This is my journal I am using to stay disciplined with my trading. I will have my market analysis as well as self analysis included here. Also some articles I particularly like or other ones that I write just to get the thoughts down.
Trading for 11th July
Posted 07-13-2008 at 11:34 PM by jasont
Here is my journal from the 11th July:
Today at 9:55am we have the Prelim UoM Consumer Sentiment which will be something to be weary around. In the overnight market we have seen a steady decline and currently reside at the 1238 area. The 1237 area will be a possible make or break spot with a double bottom yesterday.
The selling hasn't really been accelerating on the moves to new lows which is interesting. 1251 is the new pivotal area for the market, a move beyond there with some strength will be needed to get more buyers on board. Though I am refraining from suggesting one way or the other right now. In light of the recent trading performance I am going to trade a sim account for today.
9:45 I'm going to remain more casual about tonight. I entered long at 1235.50 for a bounce from just beneath resistance. We had a tick extreme to the downside and volume extreme as we made the Tick extreme. I had my stop at 1233.50 and initial profit target at 1237.75.
I moved the initial target down to 1237 though as we were struggling to move beyond it. The initial target was taken and now we are hitting the resistance at 1242. I now just took the second position off at 1241 as we are showing weakness from the tick here at resistance. 1.5 points made on the first position, 5.5 points made on the second.
10:46 As I said I am taking a casual approach today, trying to make things less serious orientated. We came up just beyond the 1242 resistance area and made a volume extreme. We then failed to garner follow through volume as we moved higher.
We were showing reluctance by the stocks to continue the buying through the tick so I looked for a short trade. It took me 4 attempts but the 4th finally got the move I was looking for. The first of the 4 was way too early on the entry and I took max loss. The other two were good but the market wasn't quite ready to turn and I wasn't willing to leave the position to find out. The last one was more concrete and showed further signs of falling so I stuck with it.
11:41 After we made new lows we were registering a divergence between the Tick and the price action of the ES. I tried the first time to long the market but was a bit too early. I then tried after we registered a rejection candle of lower prices and made a big volume extreme. I lost two points on the first position and made 1.25 points on the second.
I wanted to be in at 1228 but my position wasn't taken and I waited too long to get in again. I took my exit as the long side is currently not the best side of the market to be on as there is no clear support areas I have.
11:47 Well I'm calling it a night. Made 12.50 points in sim account. I picked up on something very interesting with my short trades. I tend to get in way too early on those. I will have to figure out a way to delay my short trade entries. I saw that it is ok to be in a few trades that take small losses as long as I make sure I get it when it moves.
I may have been putting too much emphasis on finding the exact entry. Better to have a crack, not give it much room but if it goes, stick with it. I felt much better trading today, no doubt because it was in a sim account rather than my account. It has always been the case that I am more relaxed and trade better in the sim account. Something to work on.
Daily Wrap Up
I took a casual approach to the market as I felt recently I have been putting too much pressure on myself to perform. In fact it has been building into a bit of performance anxiety that I believe needs to be dealt with.
Today saw the market take a quick sell at the open but found some strength at just beneath previous lows. As I saw the Tick register a selling extreme I saw a potential testing of the lows rather than follow through selling. The long trade was well placed and the trade was good. Again cementing my long trade performance.
The opposite end of the scale was a bit different though very helpful for my development. The decline in volume triggered me to a possible turnaround to lower prices combined with the failure of the Tick to make a decent move higher. As has been happening with my short trades, I entered too early and was stopped out.
I then took another few attempts to short the market up there, getting in and out a couple of times with minor losses. The first trade is the only one I believe was in fact too early, the others were well timed but I took my risk off the table as we didn't prove the position correct in a timely fashion. Finally the last one I kept on as I saw mounting evidence to a sell off and we did that.
I had my entire position off shortly after the big move because we presented a selling extreme on the tick and a massive volume extreme. We were at a double bottom area and the speed and size of the move are usually telling points of a reversal. I didn't want to risk that and took a nice gain of about 12 points.
The last area was a long trade made to capitalize on the divergence between the lows on the tick and the lows on the ES. Another nice volume extreme presented itself as well. I was too early on the first attempt but the second attempt was ok. It was a bit late and had me cautious. I got out sooner than I should have though it was good to see me air on the side of caution.
Overall it was one of the better days of my trading. In simulation I manage to take all of the signals that are presented, something which I fail to do when trading my live account. The result for the day showed the potential my edge has when applied when it should be. It is good that I am seeing the difference between the two though.
When I trade my live account and simulation account, I have the same setups and guides to follow. So for me the solution lies in bridging the emotional gap that has been built between the two. I was happy with the day's performance and think the solution to my performance slump lies within the answers shown in today's trading.
