How to F#%K Up a Trading Plan 10/30/2014

I was long $JDST overnight with a small position size for me, 1500 shares. Gold was plummeting and $GDX was weak as hell pre market. I decided to sell around 24.20 because it was a decent gain to start the day and I also had a nice gap in $APT. So there I was with about $4,000 realized gains in the morning and feeling pretty swell. I decided that I will now take it slow and look to reenter $JDST intraday on any nice bounces as per my trading plan that I’ve outlined for WEEKS!

Right out of the gate $JDST takes off without me and gets to around 25.50. I wasn’t bothered because I thought there would be a bounce in GDX to take it down to my eventual entry point. I sat and waited for a bounce and decided that I would try and find an entry in $LAKE as it stabilized. I thought there would be a further squeeze in the ebola plays, so I dabbled. All this did was create losses and then take my attention away from the two perfect intraday entries that I could have had in $JDST. First I would have re entered on the flag break around 25 and likely added again at 26.50 for the end of day GDX washout. This was textbook easy patterns, what the hell went wrong? How could I miss these picture perfect entries after planning this trade for weeks?

Screenshot 2014-10-30 19.51.19

Mistakes:

-I didn’t trade what was in front of me. I was fixated on the fact that GDX was “definitely going to bounce” and I could get my entry at a better price. Doesn’t always happen, trade what is in front of you. The train left without me today.

-I was distracted by other poor quality set ups that took my attention (and much money) away $LOCO, $UVXY, $PLUG, $WLT. I then played a game of catch up for the rest of the day and made poor emotional decisions rather than focusing on trades and quality set ups.

-I was looking at my account balance rather than the charts. Reflecting on the day, I remember looking at my account balance and being pleased. I have been in a slump lately but I regained some ground the last two weeks and have been trading well.  After making some stupid losing trades I kept looking at my account and having the desire to “get back to those equity levels.” I don’t know why I keep doing this, it certainly never helps me.

- I tried to “bounce” a beaten chart. Several times I entered $JNUG and actually had decent unrealized gains but didn’t take them. I then held waiting for that big bounce that I thought was coming. There was never any sustained bounce and instead I just mounted silly losses from bounce trades. I’m never successful at these and need to stop trading them unless they are beaten charts right off the open.

Tomorrow is a new day. I need to put this behind me. It was a red day, but manageable. I just need to focus on good set ups and tomorrow will easily be the start of a new string on green days.

 

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Trades for 10/29/2014, Nailed $JDST

I was in meetings until about 1pm today at work, so I was away from the screen until about 1:30. Lucky for me because there wasn’t much action, pretty quiet leading up to the FED meeting at 2pm. I had some $CLF held overnight from yesterday that I sold pre market for a small gain and then stayed away until the FED hearing. When the FED announced the end of QE (truthfully I try not to pay attention much to what they say) I waited to enter any trades and just observed the reaction first. I had been hurt many times by fake first moves and I decided I would let the market digest the announcement for a few minutes.

My roadmap from yesterday on $JDST was in the front of my mind. I was looking for weakness in gold and $GDX after the announcement and I would get long $JDST. When gold started tanking I knew my roadmap would be right, so I took a small feeler trade and bought $JDST. I then added on the first dip around 20.25 and again at 21. My average was about 20.50 and the trade was moving powerfully in my favor so I decided to give it some room. I ended up trimming half my shares at 22.85 and I still have the rest overnight. $GDX fell hard today, more weak than I was expecting, so I think this will carry over into tomorrow. There will be many bounces along the way, so I plan on holding a small core position and trading size around bounces intraday.

Screenshot 2014-10-29 20.50.20

Lastly, I bought $APT overnight for a gap tomorrow morning. I guess there was some news about a big order for $LAKE, so I will take this as a sympathy play and sell tomorrow morning into any strength.

Great day of trading. Positives:

-I stayed away from the market when nothing was happening. Some of this by choice, some because of my schedule, but overall I wasn’t anxious to do anything when there wasn’t any action.

-I created a detailed plan and I executed properly. I took good position size and I trimmed into the close and wasn’t greedy.

Well done, tomorrow is another battle, stay sharp and stay on your toes!

 

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Trades for 10/28/2014

NVAX: Was long some overnight. It sold off PM and I added some at the open at 5.65. I had a low average, so I was ok doing this since the risk was minimal. I was playing for a R/G move. It moved up to 5.8 which put the trade well into the green, but it lost momentum and I sold out back at the 5.65 level. Good try and managed risk well.

TWTR: When it put in a higher low around 10am, I started in small, 500 shares and gave it risk to 41.7 area. Lots of room and room to add. When it confirmed and held 42.5 area, I added 500 more and let it ride to 43.7 area. About $1,200 on this trade, stress free, followed the plan. I like how I added when it confirmed and I stayed in very small size and gave it room. On these washout and rebound trades, I always add too much size initially and therefore I never have patience. Today was different and successful.

