currently up. I'll follow that at the open should it continue but be cautious of only attempting a partial or full gap fill. Other things do suggest up as the intended direction of the market. No major news announcements are due today so no important times to be weary of.

 

9:36 Took long trade at 1294 as volume came in and we saw a slow down in price decline. We continued to trade lower and took a 2 point loss. Currently Tick is negative, market is moving down heavily with volume supporting the decline. At this stage the short side is the safer bet.

 

9:41 Pre market uptrend broken.

 

9:49 Putting ego aside, we are down, Tick is negative and volume supports the decline. Still no decent move to short into at this stage, will wait for some sizable retracement prior to entering on the short side here.

 

9:54 Gee this is crazy on the selling side. Is this some sort of mini crash? There is very little interest on the buying side. Straight down from the open. We registered a volume extreme and Tick extreme as we reached the 1170 support area.

 

10:04 Hmm took a couple of short trades that were stopped out and then finally had one going but its trailing stop was hit early. Tick is having trouble breaching the zero area, volume extreme at the recent bounce peak, still in early market downtrend at this stage.

 

10:07 Down trend broken.

 

10:11 Taking a break as I am making a mess of my plan. Don't feel right trading it at the moment.

 

10:29 Downtrend has been broken. Tick still hasn't made a considerable move into the positive area. Volume declining on this rise though we are seeing Tick divergence at the moment.

 

10:49 We have the first decent move into positive territory on the tick though it has now been rejected. Volume supporting the move higher, immediate trend is up.

 

10:55 Calling it a day, loss limit reached, not sure what I can say, I just had an extremely off night.

 

Daily Wrap Up

 

I am actually a bit lost on what to say today. I think my analysis was good for the broader trend. Picking up on the fact that we were on a down trend mode. I do believe that when it came to placing the trades though I made emotional rather than business decisions. By all means I would not like to remove all emotion as it does serve some purpose however I would not like to base my decisions purely upon them.

 

I had one good trade which was a short trade at roughly 10am after taking a couple of losses. I scaled into it which was good and I took a small gain from it as we were stalling. The entry was good and the initial profit taking was good. That is pretty much the only trade which was according to plan.

 

I believe what I did on the best days last week was have patience. I would identify the point for an expected reaction and wait for that area to be reached. I would use the 5 minute and 1 minute chart to identify those areas and if we hesitated there I would see if big volume was coming in. That was the big difference between my good trades last week and today's trading.

 

I am going to be honest and say I was disappointed with my performance. Last week I had a losing day like today and I could easily identify what went wrong, I didn't trade with the trend. I brought my ego to that trading day and the results showed. Today was a different problem, it was lead by emotions. Possibly the volatility had me on edge and that is something to be aware of during the next few days. I cannot change what happened today but I can learn from it and that is a positive.

 

I will do my best to improve tomorrow and push for more patience waiting for trades to come to me. Watching the 3 second chart too much does trigger my emotions when we have volatile days so I will make an effort to watch the 1 and 5 minute charts more. For following my plan today I give myself a 1 out of 10. I took an 8.5 point loss which is not the best way to begin the week however I now have to focus on the challenge of improvement.

 

[firewalker 10]

Therefore I am willing to say my theory was flawed on the basis of thinking that not many traders holding the stock from then would be willing to sell now. Obviously with yesterday's market action we have pulled beneath the recent lows, though how far we go from here is anyone's guess. We could pull back after the extreme move or we could pick up momentum.

 

All the best mate.

 

Extreme was indeed the word for yesterday

 

I won't disrupt your journal much, but I was wondering as you pay attention to VIX, I was wondering if you have any charts from the VIX peaks during the previous bear market. All I could find where charts starting somewhere in 2003. But yesterday's 'off the scale' peak hasn't been seen in the last 5 years...

 

Edit: sorry, just found a chart going as far back as 1995 on Yahoo... looks like yesterday's peak was about the highest ever?

Edited September 30, 2008 by firewalker

[jasont 10]

Hey FW,

 

You're not disrupting my journal at all. I appreciate all the comments that I get here as it all helps me learn. I was just about to send you to Yahoo to get those charts. My understanding is that the recording of the VIX began in 1990. I have included the link to the chart below that I use from Yahoo. It has from 1990 onwards.

