Trade Report 20 April 2018

Posted by BMoreTrader on April 20, 2018
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Swing Trades

Today I framed four swing trade candidates. Because three were channel signals to buy at the open, those three fired. The fourth one never reached the target entry point.

Ten positions closed today for a total realized gain of +9.3R. Charts follow below. After a few of the oil sector plays hit their stops, I moved the stops up for the others. Continued weakness took those out, but EOG seems to have survived the day.

Currently holding 13 open positions at +4R.
Long: ABX, CBRE, GLD, EOG, LMT, LRCX, NKE, RL.
Short: HSY, NYT, BMY, MRCY, XLP.

Day Trades

Friday is the one day currently I can generally expect to have available to day trade. I missed some of the large moves while managing the swing portfolio, but that’s ok. I’m not expecting to capture every move, nor do I need to. I ended up making 24 day trades with a net +3.8R.

Thoughts

I am currently reading Market Mind Games by Denise Shull. While the book tries to present the information in the more digestible setting of a fable, the information is dense and requires some thought and time for integration. I had two a-ha moments while reading this morning before the market opened. the first had to do with fighting trends which I certainly did today, and for which I intend to write a separate post. The second is best shared by quoting directly from the book:

Now I am certain that part of the irresistible seduction of markets is not the money but the tapping into an innate human urge, desire, or force to grow. It strikes at the core of competitive and adaptive instincts and serves up for the taking any unconscious psychological set-ups one has.
Your pschye doesn’t actually care much about your account balance, it cares about your emotional capital because it is your most important asset regardless of whether you are in front of the screen or not.

I am certainly hooked on learning and growing, and if there is any reason I have stuck with trading for as long as I have it is because I recognize that slowly but surely, it is helping me to confront my issues and become a better person. Trading is a psychological discipline that requires a certain amount of knowledge, but depends extensively on the amount of presence and awareness one can bring to the market. Not just awareness of the market, but also self-awareness. Anger, frustration, joy, or even the weather can affect a person’s view of the market and thus influence the account balance.

As I continue to make these trade journal entries, I expect to also start adding notes about my mental states and feelings. As I reported on 18 April, having decent overall results while aware of not so great emotions is to be celebrated. Which are the emotions that I can trade with, and which ones are strong enough that my account balance will be better served by not trading?

Trade Report 19 April 2018

Posted by BMoreTrader on April 20, 2018
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Swing Trades

Today I framed only one potential trade (PVG) which did not fill. I apparently had a left over order on the platform though that got me into another position (XLP).

Five trades were closed today by hitting their stops. One was a double position, so only four symbols: KO, AEM, ESPR, and QCOM.



Net for all trades closed today: +3.82R
Currently holding 20 open positions at +16.78R.
Long: GDX, V, CVX, XLE, ABX, CBRE, GLD, MSFT, CSCO, DVN, EOG, PXD, SLB, USCI, LMT.
Short: HSY, NYT, BMY, MRCY, XLP.

Day Trades

I had no time today to sit and watch the market, so I have no day trades to report on today.

Trade Report 18 April 2018

Posted by BMoreTrader on April 18, 2018
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Swing Trades

Today I framed three possible trade targets: BMY, TSLA, and MRCY. I was filled on two of the three. After a nice short trade in BMY, I am short again:

Also short MRCY:

Four swing trades closed today.
GRUB had a nice large pop yesterday that finally gave me confidence to move my stop up to NLD2 (No lose plus dinner for two). I had been patient with the trade, but the new stop got hit today. Net: +.22R

One other winner got closed out today, MRK. This was a breakout play from a pinch condition. I started moving the stop up after price made it to the +3 Bollinger Band and sold off yesterday. Final result: +1R.

Two trades closed at losses today. I believe I should have exited these sooner. The market has been in a sideways state recently, so I let my patience keep me in these trades that were either not going strongly my way or working their way against me. Short THC closed at -.8R and Long NKE closed for -.57R.

For the day, I have 2 less swing positions open, so a total of 24 positions currently at +22.2R.

Long: GDX, V, KO, CVX, XLE, ABX, AEM, CBRE, ESPR, GLD, MSFT, CSCO, DVN, EOG, PXD, SLB, USCI, QCOM, LMT.
Short: HSY, NYT, BMY, MRCY.

Day Trades

I was once again able to watch the market for the first 60-90 minutes and made 15 day trades. Net result was +1.88R. There were several order entry mistakes that got me into positions in places I was not planning on entering.

I primarily use the BookTrader at Interactive Brokers for the Dow Mini Futures when I day trade. My preference is to have the order transmitted as soon as I click on the appropriate spot. I’ve gotten stuck in the past when IB asks for confirmation, so this morning I went to put an order in ahead of time so that I could make it through the IB prompts before I wanted to be in the market. Unfortunately, I entered a Stop order instead of a Limit order, so it filled immediately. While I could have chosen to exit as soon as it filled, I decided to stick with the position and worked my way out of it. This did however shift my emotional state, and I ended up making 2-3 more order entry mistakes again as I either clicked on buy when I meant to sell, or submitted a stop order instead of a limit. Today was a sideways quiet sort of day, so I was able to work my way out of some of these mishaps, but I also stuck around too long and gave back gains that I could have had in hand.

