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

[Mike B 623]

As I am working my profit taking methodology, I decided to log all of my trades for 2019 and see where they ended up on a scatter plot. I take my share size based on $ risk per trade, so the R variable is the same throughout. The first 9 trades are the outliers as they were fixed share sizes, but I think it is still valuable to include.

The goal now is to keep the losers in close proximity to where they are now, but increase the distance from 0 for my winners. I.e. get the winners to be closer to the 2R line instead of consolidated between 0 and 1R. I think I have come up with a method, but we will see at the completion of the month. 

Due to work I am only going to be able to trade tomorrow and possibly on Friday if all goes well. I will be back the following week though. Safe trading to everyone.

[IamKarthi 342]

On 7/12/2019 at 5:37 AM, Mike B said:

July 11, 2019

I am emotionally drain after today. The last time I felt this helpless an unable to control something was in a very different kind of environment. I am so glad I was able to breath and start problem solving my way through it. Well I hope you enjoy the read.

1. I tried to take a long on $AMD around 9:41 mark. My plan was a little different today with $AMD as I figured it would sell off at the open pullback to VWAP and if it broke above would test it again and then try to test the 52 week high if it could break through 34.
2. I got a send reject order similar to yesterday. No big deal figured my hotkeys didn’t save, so I went into the setup saw I was correct and changed my entry hotkeys like I did yesterday.
3. At 9:45 candle I entered just below the 34. Extended from where I wanted to enter but I was willing to risk the money just to make sure my hotkeys worked in my live account.
4. When it could not break the 34 level and drop below the 50 SMA I hit my hotkey to sell all and that is when all heck broke loose.
5. My cover button that worked in sim yesterday did not work in the live account.
6. I hit my panic button, rejected
7. I opened my trade section in the montage and hit the sell button, rejected
8. At this point the stock is dropping, I have no idea how to get out of the position and I felt absolutely helpless. Stock was past my stop loss, I could not get out and the only feeling of comfort was that I had the risk  controls that would limit my loss on the day, which would have been triggered if I didn’t figure it out.
9. At this point, I just took a breath and went into problem solving mode. I knew I had a problem and the only thing I could do is take it one step at a time. I identified that the issue yesterday was the “DAY+” had to be changed to “DAY”. I than realized that on the montage it had “DAY+” instead of “DAY”, so I changed the montage and hit the sell button. Finally, order filled below stop loss but still manageable.
10. Problem was that I did not change the order template to “DAY” so all of my hotkeys that process through the montage were being rejected.

 

Well at least I learned that lesson today. A tough lesson but still valuable.

Was the Panic key Shift+Esc? It's scary if the Panic key didn't work, that's what I rely on in case if something goes awefully wrong. I thought PANIC key closes all the positions irrespective of the Montage or DAS settings. Looks like that's not the case. It's great that you were calm enough to figure out the issue and sort it out.

Also, I have Day+ on my Montage all the time and it works. 

[Mike B 623]

2 hours ago, IamKarthi said:

Was the Panic key Shift+Esc?

Yes, I tried Shift+Esc and Esc. I think it had to do with the update CMEG had to their trading platform. I keep "Day" in my montage only now. 

[Mike B 623]

July 15, 2019 - $AMD (Stopped Out)

$AMD today just wanted to play with me. I got a good entry, held through a couple of pullbacks and then it finally lost VWAP, moving averages, and a support level so I got out a few cents above my planned stop loss. I would have gotten stopped out regardless. Then of course it took off to the 52 week high and never looked back. I was pretty frustrated after the trade. I think it was the accumulation of last week and knowing that I won’t be able to trade the rest of the week. I really just wanted a good trade to work out today.

I got half of that. I took a good trade, executed it well, and managed the profit taking appropriately. Only part I did not like was the outcome, I think if it had continue downward instead of popping back up I would have not been as frustrated. Anyways after that trade, I looked at the P/L so I was done for the day trading live. I decided to trade sim. Did not go well in the morning, but after a run and a couple of stabs at a moving average cross over I got one to work for me. Still a lot of work to do on this strategy before I can trade it live though.

