Based on the pattern of my music video postings, I should be posting a song by a "new" band this week. But I'm just not in that type of mood.
So instead, I'm posting one of my favorite Bob Dylan songs.
Bonus points if any Pavement fans out there can tell me which lyrics from this song they lifted and put into one of theirs.
I made that rule the title of today's post because it's the reason why today was the first day I made money all week. Also, after today, I feel I've learned that my constant violating of that rule is also a major reason why I have been in such a slump for so long.
I'm not saying that I've completely isolated my problem that easily and quickly, but today, simply because I was conscious of adding shares only to winning positions things went much smoother for me.
First and foremost, this rule prevented what could have easily turned into a disaster for me in BTU in the early morning.
I bought 200 shares of this stock near the open at 45.35. I bought it because it had pulled back for the last 2 days on light volume after a strong run-up on strong volume. Anyway, it went up and so I bought 100 more shares at 45.48 a couple of minutes later. I decided to take some profits right away because it broke above .50 and the market (at that time) was acting jumpy. I sold 200 at 45.59 and stopped 100 at the low. I was stopped out of that 100 shares seconds later at 45.27. So, it was a small winner.
The stock bounced off a trend line that I had drawn on a 60-minute graph that had held since last week. So, I bought again and was filled at 45.40. Less than 10 seconds later the stock came down and took my stop out at 45.25.
I bought again, this time at 45.33. Again, the stock broke the low of the day and stopped me out seconds later at 45.17.
The key here is that I only lost $41 in the stock even after getting all choppped up. That happened because I only added to my position once, and that was on the trade off the open that I made money on. On every losing trade in BTU I kept my losses small because I never added to the losing positions.
Most important, because I wasn't adding to losing trades, I never felt like I was "fighting the market". I was losing, yes, but I was accepting the losses and moving on, not building bad positions and getting caught up mentally in them.
Of course, if you check that graph I was basically stopped out near the lows of the day and then the stock ripped 80 cents. Frustrating? Yes, but not debilitating.
I don't like to lose more than 20-30 cents in a trade. It means I get stopped out a lot, but as long as I can keep the losses small, I can make money.
Anyway, so here's my good trade.
I was watching RAS today because I saw he was close to breaking the downtrend line, that has been in place since late March, on a 60-minute graph . When MTG, another stock that I feel is loosely related, began to rally despite a poor earnings report, I bought a couple hundred shares of RAS at 26.21 and then 100 more at 26.23. This was right around 10:05.
This was clearly an example of me anticipating a trade, a topic that Michelle B. tackled today over at Trader Mike's site. The trend line that I was hoping to see RAS break was still a quarter-point away, so I figured this would be a safe place to initiate a position. Even if he didn't break the line I would be able to get out with a small gain or, in a worst case scenario, break-even. And I figured with the market looking stronger and with other stocks in it's sector rallying that it was worth trying to buy RAS a bit "early" in anticipation of a break.
Anyway, it worked. A few minutes later, RAS ran up to 26.50, breaking the trend line and stopping me into 100 more shares at 26.52 so I had 400 shares of a stock that was acting how I wanted it to. When he traded below 26.50 for a couple of minutes without breaking it's uptrend line for the day, I took the opportunity to buy 200 more shares. So now, I had 600 shares and the stock was breaking the 60-minute downtrend line. I felt pretty good about it.
When the stock advanced to 26.67 but then slowed, I sold 400 shares at 26.61, taking some profits. But I kept my eye on the stock. When it broke 26.67 I added again to my position at 26.70 and again at 26.78 bringing it back up to 400 shares. I held through a base between 11:30 and 1:00 and once the stock broke out of that base, I was in the clear. I sold towards the end of the day at prices ranging from 27.30 to 27.47. All told, it was the best "feeling" trade I've made in a long time.
Anyway, here are the numbers:
P&L, $543
stocks traded, 16: 8 positive, 8 negative
total trades, 172
volume, 15,000 shares
Evolution Trader, $1677 on 70,200 shares traded.
TradeWhileWorking, $1472 on 3000 shares traded.
Misstrade, $1,000 on 4000 shares traded.
Me, $543 on 15,000 shares traded.
One Bad-Ass Trader, $172 on 4200 shares traded.
NYSE Scalper, -$515 on 17,000 shares traded.
A good day for the VO overall, as we had 3 traders break $1000 in daily profits. Evolution Trader worked hard for his money today as he traded over 70,000 shares, while TWW and Misstrade booked good profits while trading very lightly. There are many ways to crack the nut.
Me and OBT finally broke out of our mini-slumps and the NYSE Scalper had a half day since he hit his loss-limit and split. I have big respect for those traders who are disciplined enough to follow their own guidelines in that way.
Outside it's gray. The rain is beating on the windowsills. But, for today at least, inside the cave things are quiet and warm.
I haven't broken a rule today and things here are about as calm as they get. I even managed to make a "good trade" in RAS which I'll share in some detail after the close. For those inclined to make swing trades, you may want to take a glance at the 60 minute graph for this stock... it broke a downtrend it's been in since late March in strong volume.
I went back to an old practice from when I started trading, that is, I took my p&l off of my screen. It helps me focus less on the money and more on making the right trades. I know I'm not up size or anything... it's hard to be up size when you're trading with 2 and 3 hundred share positions, but I'm happy and not panicked, which is nice... and rare lately.
