It has been a while since I have posted anything up on the blog about what has been going on in my life and more importantly with my trading. I am still trading full time and glad that I have been able to trade through the historic markets that we are seeing right now. It has truly been amazing to see some of the things that have changed and the events that have taken place. I have been able to adjust and have had some of my best trading gains in the last few weeks.

A few things have changed in my life and my trading over the last few months. I have moved to a neighboring town and have my house for sale (that could take a while). I am studying for my series 7 and  hoping to join a prop firm sometime next year. My approach to trading has changed some and things are getting better for me.

In my last post I talked about my need to take on larger than average size in an attempt to make a day profitable. The problem I am having now, its kinda a good problem to have, is that I am unwilling to take on more size when things are going my way. Just a few months ago that if I was down $200 on the day, I would stop trading and if I was up $500 I would consider that a great day and stop trading. Now it seem that on average days I am able to make $800 to $1,500 with out even trying ( I Know that can change at any time) and my losses are still relativly small. Today was a good example of my unwillingness to get aggressive with a market that I was reading well. I was up over $1,400 during the middle of the day but gave back some gains during the afternoon selloff. I felt very confident that we would rally into the close and that the selling was overdone. I immeditally wanted to be long 2000 of the SSO to attempt to catch the rally. The only problem was that I was unwilling to risk ANY of my profits in order to try and catch the move higer. I would realisticly had to have atleast a .50 stop and 1.00 would probbly be what I really needed. So I would potentally give back all my gains and go down 1k. Admittily, that would be hard to swallow but I was right about the trade and the entry I wanted would have allowed me to catch the move with limited risk. I did not take 2000, 1000, 500 or even 100 on the trade and missed a 1.00 move that could have put me up over 3k on the day. I am wondering if my reluctence to take such trades is a positive defense mechanism that is keeping my greed in check or if I am really to the place I can take such trades on occasion. I guess only time will tell but I am looking to take my size up some becasue my average share size is still only about 400 shares. Also I had been trading the financials exclusively since July but that changed with the sort sell ban. I was able to adjust but I have been trading many other names since then. I am looking to get back to trading a select few names and continue to sharpen my skills for reading my stocks, sectors, etfs and the market. I will try and keep more updates comming for the people who still visit the site.

Last week was a stressful trading week for me. I have been trading the financials almost exclusively, which has been tough with the volatility and choppiness. I am still working on perfecting my trading skills along with my chosen style of trading. My losses are very small but I am not taking them very well. I am trying to tell myself to judge my progress on my trading and not on my P/L but its hard to get over the frustration of even small losses.

I am finding a lot of things that are holding me back and finding ways to improve on them. My main problem this week was that I was not able to find good trades. Last week I found lots of winners but did not maximize. This week I could not get a good trade to save my life. I did improve on some of the things I noted in last weeks recap but I can’t fix them all in one week, so I still have more work to do. I guess it was just a bad week and that is all there is too it. I will move past it and focus on the positives. There will always be times when the trading is not good and the key to getting through that is to realize it and not take huge losses. This week I lost just over 500.00 which is an acceptable loss for a bad week.

If I had not taken a few larger than average trades in an attempt to pull my self back to profitability it would have been a much smaller loss. That is an issue I am dealing with right now is taking on too much size when I am down in an attempt to get profitable. I can see it coming sometimes during the trading day but have not been able to totally stop doing it. I should only be lifting my size when I am trading well and the market is giving me good opportunities.

Another development, in the way of trading problems, is my constant following of what “the market is doing”. I watch YM during the day and try and use it to help me judge direction. I have realized that I am following it too closely. I am studying what the market is doing instead of studying what my chosen stocks are doing. I have replaced the chart of the YM with a small chart of the Diamonds and a chart of XLF. This should help me remove some of my focus on what the futures are doing.

This is the first recap I have done in a couple of weeks because the blog has been having some problems. We finally got the site switched over to new hosting provider and upgraded our version of Word Press which will now allow me to put images into my posts once again. After the last upgrade word press would not allow me to insert images into a post and that has been fixed with the new upgrade.

I have stopped doing daily recaps on the blog and started keeping a journal in Microsoft Word. I started doing it this way because it is much easier for me to put down my thoughts about a trading day when I know no one else will read it. It’s not that I don’t want to share my thoughts with other traders but the fact that it takes me twice as long to complete the task when I know it will be on the blog for anyone to read. Also, the quality of my journal has increased dramatically which should help me pinpoint mistakes and improve my trading, which is the purpose of keeping the journal. So for now there will only be weekly recaps about how I traded and things I want to improve on. Also I have started recording all my trades with Camtasia and review them every afternoon after the markets are closed. I am averaging about 2 hours of video a day. I usually spend at least 1.5 hours completing my journal and reviewing trades everyday. So I am spending an extra 3 to 4 hours a day, writing the journal, reviewing and editing charts and watching the video from my trades. This is a great help in revealing mistakes that I make and allows me spend many more hours watching and reviewing my trades. The video is especially helpful because I can get totally involved with watching the trades and even feel the worry or anticipation that I feel when I am actually in the trades. Its also helping me to pickup on things that I do when I start to get nervous about a trade. Knowing these things will help me to recognize them in the future so I can learn to take a few deep breaths and not let my emotions dictate how I trade.