 

The peak we saw on Monday was just a touch higher than what we saw Oct 98'. It is interesting to note that Oct 98' we were still rising on the Indexes yet the VIX was also rising. Thanks for the comments mate, appreciate the support and interest.

 

http://finance.yahoo.com/echarts?s=^VIX#chart1:symbol=^vix;range=my;indicator=volume;charttype=candlestick;crosshair=on;ohlcvalues=0;logscale=on;source=undefined

Edited October 1, 2008 by jasont

[jasont 10]

Trading For 30th September

 

Today's Trading Goals:

 

Identify The Trend And Note Changes In Trend Where Needed

Only Place Trades In The Direction Of The Established Trend

Only Place Trades At Potential Reaction Points

 

9:03 Currently we are about 20 points above yesterdays close. We are in a longer term uptrend during the pre market action but respecting a shorter term downtrend at this stage. We just had a volume extreme at the 1139 area which coincides with the longer term uptrend. Still some time before the open though. We have major news at 10am so I will stay out of positions around that time.

 

9:41 Market is currently ranging with wide volatility. Currently respecting the pre market downtrend. Tick is ranging across the zero area after opening rather positively. From the look of the action thus far we may see some choppiness today.

 

9:57 Took a short trade on half position at 1235.50 and took a 1 point gain. Market moved down but kicked back up again. Near news so didn't want to press it. Tick still playing across the zero area, volume supporting the recent rise.

 

10:06 Initial downtrend broken. News brought positive tick readings and break of downtrend. Still have another downtrend from pre market in action but for now we have made new market highs.

 

10:13 Broader downtrend broken. Now in new up trend with Tick supporting the move showing readings above the zero line.

 

10:47 We have trended up to 1150 and things have been slowing down up here. Still trending but the upward moves have been getting shorter. Volume has declined on the recent push higher. Haven't placed another trade.

 

10:52 Going to call it a night here. Decided to make today a relatively quiet day so I can get myself back into the habit of analysing the markets.

 

Daily Wrap Up

 

I wanted to give myself one day of easy trading and look to end the day ahead. Just something to give myself a little confidence boost after Monday's trading. If I ease my trading too much though it can breed fear of taking more trades so I will get back into the rhythm of trading more tomorrow.

 

Today I took one trade which was a good attempt at seeing us go lower. The entry was good as we were trending down at that stage and made a new low whilst I was in. We had the news in a few minutes and took an exit at a reverse with big volume.

 

For following my plan today I give myself a 4 out of 10. There was numerous trades I could have taken on the long side but opted instead to keep it a quiet night. I don't want that to be a regular occurrence, just my way of getting back into the market after a tough day. I did well sticking with the trend with my trade and my analysis had me identify the trend well. I ended the day with a 1 point gain which isn't much but its a positive result.

 

[jasont 10]

Trading For 1st October

Today's Trading Goals:

 

Identify The Trend And Note Changes In Trend Where Needed

Only Place Trades In The Direction Of The Established Trend

Only Place Trades At Potential Reaction Points

 

9:02 Currently we are down about 10 points from yesterdays close. We have seen a downtrend for most of the overnight market but the most recent trend is up. We saw some strong volume halt the two previous lows which were consecutively higher. It will be interesting to see if we continue the trend into the open. We are residing in yesterdays value area which will be interesting also. There is some major news at 10am so being aware of any open trades near there is essential.

 

9:35 Movement is down on increasing volume. Hitting support area though big volume isn't coming in. Tick is showing negative numbers.

 

9:44 Took a short trade at 1253.5 but market wouldn't drop took a 0.75 loss on the exit. Downtrend now broken. Tick moved into positive numbers, volume didn't support the rise.

 

9:55 News in 10 mins so not going to place any trades yet.

 

9:59 Volume dropped right off in the past 10 mins.

 

10:02 Took a quick short at 1253.50 to get on the back of this big drop from the news. Following the broader downtrend from pre market. Took an exit around 1251.25, a bit early on that one. Only on half position unfortunately.

 

10:28 Fark me, I have gone a-wall with my trading and tried shorting the current slow down about 4 times. Now 8 points down. The idea of shorting this isn't even in line with the recent trend. Fark me.

