Trader P/L 2009

[thalestrader 14]

To cure the tendancy of anticipating a reversal (which I do too often) I started to play with the chartgame.com. It was mentioned by DB somewhere.

I think that it has the potential - after many hours - to reverse this tendancy and maybe allow one to leave the profitable trades to run (another thing which I don't do yet)

 

Gabe

 

Thanks Gabe and Db - that is a fun game! Too bad it does not allow you to short.

 

Will this keep an ongoing track record via cookies, or will it start as a new user each time you play?

 

Best Wishes,

 

Thales

[Gabe2004 10]

Thanks Gabe and Db - that is a fun game! Too bad it does not allow you to short.

 

Will this keep an ongoing track record via cookies, or will it start as a new user each time you play?

 

Best Wishes,

 

Thales

 

It keeps track (via cookies I believe)

 

Gabe

[Dinerotrader 10]

Hi imorgan,

 

Perhaps you would consider looking for stocks behaving as WFR did today. This is a common occurrence, and in many ways it is exactly the same as FNET yesterday only different.

 

Both stocks had early, strong moves, and each offered three buy points. Now, here is a caution, the third buy point off of any base usually finds that the rally out of that base is completely retraced or more. Therefore, when you have a strong move, either up or down, where two narrow consolidations at the highs breakout to new sustained highs, I typically do not buy the third breakout. This applies to intraday rallies as well as daily and even weekly charts. Late stage bases tend to be weak. The traders who had bought the first two breakouts are usually selling on the way out of the third breakout. If the third does not retrace, and the stock offers a fourth, I will sell into that fourth breakout.

 

Both FNET yesterday and WFR today offered three buy points. The first two led to positive results. The third breakouts stalled and a correction ensued. This much is almost scripted. Everyday, day after day you will see stocks behaving like this (for both rallies and declines). Here is where they are different: FNET's correction never ceased, and the stock never saw a new high. WFR, on the other hand, traced out a patter that some might call a "cup with handle." You can call it "macaronie and cheese" for all it matters. The point is that the stock recovered and made new highs. It did so at 12:35 EDT, more than three hours after the open. You will find these stocks breaking to new intraday highs after 12 noon. The often do so on the half-hour (12:30, 1:30, 2:30, 3:30). The time is not a requirement, just sharing an observation.

 

For a day trade, you have a fixed, limited time. Why bother messing around with buy or sell points that may or may not lead to desired new highs or new lows? Be patient. Be demanding (but not too demanding or you will create a trading checklist that will forever keep you out of the market).

 

Others may differ, and perhaps you will too, but the channels you are drawing do not look particular useful to me.

 

Also, I may only close about 38% of my stock trades with a profit. But, if I simply wanted to trade for tiny 5-10-15 penny moves, I could close a much, much higher percentage of my trades for a profit. In other words, most of my trades show a 5-15 penny profit soon after entry. My willingness to see which will go for a dollar necessitates that I allow many of these small profits to run to a small loss. I suspect that these channel breaks you are using here will perhaps lead you to a similar winning% as me, i.e. approx 38%. But your average profit will likely be much too small to overcome your high % of losses. Why? Because you are buying into resistance. As with FNET, many of these stocks will not go on to make new intraday highs, which means you will experience fewer runners.

 

You are new. Why start bad habits right from the beginning? I will tell you from personal experience, bad habits inculcated today will be damaging to you for many years to come. Why put yourself through that? I did. I hate to use such language, but frankly, it sucks.

 

Best Wishes,

 

Thales

 

That is exactly the wisdom I needed. I really appreciate your thoughts and ideas. You can expect better entries from me from now on.

 

Quick question: I know you usually put your stop loss at some natural support level below your buy but sometimes those seem like they would be too large to keep your loss average so small. Do you have a maximum stop amount you use in the event the natural support level is too far from the entry or does that just mean the R/R isn't good enough to take the trade?