Trade 1a: 1.5 Win
Trade 1b: 5.5 Win
Trade 2a: 2.0 Loss
Trade 2b: 2.0 Loss
Trade 3a: 0.75 Loss
Trade 3b: 0.75 Loss
Trade 4a: 0.75 Loss
Trade 4b: 0.75 Loss
Trade 5a: 2.5 Win
Trade 5b: 11.5 Win
Trade 6a: 2.0 Loss
Trade 6b: 2.0 Loss
Trade 7a: 1.25 Win
Trade 7b: 1.25 Win
Daily Result: 12.5 Gain
Today at 9:55am we have the Prelim UoM Consumer Sentiment which will be something to be weary around. In the overnight market we have seen a steady decline and currently reside at the 1238 area. The 1237 area will be a possible make or break spot with a double bottom yesterday.
The selling hasn't really been accelerating on the moves to new lows which is interesting. 1251 is the new pivotal area for the market, a move beyond there with some strength will be needed to get more buyers on board. Though I am refraining from suggesting one way or the other right now. In light of the recent trading performance I am going to trade a sim account for today.
9:45 I'm going to remain more casual about tonight. I entered long at 1235.50 for a bounce from just beneath resistance. We had a tick extreme to the downside and volume extreme as we made the Tick extreme. I had my stop at 1233.50 and initial profit target at 1237.75.
I moved the initial target down to 1237 though as we were struggling to move beyond it. The initial target was taken and now we are hitting the resistance at 1242. I now just took the second position off at 1241 as we are showing weakness from the tick here at resistance. 1.5 points made on the first position, 5.5 points made on the second.
10:46 As I said I am taking a casual approach today, trying to make things less serious orientated. We came up just beyond the 1242 resistance area and made a volume extreme. We then failed to garner follow through volume as we moved higher.
We were showing reluctance by the stocks to continue the buying through the tick so I looked for a short trade. It took me 4 attempts but the 4th finally got the move I was looking for. The first of the 4 was way too early on the entry and I took max loss. The other two were good but the market wasn't quite ready to turn and I wasn't willing to leave the position to find out. The last one was more concrete and showed further signs of falling so I stuck with it.
11:41 After we made new lows we were registering a divergence between the Tick and the price action of the ES. I tried the first time to long the market but was a bit too early. I then tried after we registered a rejection candle of lower prices and made a big volume extreme. I lost two points on the first position and made 1.25 points on the second.
I wanted to be in at 1228 but my position wasn't taken and I waited too long to get in again. I took my exit as the long side is currently not the best side of the market to be on as there is no clear support areas I have.
11:47 Well I'm calling it a night. Made 12.50 points in sim account. I picked up on something very interesting with my short trades. I tend to get in way too early on those. I will have to figure out a way to delay my short trade entries. I saw that it is ok to be in a few trades that take small losses as long as I make sure I get it when it moves.
I may have been putting too much emphasis on finding the exact entry. Better to have a crack, not give it much room but if it goes, stick with it. I felt much better trading today, no doubt because it was in a sim account rather than my account. It has always been the case that I am more relaxed and trade better in the sim account. Something to work on.
Daily Wrap Up
I took a casual approach to the market as I felt recently I have been putting too much pressure on myself to perform. In fact it has been building into a bit of performance anxiety that I believe needs to be dealt with.
Today saw the market take a quick sell at the open but found some strength at just beneath previous lows. As I saw the Tick register a selling extreme I saw a potential testing of the lows rather than follow through selling. The long trade was well placed and the trade was good. Again cementing my long trade performance.
The opposite end of the scale was a bit different though very helpful for my development. The decline in volume triggered me to a possible turnaround to lower prices combined with the failure of the Tick to make a decent move higher. As has been happening with my short trades, I entered too early and was stopped out.
I then took another few attempts to short the market up there, getting in and out a couple of times with minor losses. The first trade is the only one I believe was in fact too early, the others were well timed but I took my risk off the table as we didn't prove the position correct in a timely fashion. Finally the last one I kept on as I saw mounting evidence to a sell off and we did that.
I had my entire position off shortly after the big move because we presented a selling extreme on the tick and a massive volume extreme. We were at a double bottom area and the speed and size of the move are usually telling points of a reversal. I didn't want to risk that and took a nice gain of about 12 points.
The last area was a long trade made to capitalize on the divergence between the lows on the tick and the lows on the ES. Another nice volume extreme presented itself as well. I was too early on the first attempt but the second attempt was ok. It was a bit late and had me cautious. I got out sooner than I should have though it was good to see me air on the side of caution.
Overall it was one of the better days of my trading. In simulation I manage to take all of the signals that are presented, something which I fail to do when trading my live account. The result for the day showed the potential my edge has when applied when it should be. It is good that I am seeing the difference between the two though.