 

10:44 Well I either get my ass into gear here or I call it a night. I'm going to try putting myself back together.

 

10:51 Burying myself further I'm going to call it a night. 10 points down what a farking disgrace.

 

Daily Wrap Up

 

Well reaching my weekly loss limit gives me time for a break for the rest of the week. I have picked up on an interesting correlation between today's trading and Monday's trading. On both Monday and Today I took numerous attempts at shorting the one trade idea.

 

On Monday I took 5 trades in 10 minutes to short the market. Today, I don't have exact figures but I think it was roughly 4 trades in 10 minutes trying to short the market. What is interesting about both days is that the trade idea wasn't the problem. We in fact did turn down at both points. On Monday the move down was from 1182 to roughly 1166.50. Today the move was 1151.50 to roughly 1144.

 

So that had me thinking. Today I was conscious that 1151.50 would be the reaction point should we look to turn down. I in fact took a trade at 1150.50 with my stop originally at 1153.50. We didn't go anywhere near 1153.50 prior to turning back down but in the heat of the moment I got caught up in the emotion of yes it is, no it isn't. In fact I would have done better to leave my stop there and if it was hit, done less damage than what I did do.

 

So in amongst a couple of poor trading days I have found what I believe to be a major issue with my trading that has in fact plagued me for much longer than just this week. In the past I have entered early on trades, in fact some were not early but I would take a quick exit thinking that my idea was no longer valid. I believe the problem stems from my early exit strategy. I don't have a solid one. I use a round about time frame to exit early or a "we moved quickly against my position by a few ticks" approach.

 

Those right there seem to be approaches that look for ways to lose money rather than ways to make it. In the break I have from live trading I will assess my early exit strategy and implement a rule that can prevent me from blowing up on one trade idea. My biggest strength I have is my analysis so I need to make my plan work with that to its advantage. Right now I am using analysis to get into the markets and emotions to get out. Easy to see there is an imbalance with my trading.

 

I'm not exactly sure what will be done in order to fix this recurring problem. I kind of feel like a kid who is learning to catch a ball. He knows it is coming but puts his arms out to catch it too early.

 

For following my plan today I give myself a 1 out of 10. There was a good entry on the continuation trade which was my second of the day. After the news came out we plunged lower and on the pullback I took a good entry to go in the direction of the trend. Unfortunately an early exit (plaguing me again) took me out too early. Not because I trailed my stop too tight but because I got emotional about the position.

 

Call For Help

 

In fact I am going to ask if anyone reading this has suggestions for me to improve my early trade/early exit problem. I don't believe my market analysis is my issue, if people believe it is please post here to help me see. Any advice people have is greatly appreciated.

 

[brownsfan019 17]

On Monday I took 5 trades in 10 minutes to short the market. Today, I don't have exact figures but I think it was roughly 4 trades in 10 minutes trying to short the market.

 

IMO that is a serious problem. I can't see any reason to average 1 trade every 2 minutes over a 10 minute timespan unless you are a true scalper, which I don't believe you are.

 

So I would start there - more rigid rules for entries.

 

I can only suggest taking a look at the 20 EMA thread or Steve's thread for some ideas.

[firewalker 10]

In fact I am going to ask if anyone reading this has suggestions for me to improve my early trade/early exit problem. I don't believe my market analysis is my issue, if people believe it is please post here to help me see. Any advice people have is greatly appreciated.

 

I know this isn't much... but if you're exiting too early, is it because you have a specific points target in mind where you are normally pleased with? Or is it because you fear the market may suddenly reverse 'out of nowhere' (yesterday's spike on the news about Buffett for example caught me by surprise)?

 

I've attached a chart, with just a very simple drawing of some lines. These aren't exactly trendlines, but they do help in staying in a directional move for some time. Depending on context, I use demand- and supplylines to scale out. The lines on the attached are not how I would trade (they probably resemble wasp's strategy better), but they do prevent you from taking +2 points or +3 when +7 or +8 or available. They won't make you bag homeruns though, but I'm not sure whether that is your intention.

 

Good luck!

[Soultrader 12]

Hi fw,

 

Curious to know what the bands on your TICK chart are? Thanks