[BrianNC 10]

Sim trading. Didn't get to the market until 10:30 or so. Decided to take a trade off the 466 tick instead of the 15 min as there wasn't anything really setting up on the 15min that I could see, but knew there would be some opportunities on the shorter time frame.

 

Had a buy stop at 1066.25 one tick above the last swing high where the top ellipse is. I didn't have time to set a sell stop before the buy was triggered. I had a 2 and 3 point target on 2 contracts as you can see on the first chart. I am trying out an ATM strategy on the Ninja Trader to try and trade a runner is the reason for 2 contracts. You can see the targets and the sell stop I had at 2.5 points below the entry.

 

The price hit my buy stop and pretty quickly went up to my first target and and misses it by 1 tick, comes back down and begins to make lower highs and lower lows. On the second chart you can see where I drew the down channel to show that. So I was starting to get concerned.

 

About that time my wife came in and started talking about how it looked like it was going down now, gonna be a loser, etc., and reinforcing my thoughts, so I pulled my targets down to BE and got out at BE (I wouldn't have gotten out of the trade if she hadn't come in and done that. ) Of course right after I did that it shot up and hit my 2 point target as you can see on the 2nd chart. Told my wife what happened and she suggested she needed to stay out while I was trading since she knew she influenced me to get out at BE instead of hanging in the trade. I said that I agree with that. LOL.

 

As an added note, I don't use the MA on the chart. I keep forgetting to take it off from my previous method of trading. Since I have been trading the price action only, I don't even notice it is there.

[thalestrader 14]

Quick question: I know you usually put your stop loss at some natural support level below your buy but sometimes those seem like they would be too large to keep your loss average so small.

 

If the loss would be too large, adjust your position size or skip the trade - there will always be others. Most of my losses occur after price has pulled back once and resumed its rally, allowing me to raise my stop loss. So, for example, I may have an entry at 35.75, with a stop loss at 35.25. My entry is filled, price rallies to 35.99, and then pulls back to 35.63. I raise my stop loss accordingly after price rallies back to or above 35.99. Price rallies to 36.02, and then collapses to 34.99, stopping me out for a 13 penny loss on its way down.

 

The initial stop is for those times where your entry is triggered, and price turns and drives right through that stop. It is an emergency, a disaster, a worst case scenario type of stop. My average loss is small because I rarely experience such a worst case stop out (though I do indeed have them from time to time).

 

More often, would be this example: I have an entry at 35.75, with a stop loss at 35.25. My entry is filled, price rallies to 35.99, and then pulls back to 35.74. I raise my stop loss accordingly after price rallies back to or above 35.99. Price rallies to 36.02, and then collapses to 34.99, stopping me out for a 3 penny loss on its way down. Of course, if I were buying or shorting in the middle of muckity muck like you then I would expect to see my worst case stop hit more frequently.

 

Best Wishes,

 

Thales

[BrianNC 10]

I will say this about trading S/R. I LOVE being able to set my stops to get in the trade and be able to walk away instead of having to stare at a chart all the time. I set a buy and sell stop before I went to church tonight, and when I got back it had hit the sell stop, executed the trade and my ATM strategy in NT got me out with the 2 points I look for.

 

Another thing, trading off the 15 minute chart, I just go look at it throughout the day, and if I see a setup, I place my stops and walk away. I love trading off the big picture. Of course it is still just sim trading, but starting to trade S/R instead of indicators has taken a lot of the tension, stress, pressure and whatever else I had been experiencing when sim trading or thinking about going live.

[Dinerotrader 10]

Another good learning day. My stop was too close to last natural stop. Would have been a good trade if I had trailed as I think I would have trailed it.

HGG (-$0.31/share or -1.7%)

 

[thalestrader 14]

Another good learning day. My stop was too close to last natural stop. Would have been a good trade if I had trailed as I think I would have trailed it.

HGG (-$0.31/share or -1.7%)

 

 

Stops should not be "too close to last natural stop." Your stop loss is either right or it is wrong. If it is right, it will take you out at a point at which price action is no longer immediatley favorable to your position. It can be wrong in too ways: It can take you out before price action has turned unfavorable, or it can take you out too long after price action has turned unfavorable. You seem to believe that your stop loss was wrong for the first reason.