When I trade my live account and simulation account, I have the same setups and guides to follow. So for me the solution lies in bridging the emotional gap that has been built between the two. I was happy with the day's performance and think the solution to my performance slump lies within the answers shown in today's trading.
Trade 1a: 1.5 Win
Trade 1b: 5.5 Win
Trade 2a: 2.0 Loss
Trade 2b: 2.0 Loss
Trade 3a: 0.75 Loss
Trade 3b: 0.75 Loss
Trade 4a: 0.75 Loss
Trade 4b: 0.75 Loss
Trade 5a: 2.5 Win
Trade 5b: 11.5 Win
Trade 6a: 2.0 Loss
Trade 6b: 2.0 Loss
Trade 7a: 1.25 Win
Trade 7b: 1.25 Win
Daily Result: 12.5 Gain
Total Comments 4
Comments
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Hi Jay,
Great trading. Perhaps the current market has been too emotional, as evidenced by VIX, for your style? With your method your stops are pretty tight and conditions have favoured methods such as you employed recently - smaller size allowing for wider stops. On the subject of simulation and live trading I wonder if it's feasible for you to trade a small number of SPY but retaining your current methods for entry and exits, at least at times when VIX is relatively high? Pschologically, I find it helps me to think of the market as a game, bulls vs bears. When I'm in a position I will often try to note the next objective for each side rather than worry if the trade is going against me. Keep up the good work  |
 
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Thanks for the great comment LP. You're right about the market being a bit too emotional for my style using tight stops. In these conditions one of two things usually need to be implemented, either have better timing or increase the stop size. Thankfully this week has seen things simmer down a bit from the recent emotional craziness in the market. I also believe my own emotions were causing me grief.
A few people have mentioned using the SPY on occasion, the weird part of this is that the actual money doesn't appear to be my problem as much as taking a loss when I'm deviating from the plan. The monetary loss is usually quite small and leaves a "whatever" feeling about the actual $. I could be extremely ignorant to my own beliefs here though. I have found this emotional market has caused hesitation which frustrates me and impulse trades which have me scratching my head as to why I exited or entered. More a problem with me wanting to be right seems to be slapping me around at this point. Switching to the simulation account for short trades of recent has made a big difference as well as taking a more casual approach. I like your psychological approach of thinking of the market as a game. It is in fact the same way I think about it when I trade simulation, I just need to transfer that across into the live trading. Thanks for the great support LP, I really do enjoy your wisdom and well wishes in my blog.  |
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Thanx Jay,
It's not for me to comment about the problem of wanting to be right, I'm more guilty than yourself much of the time  I forgot to add a comment about getting into shorts too early. I'm pretty sure from your notes you read the sentiment perfectly well. Your approach was excellent especially reading volume. Again I think a large part was the emotional state of the market. That said though, I do find that reading sentiment does tend to lead to early entries. I know many will say wait for price confirmation but I know that can just lead to being whipped out again with a poor entry. I honestly believe you have the right approach and with more experience you'll read the different types of market and you'll get a feel for when the buyers will stop buying. It may be you can give the bulls the benefit of any doubt and let them print another bar before you enter? That way if they surprise you with a higher high you won't be stopped out. Both bulls and bears like to pause to catch their breath especially if they've just made a marginal high on a move. Volume is telling you what's really happening but too many times bulls and bears find a second wind before they fail. If you want to transfer the simulation 'game' across to live trading perhaps you could limit yourself to one such trade per day and try it once you've relaxed and the market has settled? Good to see you run the winners |
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Thanks for the kind words in regards to my sentiment reading LP. I agree that sentiment reading does lead to early entries, in a way you see the market starting to weaken but it takes a little while longer for it actually to turn.
I too find waiting for price confirmation leads to being whipped out and the only way to prevent that is to have wider stops, something you probably ordinary know I'm not fond of. It is good to receive your comments about having the right approach. At the end of the day it really does help me stay on track having such positive encouragement. Your advice on waiting for the bulls to print another bar before entering is great. It is in fact something I have been working on this week with my short trades and it has been paying off. At first I felt like I was entering in late but with more trades I realized that getting in a point or so later is substituted with further confirmation of a move. If that makes sense. I'm not exactly sure what you mean by your comment "limit yourself to one such trade per day and try it once you've relaxed and the market has settled?". Are you suggesting to sim trade a few first and then trade a live one after I have relaxed a bit more? |
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Recent Blog Entries by jasont
- Moving Journal (08-03-2008)
- Trade Setup For 1st August (08-01-2008)
- Trading for 31st July (08-01-2008)
- Trade Setup for July 31st (07-31-2008)
- Trading for 30th July (07-30-2008)