Not my best day trading, but I’ll pat myself on the back for staying collected while fixing problems.

Trade Report 17 April 2018

Posted by BMoreTrader on April 17, 2018
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To start reporting on my trades, I’m going to develop a format for a standard assessment of my positions. I will separate day trades from swing trades and report number of trades opened and closed with each, the R-value of all trades closed, and the R-value of all trades open. This will also be a learning journal entry for me to remark upon any important takeaways I might have from my trading experience for the day.

Swing Trades

I framed and entered orders for 4 swing trades before the market opened this morning. The candidates were INTC, LMT, KMB, and MRCY. I received fills for two long positions in KMB and LMT. KMB went on to hit its original stoploss later in the day (-1R), so net for the day I am +1 open position. I have 26 open swing trades, with a net +20.13R.

Long: GDX, V, KO, CVX, XLE, ABX, AEM, CBRE, ESPR, GLD, GRUB, MRK, MSFT, CSCO, DVN, EOG, PXD, SLB, USCI, NKE, QCOM, LMT.
Short: HSY, THC, NYT.

Day Trades

I was able to sit in front of the screen for just over an hour today in the morning and a half hour just before the market closed. I made 6 day trades which netted +2.05R.

Indicators summarize price action

Posted by BMoreTrader on May 6, 2016
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Belief:

Indicators summarize price action.

What this means to me:

Prices change over time. Indicators collect the price data over time, perform some mathematical functions with that data, and provide a new number that attempts to describe the price action.

What this belief gets me into:

Learning about indicators.
Collecting data.
Exploring which indicators fit my beliefs about the markets.
Building systems using indicators.
Relying on indicators instead of being in the now.
Having more criteria to follow for an entry or exit.
Being confused by conflicting indicators.
Considering how the indicator influences or reflects the psychology of the market.

What this belief gets me out of:

Making decisions by gut feel.
Taking total responsibility for my actions. (e.g. The indicator said go long.)
I don’t have to look just at price.
Looking at previous price action.

Limitations of this belief:

Price action can change faster than an indicator can adapt. Using indicators requires understanding not only what the indicator does but what it tries to say about the price action and the market psychology. Indicators can offer conflicting viewpoints.

Utility of this belief:

This seems to be a useful belief for the further study of indicators. It is simple, clear, and promotes further learning.

Conclusions:

Indicators are a tool for the trading tool box. They need to be studied, understood, and tested to determine how they fit my trading beliefs and style. Some will be useful for the work I wish to do, others will not. Trying to use too many tools at once will make the job harder. Selecting the proper tools and using them properly will make the job easier.

Options increase leverage

Posted by BMoreTrader on May 4, 2016
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Belief:

Options increase leverage.

What this means to me:

Options are a trading tool that allow me to put fewer dollars on the table to make a trade.

What this belief gets me into:

This enable me to hold more positions that trading stocks alone.
I need to understand options and their pricing.
I have to make sure the option is liquid enough to trade.
I have to subscribe to more market data.
It is easier to put on large positions.
I could have positions that are too large.
Options activate my excitement part.
Satisfying or keeping my excitement part in check.
Examining why I need leverage.

What this belief gets me out of:

Having to only trade stocks.
It reduces the limitations of my capital.

Limitations of this belief:

This belief seems to be more of a fact.

Utility of this belief:

This is certainly more useful than options are dangerous or options are risky. There does not seem to be any emotional charge with this belief.

Conclusions:

The real issues to examine here are why use options and why use leverage? What do those items represent for me? Options are a leveraged trading instrument. How I use options and leverage are the real issues to be examined.

Options can be used to limit risk.

Posted by BMoreTrader on April 27, 2016
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Belief:

Options can be used to limit risk.

What this means to me:

Options are a tool and can be used to change or create different risks for trades.

What this belief gets me into:

Studying options.
Learning about option markets and pricing of options.
Learning about the different price characteristics of options.
Looking for ways to limit my risk.
Looking for complex solutions to simple problems.
Determining (some of) my risks when I put on a trade.

What this belief gets me out of:

Accepting all the risk for a trade.
Complexity can create knowledge or vision gaps, so using options may keep me from understanding the larger vision of a trade and how it might turn out.
Taking full responsibility for a trade (The option has me covered.)
Options are not available for all markets, so this could keep me out of markets without them.

Limitations of this belief:

Not all risks are covered by options. Options introduce another level of complexity to the market and trading systems.

Utility of this belief:

Knowing about options can create new trading systems, positions sizing strategies, and offer protection from gaps.

Conclusions:

Options are a two-edged sword: they offer advantages and solutions to certain trading issues while also introducing complexity and greater knowledge requirements. The complexity creates more opportunities for mistakes but also may create more trade opportunities. Limiting risk is a useful application of options, however the realm of options raises many more issues to explore and clarify.