 

Take a close look at where you entered, and see if you can find a more logical placement for a stop loss for a position entered at the point you entered. I suggest you do this by starting at the beginning of the day and marking off entries and initial stops.

 

Best Wishes,

 

Thales

[Dinerotrader 10]

Stops should not be "too close to last natural stop." Your stop loss is either right or it is wrong. If it is right, it will take you out at a point at which price action is no longer immediatley favorable to your position. It can be wrong in too ways: It can take you out before price action has turned unfavorable, or it can take you out too long after price action has turned unfavorable. You seem to believe that your stop loss was wrong for the first reason.

 

Take a close look at where you entered, and see if you can find a more logical placement for a stop loss for a position entered at the point you entered. I suggest you do this by starting at the beginning of the day and marking off entries and initial stops.

 

I marked up a new chart of HGG at higher highs where a buy opportunity looked reasonable and noted the corresponding stop at the last natural support level.

 

My thinking on the stop is that it should take you out before you lose more than you are willing to risk on one trade or take you out if price action starts confirming it is going to move unfavorably in comparison to the reason you entered the position.

 

Additionally, if price starts to move below the last natural stop that would be an indication through price action that there is a high probability that price will begin to move against you and therefore you should be out of the trade.

 

In my first example, I noted that I thought the stop was too close since price ran back very close to the natural support level and the moved back up. Given that support is more of a small range than it is an exact price my belief is that I should have had the stop $0.04 below the last natural stop to give a little wiggle room for support to hold. However, you have much more experience with this so your thoughts would be useful.

[thalestrader 14]

My thinking on the stop is that it should take you out before you lose more than you are willing to risk on one trade or take you out if price action starts confirming it is going to move unfavorably in comparison to the reason you entered the position

 

This should not be an either/or statement. The amount you are risking on the trade should be a function of position size relative to the difference between you entry and your stop loss. The stop loss is set by price action, not your account equity or risk parameters.

 

If you are risking 1% of equity and your account is 100k, then you will risk $1000/trade. If the difference between your entry and stop loss is $1.00, then you will trade 1000 shares on that trade. If the difference between your stop loss and your entry is $0.25, then you will trade 4000 shares on that trade. Adjust your position size to fit the risk, not your stop loss.

 

If you do not wish to adjust your position size, then you will need to forego trades where the risk exceeds your risk limit. If you have a 100k account, risking no more than 1% or $1000/ trade, and you wish to trade 2000 shares/ trade, then you will be able to take any trade where the risk is less than or equal to 50 pennies/share, and you will not act on any trade where the risk is greater than 50 pennies per share. Risk is always defined as the difference between your entry price and your initial stop loss.

 

That being said, in this example you are on a two minute chart. Since you entered on a new high without a pullback, then your stop should beneath the last high, or below the 17.01 high of the 11:06 bar.

 

Best Wishes,

 

Thales

[Dinerotrader 10]

This should not be an either/or statement. The amount you are risking on the trade should be a function of position size relative to the difference between you entry and your stop loss. The stop loss is set by price action, not your account equity or risk parameters.

 

I was just thinking about the broad theoretical use of a stop loss and I know many traders do not use position sizing to manage their stop loss. I agee 100% with your post.

[Dinerotrader 10]

2 trades

FFBC +$0.25/share or 2.5%

CVH +$0.04/share or 0.2%

 

Stuck to my rules and trailed stop at all natural stop points.

[Dinerotrader 10]

JDSU +$0.30/share or 3.8%

 

Just 1 trade today.

[bathrobe 10]

I caught a good portion of the move down after the fed announcement. Good Day

[HAL9000 10]

By accident :rofl:,

 

I have posted my sim results there:

http://www.traderslaboratory.com/forums/208/reading-charts-real-time-6151-18.html#post76194

 

Sorry,

 

Hal

[bathrobe 10]

Again, caught most of a very nice sell-off

[BrianNC 10]

You make that on the drop from the news at 10?

