MC's House of Mirrors

[mcichocki_]

http://www.jamphat.com/rap/

WOW...ROFL!!!

If you guys know any rap lyrics and want to see them converted to charts/graphs check this out.

There is vulgarity so maybe not work safe, but it's rap...it's not meant to be clean.

[mcichocki_]

I just did my taxes...

Net lifetime loss in the market is about -$1,300 over the last 14 months.
Commission for all trades was $1,100ish.
Tradestation net slippage was -$300.
401k shifting from my knowledge was +10% or more.

So barring commission and slippage I actually would be literally in profit. I know that's not realistic and commission is the cost of doing business but still interesting none the less. The 401k shift and capital loss tax write offs saved me some sexy money so my net experience in 14 months is green as far as I'm concerned.

This year will be my 1st profitable year, I have no doubts on this as the only past limitation was my mind. I have been on FIRE with my demo account (yes I've always said it's nothing like live). Short term scalp/daytrades on the YM this week have been $500-800 a day. I feel like I owe this change to "trading in the zone". I'm going to read it a 2nd time and then fund a futures account to try my edge again with my more solidified discipline thanks to the book.

YTD the paper account is up $3906 net, playing within reason for my equity level. All comes down to showing the same discipline and execution when live.
$4585 gross before $679 commissions.

Added------
Something just clicked even further when I re-read this back to myself. I did very well on the 401k shift, not perfect but a true profitable trader is NOT looking for perfection in relation to gains. If you're chasing perfection in gains instead of perfect execution of your system you're set for failure and are being un-realistic. You will NEVER know for certain what's next in the market, and to think you will is going to lead to mistakes and losses.

Couple the above with the fact I was "trading" (more less) with an account I have no concern over. It's 401k and since it's gone from my check I don't even look at it as my money. When I removed the fear of risk, as I do with the paper account it was effortless and quite profitable. Going forward I will fully embrace the risk of testing out the unique market moment and simply pony up the stop as a token of my willingness to try the edge which I know has net profitable expectations. It's all been clear from very early on but in typing this over and over on boards it's starting to seep into my subconscious mind. This is where traders succeed or fail, the back of the dome, NOT what you know to be true but cannot act upon. The way we were brought up conditions us to have involuntary reactions that sabotage us in a trading endeavor.

[mcichocki_]

I annotated this back a bit ago...


Currently...
UA is still looking strong against the broad market. $37-38 would be a good target entry with a tight stop loss.
Let's see if it pulls back that far or decides to rally without any new holders.

[mcichocki_]

When are stocks bad and futures better? TAX TIME

My stock nightmare...YES they had to be hand entered.




YES my 54 trades on futures get entered like this.


Not the P&L I'm looking for, but that was my first full year of trading so I came out pretty much unscathed.


Let's see if I can make 2008 a better year.

[mcichocki_]

They are selling into the strength IMO. That's what changes trends, when all the big money is out and bad news or something else hits the herd runs too little too late. Buy low on panic, sell high on news that creates herd greed.


Scaling in at lows 1,2 and 3. Hype rally then selling at 4. Rinse and repeat.
Also noteworthy is the supply line (volume by price)...they sold at the same key level both times with large volume. Then notice the limited volume that follows the hidden selling, that's big money showing no demand. This is how the market cycles and why I say retail moves nothing and big money is the coattail to ride. It's also why I suggest noting key levels at least as heavily as trendlines if not more so.

Good trading guys.

[mcichocki_]

ALL the index ETF's are showing similar traits with divergence and volume based support. One set stands out from the others to me though and thats the SPY/ S&P. I think this guy has a chance at leading the way for what's to come in the broad markets.




Here is my view. I remain bullish mid term and think we could get a large rally before the herd expects it.
Shorts will probably SCREAM and cover from this next wave also.

Macd divergence is fairly large and macd histogram divergence is backing us up as well.

Volume, volume, volume. Folks volume like this down low is bullish, that's not retail, that's big bucks moving around and in this case buying in at the lows. Why do I think it's buying...look at the support level and how it's been fought with big $. Go to the intraday charts and look where the volume is focused at...down low. Pros don't buy high and sell low folks.

