drjqool

I think having a profit target is important for a number of reasons. For myself these are: 1. As with all strategies, there must be an entry or exit criteria. You can adjust these up or down as you gain experience to better gauge how to best efficiently utilize entry/exit but once defined, these must be stuck to. It's just simple business principles and instills operational excellence. 2. A series of consecutive wins may instill subconscious overconfidence. This happens to me where I sometimes feel like I cannot make a mistake during that day...that is until I do. And then when that happens, I want to earn back what I lost because "it's mine." This type of thinking is what turns a profitable day into a loser. It happened to me before and sometimes still do but with experience, I catch myself earlier so when it happens now, I stop myself and walk away. 3. DECISION FATIGUE. I think this is probably the number one reason for myself. I feel like I am at my best in the early morning. Every decision can be made sharp and decisive. I am able to look at and process numerous variables. Over a dozen or more of these decisions under high stress conditions of trading, your brain fatigues. Then you start being lazier on a subconscious level. This is when you make critical mistakes. For example, a few days ago I took a reversal on a strong bullish stock and made a rookie mistake of not checking 5-minute for engulfing (what the heck was I thinking? on a strong bullish stock?). 4. Opportunities are limitless (in theory) but there is no need to take all of them. One should take the highest probability ones with greatest returns. If one keeps trading, the number of top AAA opportunities dwindle and trades that you enter begin to drop in grade, setting up for a bad trade.

Overall lesson for myself today is: 1) Use 5 minute for pattern and 1 minute for entry. Otherwise, if I use just one, I’d lose out on opportunities and expose myself to unnecessary risk. 2) Give a little more breathing room to stop losses as on several of the trades, once I exited near my stop loss, the stock moves in the anticipated direction. If I must adjust position size to allow for this, so be it. 3) Be more patient. Despite my earlier exits, there were still several opportunities to re-enter to continue the same play but I was already onto the next stock. I’m happy I respected my own rule of not adding to a position in first 15 minutes (with very minor exceptions), stop losses, and also for catching on that I started to over trade for the day and closed out my day. Again, good to be making money but I am my worst enemy and prevented myself for capitalizing on several of the opportunities presented to me. Something to work on for tomorrow. If Andrew, Brian, or anyone else trading live for awhile have any additional feedback or comments, would love to hear them. I also hope this helps others learn as well. ORB / False Breakout 1 – Straight forward ORB covering on way down and when there was sign of reversal to the long 2 – Broke through VWAP so shorted on the new 5 min, covered some on way down but it popped and was stopped out. It continued lower afterward but I waited for a better entry. 3 – As the stock grinded down, it popped allowing a quick short entry however as it grinded down, it popped again and I got chickened out and covered. Continued downwards afterwards. ORB (failed) This might be what Andrew calls a rookie mistake. I missed the 5 min ORB so I went for a 10 minute on this to the long side. However, the stock did not clear the 10 min ORB range. My thinking was that it retraced and that would be a good entry. In hindsight, that was true but it retraced all the way back to below VWAP before moving in the direction I intended. I got stopped out before that so no complaints there except a little patience on this one might have avoided the loss by letting it break the opening range first. VWAP Breakout / Reversal COLD FEET SYNDROME! 1 - Stock went above VWAP on new 5 minute high. Target for high of the day at that point with good stop loss below moving average but I stopped myself out too early. WHY? 2 – Large 5 minute candle stick so shorted just before a new five minute was formed. Covered some on the way down but as it showed signs of reversal, I exited all. Should have followed stock and when it shows the consolidation was over, I should have re-entered as the stock continued down in the trajectory below VWAP. Good that I respected my stop loss and did not give back profits. ABCD COLD FEET SYNDROME! Respected the moving average on 1 minute and used that as stop loss. Initial target was to exit on high of the day. I entered but stop out on pull back before stock continued to make close to a $2 move toward my target. The issue here is my entry on 1 minute could have been better. No real confirmation on 5 minute so why would I enter. A better one would be on the second 5 minute after it made high over the previous 5 minute, corresponding to the start of the second with a stop loss just below that. ABCD / Reversals and scalping (I noticed I was over trading so I closed my day after this while the going is still good) 1 – Should have used 5 min to confirm ABCD and also have a better entry. I entered a bit pre-mature and was susceptible to the price fluctuations which ultimately led to my exiting prematurely. Therefore unable to capture the moves that I anticipated. 2 through 7 – Tried a reversal but exit prior to stop loss for minimal gain. Saw it was about to possibly move up, flipped position to long and was stopped out. Convinced the stock was short and tried to short and saw there was considerable chop. After a few of those, I shorted at the resistance and covered on way down, each time setting a stop loss at just above the respective moving average. However, I fall into my bad habit of covering too soon as you can see I keep missing the big moves.

