Four trades were framed for today with three receiving fills. Two were channel trades with fills at the open. No trades were closed, leaving 20 open positions:
Long: AA(2), CAT, CBOE, DIS, EWI, GILD, HD, IR, KR, MSFT, PFE, RIO, SLB, STZ, TPR(2), WYNN, XME.
Short: SKT.
No time for watching the market today, so no day trades were made.
There were two channel trades today that were filled at market open. One position hit it’s exit point, OXY:
There are thus 17 open trades in the portfolio now:
Long: AA, CAT, CBOE, DIS, GILD, HD, IR, KR, MSFT, PFE, RIO, SLB, STZ, TPR(2), WYNN.
Short: SKT.
Combined, they show a return of +3.43R
There was no day trade update yesterday because I broke a rule and kept positions on overnight. Here’s how the morning went:
If I had entered my stop losses in the market, they would have been hit during a plunge down later in the day. The wisest move would have been to exit when I walked away from the screen. I was very fortunate that today, the market eventually moved back up and enabled me to bank, not just my daily +1R for today, but for yesterday as well. It was not pretty, and I’m sure part of the reason I held on was because it is a paper trading account.
If the point of paper trading is to practice good behavior, then I did not do that yesterday. It is the process of trading that I need to make my focus, not the dollar results. Letting day trades or swing trades become position trades is a common fault that will sink traders. This did not become a trade to sink the account, but it did demonstrate how attached I still am to the results rather than the process. The relatively new +1R target goal for the day may need to be dropped for a return to focusing on the process of trading and generating whatever return happens to come my way.
Today I framed two trades for entry: one long, one short. The short trade triggered, but with the selloff in the general market, the long did not. Nine trades also hit their stop loss, closing out positions in six stocks. The nine positions generated +3.54R. Charts for each follow below.
This leaves 16 open trades.
Long: CAT, CBOE, DIS, GILD, HD, IR, KR, MSFT, OXY, PFE, RIO, SLB, STZ, TPR(2).
Short: SKT.
Today I framed thirteen symbols for possible trade entries. Eight were filled and currently show +.47R for the day. The only one showing a loss for the day was the “2nd position” I added to PYPL. No trades were closed today. This brings me to 24 open positions showing +14.46R.
Long: AEM, CAT, CBOE, DIS, GILD, GLD, HD, INTC, IR, KR, MSFT, OXY, PFE, PYPL(3), RIO, SLB, STZ, TPR(2), TWTR, UNH.
Short: none.
I had just over an hour to make day trades this morning when the market opened. After three trades, I was up +.73R. I considered walking away, but committed to trading until my time was up, I had four losses, or I made it to +1R. I ended up creating two more losses when I reversed my position on the next set of trades and reduces my return for the day down to +.45R before my time was up.
Finally, I will post a chart of my day trades. They are not stellar results, and I could have done better with the window of opportunity I had today, but I want to start holding myself to the same level of accountability with the day trades that I do for the swing trades which means posting them here when they are closed.
I will have more reflections on trading with a target of +1R/day as well as the time crunch of possibly walking away before a trade closes sometime soon. Right now, I need to take care of myself by getting some sleep.
For today, I only entered orders to add a second position to TPR which was filled at market open. No other trades were framed, and no positions reached their stop loss or were otherwise exited.
This leaves me with 16 open positions showing +13.3R.
Long: AEM, BMY, CAT, GLD, INTC, IR, KR, OXY, PFE, PYPL, RIO, TPR(2), TWTR, UNH.
Short: none.
No day trades today due to other activities.
I had expected a move up today, but had no time to watch the market so had to let my open positions be my participation. Even now, I have yet to flip through the charts to see what happened. I expect to find some time over the weekend to plot out some possible trading cenarios for the next week. It is possible that some of the current positions will merit adding 2nd positions for potential longer term swings, but it is also possible that as I tighten stops up, they will be exited. The great joy of being a private trader is that I can exit and enter without any obligation to be in the market at all times.
