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

[Mike B 624]

March 20, 2019 -  $GIS (Partial)

I had a huge blind spot trading mistake today. Instead of covering at my 1R, I actually ended up purchasing another 1/3 of my position. The biggest problem was that I originally thought I had covered half. I did not pick up  on it until I glanced over at my current position size and noticed I had more shares than when I started. I extremely happy with my reaction, as I re-evaluated where I was exited 1/3 to get me to a spot I was comfortable handling and then exited again when the stock broke the 9 MA for the second time on the 1 minute chart.

Sample Set Results

      P G S G S 6 7 8 S S P G G S G S S P 19 20

 

[Mike B 624]

March 21, 2019 -  $CAG (Stopped Out)

Some days you just pick the wrong stock out of the bunch to trade. All three stocks on my watch meet my trade criteria. 2 of the 3 worked, 1 did not. I would have gotten a partial out of $CAG had I not had another blind spot trading error again. I put my entry and stop loss line using the first candle on the 5 minute chart thinking it was the open and close of the 15 minute chart. This caused me to get a later entry with a lower risk to reward. When the stock did not move right away and broke below the 9 and 20 SMA I got out and said I would re-enter if the stock broke my entry point. It did but I did not get a fill due to not simultaneously press "Ctrl N" instead the "N" went into the symbol section of the Montage. After that I said I was not chasing it and cut my losses. Best part was emotional at all. Just moved on to look for another trade. Unfortunately, $MU and $FTDR already made their moves.

Sample Set Results

      P G S G S 6 7 8 S S P G G S G S S P S 20

[Brandon K 64]

Mike, you seem to have a lot of patience. I've been looking for ways to change my personality to add that in my trading. I'm rock solid on not trading the first 5-minutes and low floats, but struggling to resist on not trading at all. 

[Mike B 624]

2 hours ago, Brandon K said:

Mike, you seem to have a lot of patience. I've been looking for ways to change my personality to add that in my trading. I'm rock solid on not trading the first 5-minutes and low floats, but struggling to resist on not trading at all. 

Thanks Brandon, 

It has not come without a lot of frustration on the multiple days in a row of not getting a setup. I am almost through this sample set and then I get to introduce the 5 min Orb into my live trading. Baby steps

[Mike B 624]

March 22, 2019 -  $AMD (Hit Profit Target)

First sample set I completed today. Had a good trade on $AMD short. I thought I might be able to let the last little bit run longer but the stock bounced back, so I got out completely.

Sample Set Results

      P G S G S 6 7 8 S S P G G S G S S P S G 

[Mike B 624]

Quote

Summary of Results:

                Profit Target Hit: 6

                Partials: 3

                Stop Loss Hit: 8

                Trades outside the sample: 3

                No Trade Days (No Edge Present) : 11

                No Trade Days (Missed entry): 2

Improvement Areas Analysis (From 1st Post):

1)      Thinking in probabilities: I will have to say that I believe I am thinking more in probabilities than I was before I did this sample set. The realization came to me different than what I expected. About 1/3 of the way into the sample set, for 3 trades in a row I did everything I wanted prior to entering a trade. All the indicators and confirmations lined up perfectly, but I got stopped out twice, took a partial and it moved against me, and finally on the fourth trade I hit my profit target. This was the moment, I had the thought of, “I can do everything right and it still goes against me.”  This is when I started to finally realized all you can do is minimize your risk with good entries by looking for good setups.

2)      Discipline to not give into FOMO: Throughout the sample set, I only gave into FOMO three times. All of which came back to back. Since that streak, I had minimal urge to rush into a trade without seeing a good setup with a good risk to reward. Only thing I have started to do around the 10^th trade I took was to start incorporating the 5 min orb back into my trading plan. I have noticed over the past couple weeks, that I am rushing a little into the 5 min orb, so I am holding off a little longer before trading 5 min orbs live again.

3)      Profit Taking Plan (Holding winners longer): This is one area of the sample set, I feel I need to work on. I did not execute all my trades well within my profit taking plan. I am unsure if the profit taking plan is even executable as I believe I designed it using the wrong variables. i.e. it is configured around commissions. I am in the process of making adjustments to it and testing this out in the next sample set. I did end the sample set with just a little above 1:1 ratio.