ORB Shorted after 5 min. Was watching a number of stocks but I did not like the spread on them. SBUX offered a much more manageable spread. This is a stock that didn’t hit the scanner but found it by reading news (the importance of looking at not just Trade Ideas but also relevant financial news for the day). Broke my rule for not adding to position in first 15 minutes for two reasons: 1) manageable spread which is .01 and hence can stop myself out without taking an unexpected loss and 2) on L2, this stock was very weak and so I considered the pullback at 1 minute a retracement from some covers before the shorts take over again and 3) my previous day exits were way too early for me to take profit even if my strategy was right, my execution was poor. Taking these three points into consideration, I took a sizeable position FTW. Usually, I’ll exit all or most of my position on first wave and re-enter on the continuation of the trend. In this case, I probably would not have given the long wicks displayed by SBUX on 5 minute and the small candlesticks on 1 minute. It does not give an indication of a sustained momentum one way or another as it can easily reverse or pop in my opinion. Hence, I decided not to play this stock any further. Top Reversal / (Failed) VWAP Breakout x2 / Scalp? 1 – Waited for confirmation as to whether this is a retracement or true reversal. L2 and 1 minute confirmed it and entered on the 20 moving average with a stop loss slightly above it. Dropped but chopped up and exited. 2/3 – Anticipated it will fall through VWAP, shorted with a stop loss above the same MA, but got stopped out. Did this again when I waited on 5 minute but was stopped out again. 4 – Noticed it kept popping just above the MA and then drop below the VWAP. Waited for it to pop above MA again, shorted and covered on way down toward VWAP for a quick return of some of the losses on this. I realized that while the big picture shows the stock MIGHT be moving toward lower lows and going to fall below VWAP, it was too choppy for me to capitalize. I decided not to play it as it was unmanageable for me at my skill level since there is also the possibility that this stock might not continue its downward trajectory and instead bounce back given it tested VWAP so many times but never truly broke down. Ultimately, the stock did continue to fall and ended up below 40.9. However, this wasn’t for me. (Failed) VWAP Breakout / (Failed) Reversal / Bear Flag 1 – Fell below VWAP, shorted, but stopped out slightly above VWAP 2 – The pair of red and white candle stick (x2) appeared like a double bottom, so took reversal, fell below VWAP and stopped out. 3 – Missed the 3rd (successful) VWAP breakout but waited for a bear flag. At this time the stock fell below the 200 SMA and I went it heavier for 2 reasons: 1) fell below 200 MA and 2) stock spread and range are fairly low. Covered on way down and when L2 showed signs of reversal, exited all.

