Live Journal Exercise – Learning to Trade an Edge like a Casino

[vic 11]

Thank you for your posts over the last year and this evaluation. 

 

It is amazing how methodologically you work on this, I have not seen this very much over such a long period of time (13 months)

 

Reading that your plan is 5 years really is amazing, one comment is that you must not forget to include your `missed opportunity cost`. Imagine if you would have a side job you enjoy but get paid $20 per hour, how much money would you have missed by being active in this venture? Since you approach this as a business this must be included imho. 

 

Good luck and thanks again. 

[Mike B 624]

18 hours ago, vic said:

Imagine if you would have a side job you enjoy but get paid $20 per hour, how much money would you have missed by being active in this venture?

Excellent point, I think I will add this starting next yer.

[Mike B 624]

2 December 2019,

I was traveling today and only got my typical 3 hours of sleep along with the 3 hour drive, so I sat on my hands and just watched the stocks in the morning. In the afternoon, I came back and decided to trade sim as I was pretty tried and was having trouble staying awake while looking at the screens. I did eventually, see a decent setup on $QCOM, so I took it short. I stuck with my plan A for taking profits and got a 1R partial and a 2R all out. My plan B also ended up working out, which is a 1R partial, 2R parital, and a 3R/Profit all out. 

[Mike B 624]

December 3, 2019 -$JD

I had a major bias today to the short side. I think I finally got my platform back to working at the open. The few days I had some issues. 

I didn't take any Orbs as I just felt the market was chopping around. After the half hour mark, I saw $JD testing a price level just above VWAP with the moving averages on both the 1 minute and 2 minute charts looking to cross. I entered long on the break of the price level with moving average cross on the 1 minute. I had to force myself to go against my bias as I really was having trouble taking a long position. I took an early partial because I was so biased to the short side, and the market was choppy. Plus the partial came at a moving average on both the 2 and 5 minute charts. I set my range order for just under the HOD and got filled.

Overall good trade.

Sample Set Results,

G S S G 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

[Mike B 624]

December 4, 2019 -$AMD x 2

I had a tough day today. Overall it was a decent day just a tough day trading. 

Trade 1 - I had a great setup on $AMD. Moving averages crossing on 1 and 2 minute chart, a price level, all the moving averages on larger time frames below the entry, huge bids stacking up, and it was engulfing on the 5 and 15 minute charts. I got a good entry, set my partial at 1R where the stock hit but just didn't fill me, before the stock pulled back and stopped me out to the cent, before making the move all the way to my profit target. I vented my emotions with a few choice words, before getting a cup of coffee and sitting back down to finish the morning.

Trade 2 - This was in the afternoon and again it had a great setup, Moving averages crossing on the 1 and 2 minute, huge bids stacking up, rejecting VWAP, and forming a price level. I took the trade set my 1R partial. The stock moved sharply up but stalled and did a strong pullback coming within a cent of stopping me out, before heading up to my partial. This is where I made some mistakes and strayed from my plan. I canceled my partial order as I wanted to clear it with the hotkey in case it hit my level and didn't fill me. It hit my level I pressed my hotkey and for some reason I thought that my hotkey was set to my old %, so I covered again. Well it wasn't so I took to many shares out which threw my profit taking ratios all off. I did some recalculations and set a range order; unfortunately, it was after the stock had hit the price. I left it because there were still huge bids stacking up that should carried the price back to my profit target. It did, but not before stopping me out at my breakeven.

Sample Set Results,

G S S G S G 7 8 9 10 11 12 13 14 15 16 17 18 19 20

 

Edited December 4, 2019 by Mike B

[Mike B 624]

December 6 - No trade due to traveling

December 7 - No edge present

December 9 - Sim due to traveling as it had been a couple of days, so I felt the urge to push the buttons.

I had about 3 hours of sleep, so my analytics tell me not to trade. I decided to trade sim, so I sat back and waited for $CGC to make a pullback to VWAP. I got the entry on a 15 min Orb when the stock rejected VWAP with the moving averages in a favorable area. Not much else to say other than it felt good to trade after a few days of just not being able to trade in a routine. Looking forwarded to having a solid week of my normal routine without anything crazy happening. 

