I'll probably be keeping my eye on things for the next two weeks, but I doubt that I'll do much trading. There's too much going on right now to worry about a thinly traded market. I might chime in here and there, but for now, I wish everybody happy holidays. We made it through the most insane market in years. Here's to hoping '09 is a little more predictable!
I've been a bit busy with stuff the last couple of days and I haven't had a chance to watch the market at all. It's actually kind of nice to be able to go back after the market close and find trade setups. It's so much more easy when it's not in real-time.
Friday looks like another busy day, so I'll probably stay out until next Monday.
I was dashing back and forth from my computer today and I really shouldn't have been trading, but I just can't give it up! It ended up OK, with a 4.4R gain. I probably would be upset with myself if I had lost money today.
I got out too soon on my successful trade as the market had a lot further to go. I was just so tired of being burned and I knew I wouldn't be able to monitor things. With the way trades have gone lately, I'm happy to finally make a nice gain. We'll see if my fortune continues. I still plan to trade very lightly for the rest of the year.
This past week was the busiest of the year for me, so I haven't been posting or trading. I did take a couple of dumb trades on Friday and lost a couple of "R". Hey, that's just the way I roll.
I will be transitioning with my work and with my future plans in the next couple of weeks and I'll keep everybody informed as things happen. I'll probably limit my trading for the next couple of weeks as I have an overwhelming number of things to get done.
I'll attempt to post as I have time.
My day was a wash. I was up $1,000 for a while, but things didn't go my way on a few trades. I found it difficult to trade today because the market flat-lined for several hours and didn't provide any decent setups.
The bulls should be encouraged by the last few days of trading. Things have really held up well despite everything that is going against the market right now.
I found this video of Peter Schiff to be quite entertaining. He really did a swell job predicting what would happen this year.
Although I lost a bit of money this week, I'm still chalking it up as a success. I was able to reign in my impulsive trading and slow things down dramatically by:
Yesterday I made two trades on DIA. The first trade was based on a bear flag that appeared around 11:30. I saw it developing and placed an order below it anticipating some dojis and a bounce off the 20EMA. Everything went according to plan, but things quickly reversed on me, and I stopped out around noon.
I had noticed the momentum divergence (MACD chart with yellow line) but I ignored it believing that there was no way the market could make gains after the dismal jobs report. Of course, whenever I assume something, I always get kicked in the pants. You would think I would have learned my lesson by now. Nope.
The second trade bailed me out. This time I paid attention to the divergence and bought at the moving average crossover a little before 2:00. I held on to near the close for a decent 2.34R gain.
Brian Shannon of Alphatrends provides an interesting and educational glimpse into his trading day. I think Brian's videos are an invaluable resource for anyone interested in learning technical analysis and market dynamics.
Corey Rosenbloom at Afraid to Trade continues to demonstrate how Elliot Wave analysis works on multiple time frames. I find Elliot Wave and Fibonacci numbers fascinating and Corey seems to have a knack for spotting patterns and a deep understanding of how markets work.
Charles Kirk demonstrates the rewards of discipline in trading and financial frugality.
Pradeep Bonde at Stockbee summarizes several popular trading books to help you find the one that meets your needs as a trader.
Tim Ferriss has a new TV show on the History Channel where he learns something in a week that usually takes 5 years to a lifetime. I left a comment on Tim's blog encouraging him to use his amazing abilities to learn how to manage his own money after he attended a Berkshire Hathaway meeting here in Omaha.
My "old school" or "dummy trades" today really helped me get back to the old feelings of unemotional trading. I avoided news, chat rooms, and many other bias-creating forms of information. That helped me focus on 30-minute charts and just a few candidates for trading.
I'll have to admit, I more fun trading today than I have had in over a month. I was even down $600 and it didn't bother me because I was trading what I saw and not what others were seeing.
My best trade today was CASY.
I took the trade after the narrow 10:30 candle on the 30 minute chart setting a protective stop (blue dotted line) right above the candle. The stock trended perfectly the rest of the day as you can see on the 5 minute chart.
I got jumpy as the market moved into positive territory and I sold when price broke the 9 period moving average. As in classic trends, the price bounced off the 20 MA and headed south for another nice drop into the close. I made 2.09R on the trade, but I missed out on another 3R. Part of my nervousness came because the market as a whole wasn't trending down (at the time I sold) and CASY was already down 13%. I thought the chances of it continuing down were slim.
I missed an opportunity on POT as well. Here's the 30 minute.
POT quickly moved in my direction and I moved my stop to break-even. I stopped out soon after and then POT moved down the rest of the day. I missed a perfect bear flag on the 5 minute chart.
I had a couple of long trades today that went against me. Overall, I made .87R on the day--my first positive day since November 19th.
November was my worst month since I started day-trading in August. I lost 2.73R for the month.
November also took a toll on me psychologically. I just couldn't seem to make things work week to week and I ended the month "Afraid to Trade" as Corey puts it. I avoided nearly the entire last week as the market rallied nearly 20%!
There are a few things that I think went wrong in November. First, I got caught up in shorter and shorter time frames to the point that I was getting stopped out of trades within minutes. Losing money that quickly created anxiety, so I'd lower my position size after my first or second loss. Often, when I finally hit a winner, my position size was so small that it didn't make up for the losses I took on the first couple of trades--which created more anxiety.
Second, I think I've tried to cram too much information into too small a time frame. What I mean by that is that I've learned an enormous amount of trading setups, techniques, indicators, patterns, etc., and too often I try to cram them in to every trading day, and I end up making too many trades in a frantic bid to "trade them as I see them".
Third, I let too much "noise" affect my trading. I read far too many blogs, listed to too many news programs, and spent way too much time in stock forums. Nearly every single time, when I traded based on some outside influence, I lost money--often very quickly.
Fourth, I made too many trades--83 in all. I traded 65 times in August and made 23R.
Fifth, the market seemed a lot more volatile in November, and many of my setups just weren't compatible with the type of volatility that we were experiencing. I should have been much more patient with my trades, and allowed the day play out a little more before I committed money.
When I started day trading in August there were days where I couldn't find a good setup, and I would end the day without trading a single stock. Lately it seems that I find dozens of setups which all seem to go against me.
I think I am going to try and step back from the five minute time frame to the 30 minute time frame that I was trading in August. I tried that today, and although I didn't find any good setups, I was much more relaxed and really felt good about staying out of the market because nothing "looked right".
I guess I should still feel good about how I'm trading. Last November I lost 17% trading the Zweig screen, and most of that disappeared in one week!
I decided not to trade last week with the Thanksgiving holiday and all that. Of course, last week turned out to be one of the most trade-worthy weeks in long time. Curses to you Mr. Market.
My job prevented me from trading yesterday which was an incredibly trade-worth trend day.
So I had a couple of hours today and the market see-sawed me out of a 1.5R loss. I'm getting a bit frustrated.
I'll be back tomorrow with a November wrap-up.
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