Today I framed three trades for possible entries. I was only filled on one of them (UNH) which was a market buy at the open. One candidate gaped up past my entry point, and the other never made it to the entry point.
This leaves me with 15 open positions showing +11.78R.
Long: AEM, BMY, CAT, GLD, INTC, IR, KR, OXY, PFE, PYPL, RIO, TPR, TWTR, UNH.
Short: none.
No day trades today due to other activities.
With a strong up move in the market, I made sure to adjust my stops this evening in order to lock in gains or reduce possible losses. As most of the systems I currently trade look for pullbacks before entry into an uptrend, I suspect my number of potential trade candidates for tomorrow will be limited.
I framed no trades for today, and one trade hit its stop loss: JPM.
I consider this the price of distraction. The stop should have been moved up to break even after the hammer on 5/3. Having missed that during my time away from the screen last week, I could have had the stop at the Bollinger band mean, or even the PSAR dot. There was no reason to wait all the way to the original stop loss to exit this trade aside from lack of attention.
That leaves 14 open positions showing +7R.
Long: AEM, BMY, CAT, GLD, INTC, IR, KR, OXY, PFE, PYPL, RIO, TPR, TWTR.
Short: none.
As noted yesterday, I had no time to watch the market today, so took no day trades.
In my non-trading life, today was a very hectic day. It is really easy to see how I am not putting the necessary time into my trading at the moment. I have framed no trades for the past two days, even though I am sure there were candidates available. The rest of this week will be a challenge to find the time to trade, so I have to be willing to give back more than I would like on some other positions if the market changes direction. The other option is to close all positions, but I don’t believe current market conditions warrant stepping completely aside.
I framed no trades for possible execution today. Eight positions hit their stops: FNV, EQR, USO PVG, BMY, MRK, XME(2).
Knowing XME was to be closed today and seeing gold down at the open, I probably could have cut PVG earlier in the day:
XME had met the criteria to be closed at the end of yesterday, but I missed closing it. I tightened up the stop on FNV and got cut out on the second test of the bottom for the day.
Moved the stop up and exited the second half of EQR today on general market weakness:
Could have cut BMY after the PSAR flipped, but I was willing to be patient for the huge upside back to the RL270. In a market with no clear direction though, it’s better not to hold on to the weak candidates.
Was playing MRK for a bounce off the Bollinger band mean, but all it seemed to do after I entered was go down.
I had entered the stop as a trailing stop instead of a hard stop on USO, so got taken out on the spike down today. Not what I was expecting for a 2ATR stop from my entry point just a day after entry, but oil can be volatile.
Total restults for today’s closed trades: +.61R (but that includes the full value of the EQR trade. Without it, -.4R.) There are 15 current open positions showing +2.39R.
Long: AEM, BMY, CAT, GLD, INTC, IR, KR, OXY, PFE, PYPL, RIO, TPR, TWTR.
Short: JPM.
I had no time today to sit and watch the market, so I was not able to make any day trades. I may be able to catch the last hour of the market tomorrow, but from the looks of my schedule this week, I don’t believe I will be able to place any more day trades this week. Perhaps I will load up the replay in a simulator to keep my game in shape as I do have some time outside of regular trading hours that I can devote to trading.
The market seems indecisive. For yesterday and today, the major indexes closed very close to where they opened. With no clear direction from the market, it’s hard for individual stocks to move very far. My general observation is that when the market moves into a sideways quiet channel, I get chopped up and take losses looking for directional moves, whether continuations or reversals. These periods create my drawdowns. I’m still taking the trades as paper trades so that I can track where my equity turns around and learn more about what to look for when I will be trading real money. I want documented proof to back up my intuition of what happens to the systems I currently trade.
Returning to the daily posts about my trades, I framed 10 possible trade targets today and received fills on 6 of those. No trades were closed today. There are 23 current open positions showing +5.34R.