Unexpected Areas of Performance:

(1)    I confirmed I am good at ensuring I utilize my planned stop loss. In the sample set I did not move it and I did not let the price action go past it (slippage on the fill did occur).

(2)    I realized that commissions did have an effect on how I was taking profits. There were a few trades throughout the sample set that I had indicators that the stock was not moving in my direction. I could have gotten of the trade with a smaller loss, but because I was worried about commissions, I was willing to hold onto the trade longer instead of exiting and re-entering if the stock moved back into my direction.

(3)    I found out that I have the discipline to stick to my trading plan, even if it means that I do not take a trade for the day. On multiple days, I saw great 5 min orbs, VWAP reversals, and Bearish Engulfing Cracks and did not take them due to my rules for the day. This is good, but it can also be a hindrance, if I do not have a well refined plan that is executable to make profits.

Overall, I was happy with this sample set and plan on doing another one starting this week. Over the next couple of days, I am going to set up my next sample set.

 

Edited March 25, 2019 by Mike B

[Mike B 624]

March 25th - I did not take a trade today, I did not see anything in the short 30 minutes I was available to trade. I was looking for $AMD or $MU to hold VWAP, but both loss it and sold off. 

I am in the middle of adjusting my risk per trade, trading plan strategies, and profit taking plan. Hopefully, I will get it completed shortly, so I can start trading my next sample set. 

Edited March 26, 2019 by Mike B

[Mark D. 435]

congrats on finishing your sample set! 

[Mike B 624]

March 26th - Did not take a live trade. The stocks on my watchlist today were a little choppy for the first 45 minutes. $MU and $AMD had great moves after that once they picked a direction. Hopefully, some of you were able to take advantage of it.

[Mike B 624]

March 27, 2019 -  $CVS (Partial)

As I prepare my next sample set, I have continued to trade my previous sample set. I missed a few great entries on 5 min ORBD this morning; however, I did take a trade on $CVS, with a decent entry.

 

[Mike B 624]

March 28, 2019 -  Nothing met my edge, but I did take a sim trade on $AMD working the engulfing strategy that I will be incorporating after this sample set.

[Mike B 624]

March 29, 2019 -  $BB & $AMD (Partial, Hit Profit Target)

I am still adjusting my next sample set (Profit taking Plan) a little before posting the parameters here; however, on Friday I set a goal to trade a 5 min Orb and 15 min Orb live if I could find 2 stocks that met my trade criteria. I wanted to see the emotions and nervousness that I would experience adding an additional strategy. It went well and I was happy with my execution. 

Sample Set Results

      P G 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

 

[Mike B 624]

April 1, 2019 -  $JD x 2 (Stopped Out, Partial)

I am amazed how much more comfortable I getting stopped out. Today, I got stopped out and started looking for another trade, saw another opportunity on $JD and got a partial out of it. I than went looking for 1 15 min Orb but did not see one that my edge. A month ago I would never of been able to do this while being in control of my emotions.  

Sample Set Results

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

[Mike B 624]

April 2, 2019 -  $JAMD (Sim)

I missed an entry on $AMD as I hesitate just a little bit because I did not want to trade before the 5 minute mark. I than looked for a 15 min Orb, but did not find anything. I decided to sim trade a VWAP reversal on $AMD. I got before my stop as it took to long to develop, but I was ready to get back in if it broke my entry point again, which it did. Made it all the way to VWAP and I wanted to see if it could run some more as their seemed to be a lot of buyers. I got out just above break-even when the stock engulfed the previous 5 minute candle.  If you look at the time frame later, it eventually did what I was looking for and made a huge move back to the high of the day.

Sample Set Results

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

[Mike B 624]

April 3, 2019

I am not sure what is worse, missing an entry on a great move or taking a great entry on a great move and than realizing you were in your simulator account. Today, I came face to face with the Emotional Hulk after making a blind trading error. I tried to take the Emotional Hulk head on and quickly realized it was a terrible idea, so I closed the computer, called it a day, and went on a run to get the frustration out. 

I realized I was in sim after my first out, and then closed the position. I tried to recover after switching to my live account but my emotions had the better me, so I did not take any other trade.