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

[Mike B 624]

June 14, 2019 - $AMD (Goal, Stop)

Did not get much sleep last night, so I decided to be a little cautious today with my trading and only trade if I got a good setup. $MU did provide a good risk to reward on a 15 ORBO, but the choppiness at the open turned me off so I stayed away. I instead focused on $AMD, I was looking for an entry on a 5 minute orb, but if failed hold the VWAP and broke down. I figured I would get another opportunity for a 15 minute ORBD, if it pulled back to VWAP. I  got an opportunity around 0650 and took an entry after it rejected the 20 EMA and broke below the 9 EMA. After my entry it pulled back again and started to chop around, so I got out around my entry because the 5 and 15 minute charts were both indicating that it was reversing direction and it was not selling off as quickly as I wanted. I still had the intention that if it rejected the 20 EMA again and lost the 9 EMA, I would enter again. shortly after it did and re-entered took some partials and I eventually got all out as I had to go work. Poor planning on my part as I should have entered a range order for my last little bit instead of just taking it all out. The stock eventually went to my profit target.

Sample Set Results,

P P P S P S P P P P S G 13 14 15 16 17 18 19 20

[Mike B 624]

Week of June 17 - 21, 2019 - $AMD x 3 (Partial, Early Stop, Partial)

This was an extremely busy week at work for me, which prevented me from trading Monday through Wednesday. Then when I got back into trading, work took over in the after and prevented me from really being able to focus on trading and journaling. I made the decision on Thursday that I would just post a weekly recap this week until I got back into my normal routine.

The only day I took trades was Thursday, and I my analysis at the end of the day was simple. I was trying to force my indicators and confirmations to appear so that I took a trade after being out Monday through Wednesday. As you can guess this did not work out well, but I was happy that I was able to manage my losses. Friday was a much better day, although I did not take a trade. Nothing appeared that meet my trading plan, so I called it a day and headed home for the weekend to reset and get ready for Monday. 

I am definitely ready to get back to my normal weekly routine on Monday.

Sample Set Results,

P P P S P S P P P P S G P S P 16 17 18 19 20

 

 

[Rob C 826]

Hi Mike, good to see you back.

[Mike B 624]

49 minutes ago, Rob C said:

Hi Mike, good to see you back.

Thanks, it was a rough week. I am going to have another one in the middle of July where I won't be able to trade for the week.

[Mike B 624]

June 24, 2019 - $CCL (Partial)

I waited and as expected the market was choppy at the open. I was looking at $AMD, but the stock was way too choppy right at the open for me to take an entry on an ok setup. $CZR did not have moving averages in a favorable position for me. I saw $CCL pullback towards the VWAP and noticed it met my trade criteria, so when it broke above the moving averages and made a new 1 minute high I entered.

I took my first cover at  the break of the high of the day. I figured it would either continue to my profit target from here, or it would fail and go below VWAP.  I exited when the stock failed to continue higher and hit my break even  point.

Sample Set Results,

P P P S P S P P P P S G P S P P 17 18 19 20



[Mike B 624]

June 25, 2019 - $AMD (Partial)

 I was unbiased in the my indicators and entry into $AMD, but I let my thoughts about the market influence my confidence in the trade rather than letting the trade workout. Once I entered $AMD I really could tell I was thinking it was going to reverse because I had a choppiness bias towards the market.

Looking back on it, it looks like exited early; however, I stuck with my revised profit taking plan and executed it well even with the bias I had.

My first out was within my adjusted profit taking plan to help reduce early outs and holding on to my winners. The stock hit my break-even after I took a partial at a technical level

Sample Set Results,

P P P S P S P P P P S G P S P P P 18 19 20

[mahamuni 5]

Love your trade analysis.  

Thank you for sharing it.

[Mike B 624]

June 26, 2019 - $AMD x 3(Goal, Stopped x 3)

What a tough pile to swallow today for me. I went out and had a great 5 minute ORBO on $AMD. Got a couple of partials right in line with my plan; Resistance level, and high of day. Then I took 3 more trades on $AMD, all of the entries were way outside of how I trade. Only reason I didn’t go red today, was because my risk controls saved me on the fourth trade and only allowed me to take 2 shares, otherwise, I would have gone red for the day.