A good productive day on advancing my psychology and dealing with a losing trade when I truly wanted a winner.

Sample Set Results,

P E E E P E P P S S 11 12 13 14 15 16 17 18 19 20

[Mark D. 435]

2 hours ago, Mike B said:

Then of course it took off to the 52 week high and never looked back.

i know that feeling. 

[Mike B 623]

July 16

No trading today due to work. I was able to come back in the afternoon and work on my afternoon Moving Average X-cross strategy. I am working on being able to scan stocks and pick out the ones that have a setup developing. I am still in the process of determining what I want to appear before entering. The last couple of days have been real productive with this. 

Same routine tomorrow.  

[Mike B 623]

July 17, Sim on $BAC

Overview SIM, I am working on trying to identify criteria when taking a moving average X-over trade. The purpose of my afternoon trading today was to work on finding stocks that had a setup along with taking an entry with a good risk. The profit target did not matter to me as I was working entries with this strategy only. 

Why did I enter: So here is the thing. I see certain chart patterns with the moving averages about to cross and more times than not I am right in that the stock moves in the direction I was thinking. 

So I literally opened my platform, looked at $BAC and saw what appeared to me as a good entry. The problem is I do not know exactly why it appeared to be a good entry. When I trade Orbs, I have a predetermined criteria to enter, for this type of trade I have nothing other than a gut feeling. The one thing that did stick out to me was the stock rejected 29.62 4 times on the 15 and 3 times on the 30 minute charts.

I was wondering what do you all see that makes this a trade that worked out? Or was this just a random occurrence just getting lucky?

Thanks

[Mark D. 435]

16 hours ago, Mike B said:

I was wondering what do you all see that makes this a trade that worked out? Or was this just a random occurrence just getting lucky?

double top on the 5min rejecting the $29.62 level (high of pre-market?)  plus that indecision candle on the 5min with a break lower. then it starts making lower lows, lower highs on the 15. just my 2 cents. 

[Mike B 623]

6 hours ago, Mark D. said:

double top on the 5min rejecting the $29.62 level (high of pre-market?)  plus that indecision candle on the 5min with a break lower. then it starts making lower lows, lower highs on the 15. just my 2 cents

I agree, I am not sure what the 29.62 level was but it definitely was a resistance level yesterday. The line I marked is my stop, I have to have a visual stop as it triggers my mind to exit the trade. I caught another one of these today with $QCOM, Double top and broke a support level with moving averages slopping to cross over on the 1 and 2 minute charts.

[Mike B 623]

July 18, Sim on $QCOM

Day 3 of no trading at the open. Tomorrow I might be able to trade, not sure yet though. I came back in the afternoon again to work some more on my entry for a moving average cross over. Just like yesterday, after opening the platform I saw a good setup according to my gut at 1405 on $MSFT and $AMD. This time I didn't trade, as I had somewhat of a trade plan that I wanted to test out and see if it would work. Both trades did move the way I was anticipating. 

About 1/2 an hour later I saw the setup on $QCOM and decided to take the trade as it broke the support level with the moving averages sloping to crossover the 50. On the five minute made a new low right at the support level. Also made a new 15 minute low along with rejecting VWAP 3 times.

Overall, I think I now have a set of criteria that I can start testing in sim to see the accuracy and profitability of the trade. A big step that I been trying to accomplish for the last month or so.

Safe trading tomorrow for everyone.

[Mike B 623]

July 22, 2019 - $MU (Stopped Out)

I know you should go all the way through a sample set before changing it up, but in the middle of this set I needed to make a change in how I was trading after entering a trade. The major change was how I was taking profits and exiting the trade. During the first part of this sample set I have been exiting way to quickly causing me to miss the moves. 

For the reminder the sample set I have hard rules for exiting a trade. This may cause me to stop out more, but I want to see the effects on the bottom line.