CLF: Was stocking this trade and made back my losses and more from yesterday. The plan was to buy dips and get long for the break over 9.7. Things were shaky at first but I got long in the 9.20s with a risk to just below 9. They had a conference call or something at 10am and it looked like things would sell off. It ended up holding the 9 level and I added shares after it moved to the 9.40s with volume. I knew today would be the day, so I kept adding in the 9.40s as it consolidated. A few minutes later came the huge squeeze followed by the halt. I got out of most of the shares way too early in the 10.50s after the halt. Could have been much bigger, but it was hard to say no to the big gains.

The positives on this trade were that I was patient. I added on weakness and sold into strength. Although it could have been a much bigger trade, it was stress free selling into strength.

LOCO: Bought a dip in the 36.05 area around 1:30. It had a nice run but I was holding it for a possible gap and swing into tomorrow. I added around 3:30 when it held the 36.50 level but I had to get out end of the day for break even when it sold off to end the day. I’m glad I followed the plan and sold the shares upon weakness. I had a nice profit at the day’s highs, but I followed the plan to stay long into the close. Not upset about this one, sometimes they just don’t work out, I think there are plenty of plays on this one in the coming days.

JDST: This trade cost me big today. Luckily I was still in the green on the day despite this loss. I’ve been thinking a collapse in GDX was possible in the coming days so perhaps I’m giving this trade too much room and taking too much size because I’m thinking too long-term. See the 60 minute chart below of GDX, this is my road map putting GDX below 19 this week. I think a break of the 20.05 level gets JDST going towards 30, 24 in the short term. I’m confident it will get there, but I am chopping myself up during the last few intraday rebounds. The JDST drop last Thursday plus today’s drawdowns have cost me over $10,000 in realized gains. The stress of this is killing me so I have two choices:

1. Take a smaller position and swing it for 30. Try not to play the intraday swings. Focus on getting a good average in the high teens and let this play out.

2. Take on full position size intraday for the sell offs and then step aside when the market chops.

Screen Shot 2014-10-28 at 5.30.10 PM

I just do not think I can take such big size and swing to 30. What if it moves from 19 to 24 then it consolidates from 25 to 22? Will I have the stomach to sit through 3 points of range before the move to 30? I’m more likely going to take the gains at 24 and wait for the next set up. I think I should hold a smaller core position that I will swing and add size intraday when the set up is there. Best of both worlds.

Ideally gold is strong overnight tonight and GDX opens similar to how it did today. Gap up to the 20.65 area, puts in a top and then sells off from there. I will look to buy JDST in the 18-18.20 area.

I was disciplined on all trades today other than JDST described above. I think that after today’s realization, I will manage my size and risk better on this swing and hopefully prevent these big drawdowns.

 

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Breaking from a Trading Slump

I’ve been in a bit of a trading slump lately, hence the reason for me blogging again. I find that writing down my thoughts each day will help me in my trading if I recall the principals that have made me successful in the past. Every trader enters a slump when they stray from the principals that make us all successful. I sat down this morning and asked myself some reflective questions to shed some light on what I’ve been doing wrong.

How did you end up in this current trading slump?

After a good run I started breaking rule, trading too much size and just being careless. Once I had a drawdown I felt it was necessary to recapture equity highs as soon as possible. This then spiraled into more and more poor trading in order to get back to where I was which inevitably leads to more broken rules. Before I knew it, I was completely emotional about each trade and I was trading much more frequently than normal so that I could earn back losses as quickly as possible. You then get into a negative thought spiral that consumes you and your mental health.

What will you do starting today to get out of the slump?

I am going to change my mental approach to trading.
• I will not focus on account equity or P&L. Only focus on high quality set ups and proper position sizing. Profits will follow.
• Get out of losing positions quickly. Give winners time to run but never have any patience with your losers.
• Stop following other people’s trades. Use others to generate ideas, but make each trade your own.

What trading principles will help you emotionally while you rebuild?

Slowing down, patience is key for finding the right quality set ups.
Less is more. I will shorten my watch list and only focus on the best of the best. Stop jumping around from one chart to the next every time someone tweets and idea or news comes out. Do your homework the night before and narrow down the ideas to only the best.
• Short-term focus, you do not need to make a year’s salary in one day. Take it one day at a time, one trade at a time. Try and be green each day, do not swing for the fences.

Trades for 10/27/2014

Today was a very frustrating day. I feel I followed my plan well and executed properly, I just could not catch a break and it ruined what would have been a great day. I finished green, but it almost feels like a losing day. I traded 10 stocks today and was wrong on 6 of 10. I still made money, so my risk management was good, but here is what was frustrating about the day:

$CLF: I was buying dips for an anticipated breakout of the 9.70 level. I had about a 9.45 average and the stock started moving in my direction. It hit the 9.75 mark where I knew there would be some resistance, but again, I was anticipating a breakout. It did not break through but instead it proceeded to drop .35 in 2 minutes. It chopped around so I exited and decided to wait for another set up.