Overall, I had a good day even though it could've been a better day. First is I did a good job of respecting my stop losses even though on multiple occasions, I've stopped out too early and missed the subsequent action (but I also avoided the action going against me!). This is one area I need to work on and I believe that has to do with 2 factors: 1) spread and 2) lot size. I think if I can manage these two better, I can wait out the chop for the play to take place. Several times, the "strategy" was spot on but execution kind of blew it. Oh well, there's always tomorrow. ;) ORB / (Mistaken) Reversal / Double-bottom 1 – Short on new five minute low and 1 minute low. Covered and then covered all (slight hotkey mistake and added) when it showed signs of reversing. If I were watching this stock instead of entering others, another good re-entry to capture more of this drop would be at 9:48 after the consolidation. Prior to that, I probably would have gotten nervous and exited on signs of pullback during the consolidation. The bars look misleading since the spread is quite big on this stock! 2 – On 1 minute, it was making new highs and when a new 5 minute high appeared, I thought shorts would have to cover given how much the stock dropped overnight and into the early open. This highlights both the danger and uncertainty of when it is a true reversal or rather it is just a retracement. In this case, it was the latter. I exited a bit earlier than I had hope because I didn’t like the choppiness during consolidation which I’ve said before in the first play that it can be scary since these are very big price moves with the spread. I exited at a slight profit prior to the pop and then drop (which confirmed this is just a retracement and not reversal). 3 – I continued to watch the stock until I saw BRIAN’S DOUBLE BOTTOM on 1 minute. I continued to watch for confirmation based on higher highs. When it dropped and almost tested the double bottom, I thought the double bottom would not hold but when it formed a wick instead and then formed a new 1 minute high, I entered long. It was still scary given the price action and spread. However, I got a good entry with a good stop loss (tail end of previous wick) and allowed this to play out. I started to take profit as it close toward the moving averages. By the time I was out, the stock made over a $1 move and later it continued on higher. VWAP Breakout Short below VWAP with stop loss slightly above. Covered on way down and used L2 to gauge exit. Able to avoid the retracement. Stock then chopped for awhile before continuing lower but not worth the wait. Top Reversal (cold feet) New 5 minute low, shorted. Very good entry actually with a good stop loss above the moving average. However, when the stock did not run and seemed to retrace, I got cold feet. Exited with a small profit but it continued to drop. Lesson here and for the day is sometimes I should let it hit my stop loss especially on ones with very manageable spreads and great liquidity. Another good idea, bad execution mistake. VWAP Breakout Dropped below VWAP, short on 1 minute retracement and new five minute low. However, I exited too early because the pullback hit my max loss on this play. Lesson here is to take smaller lot size to be able to set a more appropriate stop loss above the moving average because again, the idea is good but execution is key. To provide some perspective on this play, my entry was at 30.68 but when it pulled back, it went up to 30.95 including the spread. If you do the math, you can see that a .30 move like that is pretty scary especially since IQ today has a decent size spread.

I saw how well written Robert H's journal was and how he can really reflect back on it to tease out the highlights and key learning points so I've decided to emulate that with mine. Since it's a new month, I'll try to post for folks to opine, educate me on, and hopefully also show people what worked and didn't work for me so you can learn from my mistakes as well. 1 - ORB Did not scale in per personal rule of no scaling in on first 15 minutes (I realize it's difficult for me to manage the stop loss and risk reward once I do this given the volatility during this period and on days I lose money, it's because of my inability to manage this so I'm avoiding it for now). Took profit on the way down and scaled out completely on sign of weakness. Good because stocked did a very quick reversal. 2 – VWAP Reversal Higher highs on 1 minutes and thought it would go back toward VWAP. When on L2, there is signs of weakness, I scaled out quickly. 3 – Failed Bear Flag New 5 minute low and went short. Scaled in another 500 for total of 1k (since it’s past first 15 minutes) but stock failed to make lower low. I quickly covered all. 3 minutes later stock shot up and never dropped back to original short level. 1 – VWAP Breakout Good idea bad execution. Should have entered not on the tail end of the 5 minute as the new 5 minute high is already confirmation. Should have entered above VWAP (green) with a stop loss just below VWAP (red). With this better entry I would not have stopped out below the moving average. I could have scaled some out at that point and scale out more on the way up. On pull back and consolidation, I could have rode it or waited. Then repeat on the bull flag and enter once new five minute high is confirmed. POOR EXECUTION DOOMED A GOOD IDEA. 2 – Small Bull Flag Entered on new five minute high. Scaled out on top and on way down and exited before break even. 3/4 – Failed Bear Flag Saw a pretty big drop in the previous 1 minute candle. Came off a failed higher high with a new lower 5 minute. Took short position twice with stop loss above the higher MA. Stopped out twice which is a good thing since the stock popped. If I were watching this stock after the failed attempts, a good safe entry would be after the retracement of the pullback and the start of a new 5 minute candle as it was making a high above the 37.72 level support/resistance level. SCALPED Missed the break out and the bull flag. It popped above YY high which is a good support/resistance. Stop loss just below this and quickly scaled out before the halt. I accidentally made a hotkey mistake and added more instead of scaling out but fortunately that didn’t hurt me.

Thanks Andrew!

I saw Andrew's video in the advanced lesson on time of sales and such. For flag symbols, what do these mean? T F I I know he said a lot of odd lots get flagged with I and that F is like a market sweep or something. However, what exactly do they mean? Thanks in advance.

@adventuredogLA I'm down to meet up too. Pasadena area works for me too but can also do anywhere in the greater LA area provided it is not during rush hour (live in Santa Clarita so that'd be a heck of a drive in traffic)! ;)