Trading Report Feb 12 – 21, 2008: +$146

Last week’s trading was uneventful. I recall a couple of times I took a small profit too early instead of waiting for the big runs afterward. It would have been a great week.

On Feb 14, I entered a short on the pre-market. I exited way too early because the price kept dropping for the rest of the day and most of the next. Although I knew the price was going to drop, I underestimated the magnitude of it. TraderFeed wrote an article about that day’s market and introduced his method of using the NYSE tick count as another indicator.

I have since added it to my day trading window.

Day trading report Feb 11, 2008: No Trade

I watched the market for about an hour last night and then just went to bed. I was too tired and found that I wasn’t concentrating. My brain was definitely off already.

I seriously considered entering a long at about the vertical line. Then after watching it for a few bars, the price seems to be stuck in a trading range, so it could go either way. Since I didn’t want to wait for long because I almost fell asleep at the table, I decided to not enter a position. It was a good decision because the price would have went below my stop (lowest of past few bars in the trading range) before rising just a 6 index points, and with a lot of struggle too.

For the rest of the day, there were a lot of choppiness and not a lot of big swings. It would have been better to stay off the market because my stops would have been killed.

Although I didn’t make any profit for the day, I didn’t lose any either. So I think going to bed early last because I wasn’t up for it was a wise decision.

Day trading report Feb 8, 2008: +$340

The 3 trade max. rule is working well tonight. I was more patient to wait for the right moment. I almost entered my 4th trade but didn’t because I wanted to stick to my rule, at least for the first day. Luckily, that would have been another losing trade.

I think I’m finally learning that it’s not worth it to get into small moves. The reward/risk ratio is usually not good. And those are usually the emotional trades too, where I somehow convinced myself the price is going to move that way.

-$1000 in 2 days!

I’m down $1000 in 2 days from day trading ER2. Take a look at these graphs and it’s obvious the reason is that I’ve over-traded.

ER2 graph February 7, 2008.

ER2 graph Feb 8, 2008.

I have completely forgotten what I have learned in the past two weeks in Canada. I could blame it on the fact that I’m not used to trading at night and that I was very tired also because of jet lag. However, I shouldn’t have traded at all if I knew that I wasn’t in good condition.

Perhaps the thinking that caused me to trade so many times is that I didn’t want to miss any opportunities. I move in too fast before the signals are mature. Thus, one thing I need to do is don’t guess where the market is moving. Let the signals mature and the price to move a bit first before entering; I don’t have to get in and out at exactly the top and bottom of a swing.

For the moment, I am imposing a 3 trades maximum rule to restrain myself until I’m producing better results and am more disciplined.

Day trading report Jan 31, 2008: +$590

What a day today. Volume was great and swings were huge too. I had a good day today and covered my losses from yesterday. Good days always seem to come after a bad day. I think it’s probably because I’m more calm after a losing day. So now, I just need to maintain my composure even if I’m up.

MBIA had a conference call today and told everyone everything’s still good even though they are reporting a $2.3bln loss last quarter! Go figure! Someone at BillCara is suggesting that the fund managers are proping the market because it’s the last day of the month. Just so they can have a positive January.

I traded the pre-market signal as intended and it paid off. The gap closed as expected but I exited too early again. If only I held longer, my profits would have been in the 4 figures today.

I did well today, entering trades only when the risk/reward ratio is deemed worthwhile. In addition, I am making use of resistance and support levels. I think this helped a lot.

However, I think I need to be quicker on my decision. I found that many times, I was still pondering should I enter and then the price have moved already. On the other hand, my exit trigger is a bit too fast because I’m still not letting my profit run. Thus, I think I need to automate some of my decision making process (like adding some ShowMe’s) rather than just eyeballing my indicators. One idea I’m having is tune my fast time period with an appropriate ShowMe. This should be something simple. I am thinking of implementing a ShowMe for local high/low with stochastic divergence as setup.