$SPEX: Looked like it was going to have a strong day. It quickly moved above 1.40 this morning and was finding nice support in the 1.40 range. I’m expecting it will make a run and eventual break of the 1.60 level, so I bought dips over the 1.40 level. Things looked good around noon time but then everything fell apart as you can see. This one was the biggest loser of the day as I couldn’t get filled on some sells until the low 1.30s.

Screen Shot 2014-10-27 at 4.27.21 PM

$GPRO: This one really pissed me off. I went long on the intraday triangle break, my average was a bit over 68. It acted well for a few minutes and then the bottom fell out. I got out between 67.25-67.60. It was a loss but I traded the plan, so I can’t be upset about it.

Screen Shot 2014-10-27 at 4.29.54 PMOn the plus side, $JDST was a big winner and put me in the green, I also shorted $FB early in the day for some quick gains, then got out before the chop. I continue to love the way this is setting up and the after hours action is very bullish. Also long some $NVAX overnight for the gap.

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Today’s Trade Plan

-Few set ups I like this morning. Do not force any trades. Less is more. Be patient and let the trade come to you.

-I am long JDST for a longer term swing trade. Let the trade work for me and be patient. Obey stop loss levels but do not be too anxious to take profits when moves in my favor. GDX should have long term break down and JDST target is in high 20s.

-Protect your account. Trade small and add to winners only.

Friday Trades

I didn’t follow my plan from this morning. Silly me. Although I was green on the day, I ended up giving back much of my gains from the morning push.

Had APT overnight and sold premarket at 5.50s for a big win. I later bought the morning dips in the 5.20-30s and sold out for additional profits by 11am. This was my big daily winner. Also sold GTATQ into morning push for another win. At this point I was at my highest profit of the day by 11am and I should have just stepped away for an hour and waited patiently for set ups. Instead I completely overtraded and gave back some gains by mid afternoon playing IBIO, ESI and back and fourth between NUGT and JDST. Small losses started to add up and I became frustrated.

By end of day I bought ISR for a late day breakout and run around 3:30. I was up nicely on the trade and sold off some into the spike at 2.03. I held the rest for a possible overnight but the trade went completely limp by the close and I sold off into the weakness. I wanted to be all cash going into the weekend but I’m only holding a small JDST position overnight for a swing. I really believe GDX crashes in the coming days and I don’t want to miss any of it.

Screen Shot 2014-10-24 at 4.26.10 PM

Overall here are the positives from today:

1. Sold overnight positions into morning strength.

2. Had good position sizing and protected gains in morning.

Negatives:

1. Overtrading. Had 72 orders on the day. I usually excel when this number is 30 or less.

2. I traded during the market lull. I should have sat it out until about 3pm.

Focus for Monday:

-Nail the open and step aside by 11am.

-Be more selective in trades. Only take the best set ups and be more patient. Less is often more.

Overall, a great end to the week and I should be happy with the gains. Have a great weekend. Rest and return with a positive mindset come Monday.

Trade Plan for Friday, Every Friday.

1. Let the trade come to you. Buy dips, sell rips. Do not ever chase.

2. Trade only ideal patterns and ideal entries. Never force a trade.

3. Cut losses quickly. Live to fight another day.

4. It is Friday, you had a good week and a good start to the day. Watch sizes. There is always tomorrow. You have no reason to take on unnecessary risk.

New Theme, New Context

Ok, so here I go again for the third time. I started the blog initially, stopped because of how busy I became, then restarted after I had a baby, and now here I am ready to begin journaling once more. However, this time I am back and I’m humbled by what I have learned over the last year. I certainly do not know as much as I thought I knew. On second thought, I know much more than the average trader, but what I have learned is that I am not a master of myself. I lack discipline and I regularly fail to execute my trading plan due to my own emotional insufficiencies.

The last year has been full of amazing trading streaks but it has also been full of trading slumps such as the one I am in right now. I am most motivated to begin writing in order to journal my daily trades and to identify the flaws in my daily habits. My purpose is to focus on my successes so that they can be duplicated rather than constantly looking at mistakes.

$TSLA Triangle Still Working

I posted this same chart yesterday, here it is updated. I’m long TSLA from 89.90 yesterday. It is still behaving very nicely from this triangle breakout on the 15 minute. Targeting new highs. I have to say, I’m quite nervous about all the optimistic holders on the stocktwits and twitter streams. People are already calling for 100-120. Let’s just manage risk, keep raising stops and see how it goes. I hate when people shout out crazy AND CONFIDENT price targets. 

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Also long SCTY from $48.4. It is breaking out of this flag pattern and also targeting highs. It backtested the breakout and looks ready to go again this afternoon. 

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