Sample Set Results,

G S S G S G 7 8 9 10 11 12 13 14 15 16 17 18 19 20

[Mike B 624]

December 10 - Bad day of trading mentally

I was off today mentally.  It seemed that I was always chasing the indicators. Meaning that the stock would move and then I would see the indicator instead of the other way around. I ended up not taking any trades today, but had 3 good setups. Again, I was just not in tune with the market and the moves were happening before I could process the information. 

I really sat back this evening and took a hard look at what I was doing, because normally after 3 days of not trading I am eager to get into a trade and usually get in too soon. What I determined was I was not mindful of what was occurring in the markets and around me. Yes I went through my normal routine, was ready to trade, but it was just that a routine. A check in the box of sort. I never really committed to getting my mind ready for trading. Normally, I am able to put all the extra stuff to the side for the 3 hours at the open and again in the afternoon. Today, on the other hand I let all the other things interfere with my ability too focus my mind on trading the markets. 

I.e. I dealt with an online order issue during the pre-market, left my trading station 15 minutes into the market to answer a knock at the door (I normally ignore the knocks during the first hour of trading), I answered several phone calls during the afternoon session, and I tried to trade after oral surgery. 

In the end, I mentally was just not there today even though I wanted to be.  Goes to show you that when you are not mindful of what is going on, you can miss opportunities that are staring you right in the face. 

The image below was of $MU as I was watching it going into the close, but failed to recognize my setup. This was an A+ setup for me.

Sample Set Results,

G S S G S G 7 8 9 10 11 12 13 14 15 16 17 18 19 20

[Mike B 624]

December 11 - $PCG, $AEO, $HD

Today was a good day of trading, but a reminder of how not being able to fully dedicate yourself can affect your outcomes. I took three trades today, to include my first stock priced over $200. I know most of you trade those all the time but for me, it was an achievement psychologically. 

Trade 1 - $PCG, I took it short after the sharp pop at the open. It had a lot of bids to the short side and had the moving averages crossing right at a price level. After entering I quickly got stopped out. Best part of this trade was how I handled it mentally. It was a simple oh well on to the next.

Trade 2 - $AEO Another good setup, but just died right after my entry at the $14 mark. It was having some issues breaking this point. My only frustration came in that I had to go to an appointment, so I had to alter my trade management plan and go to a all or nothing range order. By doing this I lowered the success rate by 22%. And of course the stock came down to my 1R partial level and than bounced back to my stop loss. Because I couldn't be at the trading station, I was unable to take the small partial and instead ended with a 1R loss. 

Trade 3 - $HD, I had a my setup the only issue I had was that it was after the FED announcement but before the chairman began speaking. I decided to take it anyways as it was my setup and my goal for the day was to take all the setups I saw that met my trading criteria. I got a partial before it came back to the break-even point. I took a partial a little early because the Chairman began speaking and the stock just started to stall so I wanted to lock in some profit before. It just did quite run all the way to my profit target.

Overall a good day trading psychologically, just the market decided that it did not want to pay me today.

Sample Set Results,

G S S G S G S [P(S)] P 10 11 12 13 14 15 16 17 18 19 20

.

 

[Glenn Budde 356]

19 hours ago, Mike B said:

Today was a good day of trading, but a reminder of how not being able to fully dedicate yourself can affect your outcomes. I took three trades today, to include my first stock priced over $200. I know most of you trade those all the time but for me, it was an achievement psychologically. 

Yea... I dont usually like to trade stocks over 100 bucks.....

[Mike B 624]

December 12 - $SBUX

I wanted to do today was repeat my performance yesterday. Execute the exact same way. Well that didn't happen because I get interrupted at the open and spend 30 minutes dealing work issues. Then I come back for the afternoon and get interrupted at least 3 times with more work issues. I finally get a trade and stop out. Probably because I was not focused on trading and had several other things going on. I really forced this trade, but looking back I should not have been in it. Rough first half of this sample set. lots of red. 

Sample Set Results,

G S S G S G S [P(S)] P S 11 12 13 14 15 16 17 18 19 20

[Mike B 624]

December 13 - $AMD

What a crazy morning with all of the trade news. I had a great setup on AMD to the short side, but was real cautious due to the pending trade news. I held through the pullback and I was ready to hold it when it started to move in my direction again; however, as it was reaching the top  of the hour the momentum died off, so I exited as I did not want to get caught in a squeeze. Eventually after the news release and the market calmed down I got the move I was looking for.