Why this happen, “GREED” I broke my cardinal rule of “Once I Iook at my P/L, I am done trading for the day.” For some reason after the first $AMD trade, I looked at my P/L and because it wasn’t quite where I wanted it to be, I decided to keep trading. I took an entry on the break of VWAP with some high asks and thought it is going back to 30.37. For 3 straight minutes, I repeated the same bad behavior. Here it goes, enter. Nope, lost VWAP, Exit. Repeat until max shares in a day is triggered and I can’t trade anymore and bam $AMD hits 30.37.

The gut wrenching feeling at first was that I lost everything I earned, but while journaling it got worse, because I knew I should never of been in any of the last three trades because my entry did not appear. I have no one to blame but myself and allowing “GREED” to take control of my emotions.

Tomorrow will be a better day.

Sample Set Results,

P P P S P S P P P P S G P S P P P G 19 20

[Garry 5]

20 minutes ago, Mike B said:

June 26, 2019 - $AMD x 3(Goal, Stopped x 3)

What a tough pile to swallow today for me. I went out and had a great 5 minute ORBO on $AMD. Got a couple of partials right in line with my plan; Resistance level, and high of day. Then I took 3 more trades on $AMD, all of the entries were way outside of how I trade. Only reason I didn’t go red today, was because my risk controls saved me on the fourth trade and only allowed me to take 2 shares, otherwise, I would have gone red for the day.

Why this happen, “GREED” I broke my cardinal rule of “Once I Iook at my P/L, I am done trading for the day.” For some reason after the first $AMD trade, I looked at my P/L and because it wasn’t quite where I wanted it to be, I decided to keep trading. I took an entry on the break of VWAP with some high asks and thought it is going back to 30.37. For 3 straight minutes, I repeated the same bad behavior. Here it goes, enter. Nope, lost VWAP, Exit. Repeat until max shares in a day is triggered and I can’t trade anymore and bam $AMD hits 30.37.

The gut wrenching feeling at first was that I lost everything I earned, but while journaling it got worse, because I knew I should never of been in any of the last three trades because my entry did not appear. I have no one to blame but myself and allowing “GREED” to take control of my emotions.

Tomorrow will be a better day.

Sample Set Results,

P P P S P S P P P P S G P S P P P G 19 20

The one thing I have learned about trading is you are never alone with this stuff. Yesterday I was following my plan, tried to get a fill short on ABBV I think it was, and didn't get filled cause of the SSR and missed an awesome move. It completely derailed my process and trading edge and I started chasing MU, AMD, etc. I thought I was becoming immune to that kind of reaction (the CHIMP!) but it happened practically subconsciously. Finally 4R later I realized the damage I was doing and shut it down. Re-grouped and had a great day today... Thanks for sharing...

[mahamuni 5]

Hi Mike,

Can you please tell me what did you use to create the template in?  Was it OneNote?  Excel?

Secondly can you share that with me please

 

Thanks

Munish

Edited June 27, 2019 by mahamuni

[Mike B 624]

June 27, 2019 - Nothing

I came back after yesterday and trade well. Unfortunately, my entry criteria did not appear, so I did not get an opportunity to take a trade. I was looking at $CAG and $AMD. $AMD pull backed towards VWAP and shot off to the moon, while $CAG bounced around the VWAP and did not setup like I wanted. My goal for today was to forget about yesterday and only trade a solid setup. In the end I met my goal, even though I did not get to take a live trade.

Sample Set Results,

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

[Mike B 624]

On 6/26/2019 at 5:58 PM, mahamuni said:

Hi Mike,

Can you please tell me what did you use to create the template in?  Was it OneNote?  Excel?

Secondly can you share that with me please

 

Thanks

Munish

The template for the trades is in OneNote. I sent it to your email.

If anyone else is interested, message me and I will forward it to you as well.

[Mike B 624]

June 28, 2019 - $AMD (Partial)

I got a quick little partial on $AMD and than it pulled back towards VWAP. My partial was right in line with my adjusted profit taking plan. I should have re-entered after the pullback happened, but I was distracted with a work issue. Oh well, overall I was happy with this month's trading.

Sample Set Results,

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[Mike B 624]

Sample Set 3&4 Review

I didn’t do a review of sample set 3 because I did not change much for sample set 4. Over the last two sample sets I have been focusing primarily on defining what to look for in an entry. What I have found is that if the stock pulls back towards VWAP and rejects VWAP with the moving averages in a favorable position, a good entry point is the break of the moving averages along with a break of the previous 1-minute candle.