Yes we have a descending triangle, yes we have both volume by price and the top trendline as resistance. BUT the top trendline is pinching off and building pressure like a spring. This spring is getting tight and that's why I feel whichever direction it breaks will have some great momentum behind it. Based on the above backing reasons I have to carry a bullish bias and fade the herd here mentally.

All that being said, a wise trader may have a bias but rarely trades on it. You should be ready for momentum to either side for the best odds of a winner. If your aggressive you could buy at support down low. The more conservative approach will be to have a buy stop AND sell stop in place just outside the triangle so whichever way it breaks you would capture some of the momentum early and then just trail the stops and manage the trade.

Good trading
MC

[mcichocki_]

I just watched a video and something clicked on the issue of taking profits early.

First let's look at why I (and many others) have this psychological issue of taking profit early...
1) Fear of being wrong and to end the pain of not knowing what will happen next.
2) Feeding the greed with quick profit to gain temporary pleasure.

I have known of and clearly defined my above issues some time ago, but breaking down your psyche and rebuilding is a difficult task to do by yourself. I still have some work to do myself, but I am getting better as I practice and focus on the below facts. Maybe they can help you also?

1) Focus on remembering that we can't possibly know whats coming next and just to use your edge and execute.
We have back tested and clearly defined the edge to prove it valid and profitable, now it's time to use the edge to make money through consistent execution. Fully embracing the risk and truly believing we don't need to know what's next should remove the fear and pain we create from issue 1.

2) Then think back to all the times we have taken $30 early to feed the greed, only to realize when it's too late that the move was worth exponentially more. :-\ Had we just executed the edge those few runner trades would have more than made up for the stop outs and we would be making great money. It's not small profit often that will make us net positive, rather just one good move caught and executed on could make a traders week, month or even make the year. The short term pleasure turns to negativity when you realize you are not executing and leaving $$$ on the table, costing you net profitability!

There's a cycle in place stemming back to the values we were raised to believe in. In the market these values are incorrect and they need to be broken in order to succeed. I will continue to work this out and I will become a successful trader.

To my point about the speaker in the video, something he said made me think...
Don't look at profit as something that causes emotions, look at it as a risk free trade.
A trade in the green is a risk free trade, all you have to do is manage it.

Good trading and Happy Easter,
MC

[mcichocki_]

Weekly is kind of what I'm focused on for the mid term. Week isn't over but that macd cross is tasty looking.
Can't wait to see how we close tomorrow.

[mcichocki_]

	Quote:	mcichocki_
	ALL the index ETF's are showing similar traits with divergence and volume based support. One set stands out from the others to me though and thats the SPY/ S&P. I think this guy has a chance at leading the way for what's to come in the broad markets. Here is my view. I remain bullish mid term and think we could get a large rally before the herd expects it. Shorts will probably SCREAM and cover from this next wave also. Macd divergence is fairly large and macd histogram divergence is backing us up as well. Volume, volume, volume. Folks volume like this down low is bullish, that's not retail, that's big bucks moving around and in this case buying in at the lows. Why do I think it's buying...look at the support level and how it's been fought with big $. Go to the intraday charts and look where the volume is focused at...down low. Pros don't buy high and sell low folks. Yes we have a descending triangle, yes we have both volume by price and the top trendline as resistance. BUT the top trendline is pinching off and building pressure like a spring. This spring is getting tight and that's why I feel whichever direction it breaks will have some great momentum behind it. Based on the above backing reasons I have to carry a bullish bias and fade the herd here mentally. All that being said, a wise trader may have a bias but rarely trades on it. You should be ready for momentum to either side for the best odds of a winner. If your aggressive you could buy at support down low. The more conservative approach will be to have a buy stop AND sell stop in place just outside the triangle so whichever way it breaks you would capture some of the momentum early and then just trail the stops and manage the trade. Good trading MC

Fade the herd baby, this was a post I made in a woods filled with bears.
1 day before the mid term reversal.

[TacTrader]

Hey nice journal....

Have you thought of scaling out of your trades? I found that when trading multiple contracts, taking off 1/2 or some other percentage of the trade at a preset target helps me psychologically. I get out and bank a small portion then leave the rest on for the big move that may or may not come. If not, I get stopped out at break even but still have the original smaller profit. It is a happy medium for me...