My second trade was on AMD to the long side, as it was testing a price level and the news was about to come out. I entered right before the news broke. Unfortunately, because I was on WIFI and the volume in the market was extreme, my platform began to lag. The charts were not useful to me, so I had to go off of the Level data that was coming in without any disturbance. I meant to take a partial at the initial pop, but instead added to my position throwing off my ratios. Once I realized it, I quickly covered readjusted and entered a range order for the last little bit and got filled right away because my platform was lagging. Overall I was happy with the trade and how I managed the mistakes. Looking forward to next week.

Sample Set Results,

G S S G S G S [P(S)] P S P G 13 14 15 16 17 18 19 20

 

 

[Mike B 624]

December 16 - Ran into ping issues today, which was really award as I was on my home computer with a hard line. Received a tip in class 1 tonight about checking the firmware as I have an older router. Thanks Carlos

Sample Set Results,

G S S G S G S [P(S)] P S P G 13 14 15 16 17 18 19 20

[Mike B 624]

December 17 - $AMD, $SQ

Got the email on the meetup, sounds good. If you stay through Saturday let me know, I am sure I can find something interesting to do. Old Town, La Jolla, even a feisty hockey game will be going that night.

Well not sure what kind of day it was, I just can’t quite put my finger on it. I had a good morning, stuck to my trade plan did not get any entries so I didn’t trade. Came back in the afternoon, and ended up taking two trades. One on $AMD and one on $SQ.  They both turned out the same way for me except I think I managed the $SQ trade a little better. I got stopped out on $AMD at my stop loss, but I knew long before my stop that the trade was not working. I stuck with my trade plan so I let it go all the way to my stop. I than took a trade on $SQ and the exact same thing happened to me. I was really confident with the $SQ trade, moving averages crossing, price level breaking down, and a ton of white space to the short side, but the market just didn’t want to pay me today. I managed this better as once I determined the trade was not working I decided to just exit instead of letting it run all the way to my stop loss. After exiting it took about another minute than it hit my stop loss.

Today I decided to add a portion in my notes to type in how I am feeling before entering a trade, during the trade, and after the trade.

 

Sample Set Results,

G S S G S G S [P(S)] P S P G S S 15 16 17 18 19 20

 

[Mike B 624]

December 18 - $AMD

Today my focus was on trading the same way I traded yesterday, as I traded well but the outcome just did not go my way. I could only trade the morning as I had marathon meetings at work, so I was very aware of my urge to force a trade. I was able to hold off on my orbs as the setups were not there. 

I than had $AMD setup the same way it did yesterday with the same setup, so my mind was telling me not to take the trade as the result yesterday was negative. I recognized this and made the conscious decision to take the trade on the break of the price level and see how it worked out. It made a move and gave me a 1R partial than moved back to my break even point. The art of probabilities at work. Same setup, different day, different result. Great trade to re-enforce the reality of probabilities.

Looking forward to tomorrow.

Sample Set Results,

G S S G S G S [P(S)] P S P G S S P 16 17 18 19 20

[Mike B 624]

Well the past week has been a fun and interesting one. Thursday I end up not taking a trade in the morning, but was looking forward to trading in the afternoon. Then came the train ride home on Thursday as I was flying to Phoenix on Friday to visit a Marine. Train late of course so I didn’t get home till around midnight, so Friday turned into a no trade day from the beginning. I got home yesterday from Phoenix and had to do some construction work on my new monitor stand as it was tilting over. I figured it was a good time to re-run all the wire to make everything look a little neater. Which brings me today. I started this morning and everything was working good except my keyboard and mouse that I had connected to a switch. The keyboard kept cutting out making it nearly impossible to type or use the mouse. I spent most of the morning trouble shooting it and found that it is probably the switch. We will see tomorrow.

$AMD had a great 15 min Orb this morning, I wish I was able to take it. The afternoon was better spent with the family than staring at the excessive amount of chop. Pop there the stock goes, oh wait pullback, see there the pop again, nope pullback again, and repeat for 3 hours. Lol.