This entry usually results in one of three things happening. 1) The stock will quickly pop opposite of VWAP and continue to run higher/lower. 2) The stock will quickly pop opposite of VWAP and bounce allowing an opportunity to take a quick partial before it pulls back and goes against me. 3) The stock will not break down immediately and will chop around VWAP before picking a direction.

What this has allowed me to do, is make my losers significantly smaller than my winners as I get out of the trade if the stock does not go in my direction shortly after the entry. Of course, with any new strategy, this has not come without some issues. I have noticed that I have taken a few really early partials which have cut into my profits as I get stopped out at breakeven during a normal pull back, which is followed by the stock going in my direction. This is going to be my primary area of focus in my next sample set. Defining clear rules for taking a first partial.

Overall, I am very confident in this entry setup, as I am getting good entries close to VWAP. I have been able to control my FOMO with the 5-minute Orbs, but this sample set I have had a harder time transitioning from looking for a 5-minute Orb entry to the 15-minute Orb setup.

Looking forward to the month of July.

[Mike B 624]

Sample Set 5 Criteria

Hey Everyone,

Skipped posting my fourth sample set criteria, because I basically kept it the same as the third. Only real adjustment was the simulator trades I was looking to take. For this sample set I have adjusted the confirmations a little bit, but I really like the entries I have taken over the last month. This sample set I want to focus on my profit taking, while keeping my entry execution in the same spot.

Four areas I want to work on during this sample are:

(1)       Hold through the initial pullback if the stock does not drop right away

     (2)    Hold off on taking my first partial to at least a moving average on the 5 minute or the low of the day

     (3)   Learn it is ok to be wrong and lose. Confront the emotion of losing and being wrong each time you begin to think about getting out early

     (4)     Keeping FOMO in check, especially with the 5 min Orb strategy

My desired outcomes I am looking for at the end of the sample set are:

     (1)    Focusing on the execution of each step in my trading plan. (Indicators, confirmations, risk analysis/management, entry, and profit taking)

     (2)    I want to be comfortable being wrong.

     (3)    Maintaining discipline and not give into FOMO with the 5 min Orb, so I do not get over excited and enter a trade too early

All of my indicators, confirmations, and risk analysis that defines my edge is based on information obtained in Andrew’s book and the lifetime Webinars.

Edge Defined

Trading Plan: 5 & 15 Min ORB – I am still only trading 5 & 15 Min Orbs. I have found over the past 3 months that both strategies produce about the same results.

     5 Minute ORB Pullback

          Met Parameters - 98 of 383

          Total trades within parameters that have worked - 74 of 98 (75.51%)

     15 Minute ORB Pullback

          Met Parameters – 107 of 384

          Total trades within parameters that have worked - 84 of 107 (78.50%)

Stocks for Watchlist: I select up to three stocks to watch based on the following criteria: (No Changes from previous sample set)

     % Change – Gapped at least 2% but not more than 10%

     Catalyst – Needs to have fundamental news of sort.

     Vol – >100,000

     Float – High or Medium float (> 50 m)

     ATR - .50 to 2.00

     Trading – Must be trading higher than normal volume

     Exchange – I prefer Nasdaq over NYSE

Edge Criteria 5/15 Min Strategy: I have three parts to my trade plan: risk analysis, indicators, and confirmations

                Risk Analysis: 1:2 or Greater

                Indicators: Must meet 3 of 5

                                Trades within the ATR

                                Small share size with high volume

                                ORBO closes above VWAP/ORBD closes below VWAP

                                No large wicks (wick cannot be larger than body)

                             Close Should be close to the VWAP

                Confirmations: Must meet 2 of 2

                                Pullback towards VWAP in a “ꓥ” (long) or “V”(short) Direction

                                Rejection of VWAP with Moving Averages in a favorable position

Profit Taking Plan: This has been a work in progress. Whether it is holding on to long before taking profits than getting stopped out, to the other spectrum of taking profits too early and getting stopped out at breakeven, then the move happening in my direction. This sample set I am defining some clear levels before taking my first profits.

                Plan A – 1/3 out at low of the day, moving average (5,15 charts), or 1R, then all out at profit target

                Plan B – 1/3 out at low of the day, moving average (5,15 charts), or 1R, 75% at momentum failure, all out at the profit target or first out.

Share Size: I am taking share size based on a fixed dollar amount. Thanks to KyleK29 & fjmocke for the hotkey setup.

Daily Trading Goal: My daily trading goal is to trade only within my edge, stick to my profit taking plan, control my emotions, and be disciplined. If I meet these then it is a green day regardless of what my P/L says.