 

I had a buy and sell stop in at 10 (forget to check if news was coming out) and only had my target set for 1 point and when the news came out I got filled and hit my target in about a quarter of a second.

[bathrobe 10]

You make that on the drop from the news at 10?

 

I had a buy and sell stop in at 10 (forget to check if news was coming out) and only had my target set for 1 point and when the news came out I got filled and hit my target in about a quarter of a second.

 

Yes, but I do not trade the news based on whether I think it is positive or negative, honestly I do not even no what the news was.

[brownsfan019 17]

Alright, let's see if we can get this thread moving along again daily.

 

For those that are new to the thread, let me do a little recap...

 

1) I started the thread 3/2009 as a way to get myself better focused and doing the job.

2) For my purposes here, I am using a smaller account that I trade to demonstrate the good and bad w/ trading a smaller account in leveraged products.

3) Here's a few questions that were asked about what I am displaying here.

4) Here's an update done on 4/12 talking about my results.

5) May 1st update.

6) Discussion of the 3 cycles as I see that you can trade in a day.

7) About page 77 or so is where I take a breather from posting daily and enjoy the summer here.

 

Plan going forward:

 

1) Try to start posting daily blotters (like before).

2) Use this thread as a motivational technique to keep my eyes on the prize and get the job done.

 

Trading plan:

 

1) Focus on 'cycle 1' as I discussed in a previous thread that is linked above. Basically, trade in the AM when I know things usually are moving.

2) Focus on markets that I know and understand what movements to expect and how to treat them.

3) Generate consistent profits w/ minimal losses.

 

That's the plan, we'll see how it goes.

 

Welcome back and welcome to those that are new to me posting here!

[brownsfan019 17]

I traded 3 days last week and blotters are attached:

 

9/22/09: +$134.38

 

9/24/09: +$109.36

 

9/25/09: +$651.25

 

End of week: +$894.99

 

Blotters attached to this message. One thing you'll note going forward is that my blotters may be larger than previously as I take a few more trades and look to trade a market or two that I was not using previously (mainly grains).

 

 

I'll take it for 3 days of trading. I hope to get back on a regular, 5 day work week but sometimes things can get in the way.

[bathrobe 10]

Welcome back Brownsfan. I think the thread was a great idea.

 

Good luck to all of you in the final quarter of the year. Pretty hard to believe how quickly time passes.

[brownsfan019 17]

Welcome back Brownsfan. I think the thread was a great idea.

 

Good luck to all of you in the final quarter of the year. Pretty hard to believe how quickly time passes.

 

Yeah, time sure does fly by BR.

 

Glad that you continued posting here along w/ a few new people.

[brownsfan019 17]

9-28-09: +$343.12

 

Not the best day, but good ole soybeans gave me a quick and easy pop on the open to trade.

 

Also, me and the 6E are having some issues currently so I'm putting that one on hold till further notice. Going to focus on the ZN during that time and trade more contracts if need be to 'make up' any potential profits.

 

Oh yeah, bought oil and NQ. BLEW PAST my profit target today. One of those days where holding would have been prudent. As I've said previously, probably the hardest part of trading for me - 'leaving $ on the table'. Oh well, it is what it is for now.

 

Back at it tomorrow. Done by 10:30am EST.

 

[brownsfan019 17]

9/29/09: +$148.75

 

 

This is what not following your plan 100% will do. I screwed the pooch on the NQ today and dropped the ball on the ZS. ugh.

[HAL9000 10]

Once more just sim (6A).

 

Yesterday I used the NQ successfully.

Today the 6A.

 

But its scalping,

trend trading, maybe I will figure it out within the upcoming years.

 

Well on sim I have usually losers too,

100 $ or 200 $ each, but well on sim, at least finally I survive a day now.

 

Well, maybe my time is there.

 

But this was sim scalping with 1 or 2 contracts.

Edited September 29, 2009 by HAL9000
NQ -> 6A ;-)