Long: AEM, BMY, CAT, EQR(1/2), FNV, GLD, INTC, IR, KR, MRK, OXY, PFE, PVG, PYPL, RIO, TPR, TWTR, USO, XME.
Short: JPM.
Today, I only opened and closed one day trade. Net result: +1R. Today I chose to be more selective on my trades. My goal was to bank 1R and then walk away. I got lucky and happened to do this on the first trade, so I sat and watched several other moves throughout the day. Some I missed. Some would have chopped me up. I need the experience and comfort of knowing I don’t have to catch every move and that my account can grow slowly over time. Making 1R each day will generate a stellar annual return. My plan is to stick to the 1R cap for 30 days. I expect it will take more than 1 trade each day in order to do this. On the flip side, I will limit my trades to 4 losers each day.
In baseball terms, my goal is to get on base (+1R). I can swing at the pitch whenever I think best. A loss is when the bat doesn’t connect with the ball. Four losses (strikes) and I’m back on the sidelines. A small win will get me another chance at bat and effectively shorten the distance to first base. I don’t need to hit home runs, and I’m not looking to do that right now. My hope is that each loss will be less than 1R, so that my max loss per day is 2-3R. If baseball players can earn millions of dollars with a .300 batting average, even netting +2R per week should get me the returns I’m looking for.
Due to some circumstances to be commented upon below, I was not able to make daily posts this week. Below is the summary of swing trades opened and closed for the week.
| Date | 4/30 | 5/1 | 5/2 | 5/3 | 5/4 |
|---|---|---|---|---|---|
| Framed | 4 | 7 | 4 | 0 | 0 |
| Opened | 4 | 7 | 5 | 0 | 0 |
| Closed | 1 | 2 | 0 | 9 | 6 |
| Return | -1.02 | -1.4 | 0 | -2.34 | +1.84 |
Remaining holdings are now:
Long: AEM, BMY, CAT, EQR(1/2), FNV, GLD(2), INTC, KR, PVG, PYPL(2), RIO, TWTR, XME(2).
Short: JPM.
I started well on Monday, but then my classic mistake occurred. Every time that I have blown up, it is because I have held onto a position too long, adding to it instead of exiting or reversing. This feeds into my desire to be right. There is also a touch of revenge trading when I do this in that I am usually looking to fix n earlier mistake, either missing a major move that I had framed properly but exited too soon, or if I get whipped back and forth changing directions because my position size it actually too large.
On Monday, I made a conscious choice to continue past my stopping point (unlike 25 April), and ended up suffering through the night and into the next day until I finally let the position go. This rattled me emotionally, so I basically made an effort to do the minimal amount of work necessary to manage my swing trades over the next few days. If I had been in a better mental state, I could have pared down some of the losses, or maybe even captured a profit, but those are only lessons I have learned after going through this experience.
On Friday, I started day trading again, and did reasonably well for the first two trades. Once again however, I missed a move and built up a massive position that was not moving in my favor. Strangely though, I did not have the same emotional connection to this position. Perhaps it was because I knew it was the paper trading account, but I also believe it was the dots I had connected during the few days off the screen.
As I mentioned in I am smart, I have a disposition to want to be right. I place too much effort and attachment to having each trade go my way, rather than a more healthy attitude of accepting what the the market gives and trusting my overall results to generate a positive bottom line. Wins and losses are like breathing in and out. They are a necessary activity for healthy living. This week, I believe I took a significant step towards wiring my brain according to the blue arrows in the diagram below as compared to the orange arrows which I believe have created many of my past disasters.
There is the possibility that this behavior will raise it’s ugly head again, but the re-framing and removal of the emotional charge gives me confidence that I can trade in a more healthy manner going forward. While there have been many psychological issues for me to confront on my trading journey (and likely more to encounter), I feel like this is the largest one I have yet to conquer. It set me back this week, but I believe I know more now about it and the feelings it brings on so that should it show up again in the future, I will be better able to act in a healthy and appropriate manner.
I expect to return to daily reports again next week.