On to the weekly recap of my trading. I ended the week profitable but only slightly. I missed my weekly goal of $1,000.00 in profits by about $800.00. That’s a big miss!!! The problem came from an old cliche about trading: Let your winners run. There were multiple instances of me being in a winning trade and exiting before there was any sign that the trade was slowing down. I’m not talking about instances where a trade will pause during the middle of a trend, trade sideways to slightly up and then resume in its current direction. No, I’m talking about taking a short trade and the stock does not print a single green bar but I am exiting anyway, only to see it move straight down another dollar. I even go back and watch the video and hear myself saying: ” I think I’m getting out now even though I believe it will keep going my way and has showed no signs of moving against me”. That’s messed up. So I know I have to figure out why I am doing this and either be able to fix it mentally or mechanically, i.e. trailing stops. Also i have found multiple instances of over trading during the middle part of the morning. I want to make money so I am attempting trades when the market has no real direction and just chops around. Got to fix that!! There were also two or three times when I would exit a trade before my stop was hit only to see the trade go my way very quickly. I would feel anxious about losing money on the trade, even though my stop loss was well within my average loss limit, and just bail so I would not have to feel the anxiety of having a possible loser. And then when the trade would start to go without me I would revenge trade and lose money. So instead of keeping the winner and making $400.00, I exit, jump in another stock and lose $160.00. Another problem to fix.

Now a few positives about my trading. I had a six day winning streak, I think its my longest winning streak, that ended on Thursday of this week. During those six winning days I made just over $2,000.00 in profits. I was able to identify and take lots of winning trades, even though I did not always maximize those winners. I kept all my losing trades under $200.00 and was able to fix a few problems I was having with putting on too much size. I am also paying more attention to the indicators I use, which is helping me time my trades much better. When my timing is good it allows me to enter trades at low risk points which keeps my losses much smaller.

To cap off the recap I will post a few charts of the winners I had that I exited way to early.

Well last week turned out to be a profitable week but was a huge letdown. It seemed that I was on the verge of having one of my best weeks in a long time, that was until Thursday came along. I was up over $500 on Monday, lost $126 on Tuesday, was up $444 on Wednesday and had booked over $500 in gains on Thursday and was holding a $350 dollar winner but still lost money on the day. The problem was that I had bought the DDM around 9:00 that morning with 300 shares fully expecting the market to rally back above the January lows. I began to get concerned about the trade when I went back and looked at the chart of the Dow and a chart of the VIX ( courtesy of Stewie). When Oil made new highs and the market continued to fall I began trying to trade my way out the position. This did not work and I ended up losing $740 on that trade alone. I had planned to hold on to the shares for a few days as I believed we were oversold and the market would bounce. New lesson: Never try catching a falling Knife and Screw trying to pick market bottoms and tops. Anyway, the other profitable trade I was holding in the SKF got wiped out when Oil spiked up 3 dollars and the market instantly fell to new lows. So instead of make 800+ on Thursday I ended up with a $330 dollar loss. The disappointment and anger bleed over into Friday and I ended up losing $400. So all told I made right at $100 for the week. This is proof that just one or two mistakes can really screwup your trading week.

I intended to have a post up on Friday about how the week went but I just did not get it done. Last week was a good week for me. I was able to pull in about $800 in gains for the week. I stopped doing daily recaps and I’m behind on updating TradeLog, which keeps up with all my transactions, so I am not exactly sure how much I made but $800 is close to the correct amount. I had a few really good trades and only made a few mistakes. One of the things that I did really well last week was to be very carefull not to over trade. The only day that I did over trade was Monday and it made me sick. I had found the MA trade over the weekend and made good money on it on Monday but gave most of it back with a lot of small losers. My win percentace was very low and I decided I would not let that happen again. So I was very careful throughout the rest of the week to not take just any trade that I thought might work. I got back to using limit entrys( with did keep out of some winners) but it is very much my stlyle of trading, and allowed me to be more selective with my trades. I only had one down day which was on thursday, and I was able to recognize very quickly that it was not a good day for trading and I shut down early for the day. My only problem is not holding on to winners long enough to get the maximum return on the trade. But that is a problem I will accept in the short term and will just contine to work on my confidence and trade setups.