Sample Set Results,

S 12 13 14 15 16 17 18 19 20

[Mike B 623]

July 22, 2019 - Did not Trade

I had some issues last night as I forgot to bring my chargers for my laptop and USB adapter for the screens.I spent a good hour trying to figure a solution out for the morning trading session. This resulted in getting about 4 hours of sleep. Therefore, I decided to have a real tight trading plan for the day. I was only going to trade A+ setups and made the decision I would not vary away from this as my performance on days with little sleep do not turn out well.

I stuck with the trading plan and did not make any changes, although $KO was a great trade, it just did not meet my entry or risk:reward plan. Oh well, tomorrow is another a day. 

I have decided that the month of July has been a real test to my commitment. If something could go wrong, it has. Rear-ended at a stop light, forgetting chargers, not being able to exit a trade, not being able to enter a trade, trip to the ER, and another surgery next week. Couple this with working a profit taking plan. It been challenge after challenge this month. Can't wait till August. lol. 

Sample Set Results,

S 12 13 14 15 16 17 18 19 20

[Mike B 623]

July 24, 2019 - Did not Trade

Well on my original watch list today I had $SNAP and $AMRN. Everything else was outside my normal pre-market screening because of price or ATR. I marked up $AMD as a standby, since I did not have shorts on $SNAP or $AMRN. $SNAP bought off quickly and never looked back. It never gave me an opportunity to enter and $AMRN sold off, so I had to resort to trusty old $AMD that got band from Andrew's list. lol. I knew it was not in play today, but I had a feeling that it might breakout from the range on the daily and head to either $34 or $34.21. For now the $34 level seems to be a strong level. 

I got a decent setup for a 5 minute ORBD, but just like the past three days it broke VWAP, test it a couple times and bought off. At this point I knew it was going to 34, so I simply walked away from the platform as I needed to reset after seeing the same pattern three days in a row and not taking it. $MU stop out, $KO went to moon, $AMD went right to my planned target. 

I came back after calming down and got an okay setup for a 15 min Orb at the tail end. I hesitated a little bit as I knew the stock was not in play, but I said to myself it is your setup and it meets your trading plan, take it. I implemented my knew routine after entry to help with holding to around the 1R and even though I broke some rules today, I could notice it helped a lot. As you can see from the bottom 5 minute chart, if I had stuck with my trading plan of taking a partial at 1R and exiting the rest at 2R, it would have worked out and I would not have gotten stopped out.

Overall a good trading day and a lot was taken away for tomorrow. I have had 3 straight losing trades, so I think a little bit of the urge to take some profit and stop at break even was I just needed to walk away in the positive today.

Sample Set Results,

S E 13 14 15 16 17 18 19 20

Edited July 26, 2019 by Mike B

[Mike B 623]

July 25, 2019 - $AMD (Partial)

Today was all about execution. The goal today was to execute each step of my trade plan with violating any rules.

    Identify Profit Targets - Accomplished

    Place Stop Loss - Accomplished

    Analyze the Risk - Accomplished

    Entry Execution - Accomplished

    Profit Taking - Accomplished

The only rule I violated today was trading a stock not in play. I had $BMY and $TAL on my watch list. The entry I look for did not form on $BMY and $TAL went on SSR. (I do not trade SSR stocks). So, I went to my favorite list and to see if I could get an entry to work my profit taking as that is my focus right now. Proper execution of my profit taking plan. I found an entry and executed the profit taking to a tee. Took a partial at 1R and left the rest to either hit the profit target or stop out at the break even. I will say I met my plan today and advance my understanding of controlling my emotions when the stock moves in my direction.

Sample Set Results,

S E P 14 15 16 17 18 19 20

[Mike B 623]

July 29, 2019 - Nothing

I am just ready for July to be over with. I did not take any trades today as nothing met my entry criteria. I had $MYL, $PFE, $YNDX, and $AMD all on watch. $MYL and $PFE pullbacked back towards VWAP but both lost it and did not reject it. $AMD and $YNDX started a pullback but did not get close enough to provide a good risk to reward entry for me. The best part all four stock worked out as long as you took them short. Maybe today was just one of those days. Anyways, tomorrow's another day. I can't wait for August to get here.

Sample Set Results,

S E P 14 15 16 17 18 19 20