Some stocks move smoothly

Posted by BMoreTrader on April 26, 2016
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Belief:

Some stocks move smoothly. Others gap frequently.

What this means to me:

Price action for different stocks shows different characteristics of movement.

What this belief gets me into:

Noticing the frequency and size of gaps in price movement.
Developing ways to measure and track changes in the characteristics of stock price moves.
Measuring and tracking opening gaps.
Developing trading systems that take advantage of stocks that gap.
Developing trading systems that take advantage of stocks that move smoothly.
Developing trading systems that avoid stocks that gap.
Developing trading systems that avoid stocks that move smoothly.
Believing that stock selection can impact trade returns.
Considering a belief that gaps are areas of support or resistance.
Considering a belief that gaps tend to get filled.
How does movement style relate to trend and/or volatility?

What this belief gets me out of:

Trades skipped or missed if a stock doesn’t meet the gap or smoothness qualification.
Observing that a stock that gaps frequently can keep me out of stocks that might blow past my stop.
Choosing to trade smooth stocks would keep me out of stocks that gap.
Choosing to trade gaps would keep me out of stocks that move smoothly.
All stocks move in the same way.

Limitations of this belief:

How does this belief get measured? Are those measurements accurate? How sensitive is a trading system to this belief?

Utility of this belief:

This belief provides a snapshot of how prices move and can be useful in developing both trade ideas and market selection criteria for a trading system. It urges me to be more observant of the market and develop nuances to my trading systems that could be very useful.

Conclusions:

While broad in scope, this observation about price movement will allow me to generate more refined ideas about how to trade. I expect other beliefs to flow from this foundation.

Choosing right stocks – part 2

Posted by BMoreTrader on April 25, 2016
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Belief:

Choosing the right stock is not a trading system.

What this means to me:

There are many requirements for a trading system. Stock selection is only one of them.

What this belief gets me into:

A trading system requires rules for entry, exit (for profit and loss), position sizing, and choosing a market.
Whatever the market, I will need rules for the other parts of a trading system.
If I have those other rules, does the stock even matter?
Choosing a stock is still part the system.
How do I choose a stock?
What do I need to know about the fundamentals of the business behind the stock?
What sort of price action do I look for in a stock?

What this belief gets me out of:

Claiming the result was from the stock, not the system or me.
It could get me out of paying attention to important news about a stock:
e.g. If the stock isn’t important, do I need to know about an upcoming merger?
Even having a system could keep me from looking at how I execute it.

Limitations of this belief:

Any belief that focuses only on the stock or the system and neglects the psychology of the person carrying out the trades or constructing the system is incomplete. Beliefs expressed in the negative leave open a wide territory for positive associations. If choosing a stock is not a trading system, what does it mean to choose the right stock? What does it mean to have a trading system?

Utility of this belief:

As with the previous post on choosing a stock, this is an incomplete statement. It points towards a truth that there are more criteria to success than choosing a stock, but otherwise is not very informative.

Conclusions:

This is a belief in need to further refinement. An uncarved block of potential, not to simply be discarded, but rather chiseled and cut until clarity emerges. Some of that clarity comes when statements are equivalency comparisons rather than negative exclusions.

Choosing the right stock – part 1

Posted by BMoreTrader on April 22, 2016
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Belief:

Choosing the right stock or market is choosing a proper trading vehicle.

What this means to me:

Choosing the right stock does not make me a trader or guarantee success in the markets. The universe of stocks is large and some have tendencies to gap or move in certain ways that are not helpful or counter to the ideas behind a mechanical trading system.

What this belief gets me into:

I need to know what sort of movement my trading systems are designed to capture.
I need to know if the stock tends to move in a disjunct or smooth manner.
I need to know if the stock has the liquidity or volume to me to trade to meet my objectives.
I need to know if the stock fits the price movement pattern sought by my trading system.
I need some degree of confidence that the stock (market) will exist for the duration of my trade.
This helps me limit my choices of trading vehicles.
I could spend too much time considering which stock rather than how to trade.
Part of designing a trading system must include determining what the requirements are for the stock or market.
Making sure I have tools to examine how a market moves.

What this belief gets me out of:

Ascribing winners or losers to stock selection.
It can keep me from trading markets that don’t fit my system requirements.
Considering how my psychology fits into selecting stocks.
Considering how well my tools for choosing the market work (Do I understand them and am I using them properly?)

Limitations of this belief:

There could be more markets to trade than my span of control will allow me to follow. I may be overwhelmed by the choices. Choosing the right market does not guarantee I will follow my trading rules.

Utility of this belief:

Understanding the way the markets I trade move and elements of their fundamental structure is useful to being a trader.

Conclusions:

This belief seems to only be a partial viewpoint. It needs more refinement or clarification. Both sides of this equivalency statement are very broad. I feel like I haven’t captured what I’m trying to say or need to say with this statement.