Another thing I used to do was walk away from my station for at least an hour a day in the middle of the day. I'm going to do that now, sip some green tea and read a chapter from the book I'm reading, Our Man In Havana.
After yesterday's debacle, it is time to stop the bleeding. I began this blog after I got smoked badly twice in early March and spent the rest of that month having to make money back. I can't let that happen this month.
So today, I am starting all positions with 200 shares only. If I am in the money in a trade I will allow myself to buy 100 more shares. That's it. I'm starting over, if you will. Trading light... float like a butterfly, sting like a bee.
I was working on my next "history" post last night. I'm at a point in the history where I'm studying for the Series 7 and papertrading once a week or so at the office. Everything then was so wide-open with possibility, there was so much potential. Anyway, just thinking back on it gave me a sense of hope.
Sometimes I feel like I've already written the end of my stock trading story. Based on my performance since December that the ending goes something like, "And then the hybrid market came, he couldn't adapt, and blew up." But I can actively work to change that ending. It doesn't have to be the meteor that mades this Dinosaur go extinct.
An early favorite author of mine. I remember taking Welcome To The Monkey House with me away on a vacation when I was 12 or 13... it was the first book of short stories I had read like that. I was hooked and hit Slaughterhouse 5 and Cat's Cradle soon after.
Then, I hit video games and put down books for a few years... too bad. Wasted time.
Anyway, voices like his are hard to come by.
Misstrade, $1590 on 6500 shares traded.
NYSE Scalper, $403 on 56,200 shares traded.
One Bad-Ass Trader, -$160 on 14,600 shares traded.
Evolution Trader, -$884 on 52,200 shares traded.
Me, -$1153 on 38,400 shares traded.
TradeWhileWorking, -$1205 on 1600 shares traded.
Misstrade enjoyed another solid day of gains and I didn't even include his non-stock profits... The Scalper had another profitable day... any 10,000 share trades today, Mr. Size?
OBAT continues in a bit of a holding pattern. Evolution got a little roughed up. Check his blog for the gory details...
Me? I got creamed again. The worst part about it was that I never really felt out of control... just consistently making bad decisions. Reading graphs wrong. Fundamental trouble. I'm either taking a day off tomorrow, paper-trading or limiting myself to 300 shares per trade. I'll put up my daily post later... have big important dinner plans tonight, so I have to get out of here for awhile.
TradeWhileWorking, took a hit. Check his site to see what happened.
We had our first negative day today as a group. -$1409 for the day.
Eh, the market is slow for me today... so let me share a paragraph I read last night from one of my favorite writers, Paul Theroux. It's from an "imaginary memoir" he wrote called "Lady Max" which appeared in the literary magazine Granta.
And her words were tainted by the dark whiff in her breath. She was a heavy smoker and I was sitting near. It was the odor of her lungs--not a rancid thing in her mouth, but deeper. It seemed especially odd and offensive because she was so lovely. She had stubbed out her cigarette, but she still smelled strongly of smoke, of black clammy London, of sooty air.Anyway, speaking of smoke, I'm down again... -$398 here in the first hour. I'm out of all my positions and just watching. No disaster stocks, just not a single stock in the green right now (sigh).
Even if you don't care about the company they profile, the part with Lindsay in her "natural habitat" is just hilarious. Great comedy.
And, if you do enjoy the Planet Earth series on the Discovery Channel, make sure you check out Blue Planet as well. Equally amazing.
Nothing like one of my old favorite "post-bubble" commercials to help cheer me on what was a crappy day in the cave. Gonna have to start feeding my family frozen Pterodactyl soon... things are grim. Anyway, still trying to find some of the ones from 1999 or so. If anyone remembers any other good ones let me know.
Misstrade, $12,270 on 12,000 shares traded.
NYSE Scalper, $639 on 46,200 shares traded.
Evolution Trader, $289 on 51,400 shares traded.
One Bad-Ass Trader, -$48 on 9,400 shares traded.
TradeWhileWorking, -$223 on 1,000 shares traded.
Me, -$646 on 49,800 shares traded.
A huge day for Misstrade today... trading DNDN like a master. Nice day for the Scalper as well. Bringing up the bottom of the pack... I can simply say, I'm in a world of shit right now.
I'm going to try and set up a ticker much like TradeWhileWorking has over on his site for the VO. Stay tuned...
Thanks to Misstrade, the VO was in the green for $12,281 today. Now if only I could figure out how to get a cut of that...
P&L -$646
Best, TNH $699
Worst, BTU -$733
shares traded, 49,800
total trades, 233
Nothing new to say... I made the same mistakes today that I've been making. Especially with BTU which I bought all morning on the way down. Once it broke the trend line, it went up nicely. So, I didn't listen to the little caveman inside and I paid the price... again.
It's encouraging however that the Virtual Office participants had nice days. That tells me the problem clearly lies within. That means I can fix it.
I'm feeling rather dejected...
So I wrote this down in my notebook this morning... the words I use are getting smaller, the sentences are getting shorter. I'm trying to simplify as much as possible.
Trading, so easy a caveman.... ah, forget it!
No clear trend means no clear buy
No clear buy means no clear sell
I wrote them here now so I don't forget. Perhaps it will help.
(p.s. check out "Fake Empire" by The National (song #20) over on the Forkcast... this is the one I can't stop listening to nowadays)
Trade well, DT
What a great idea for a blog.
For one year, my wife, my 2-year-old daughter, my dog and I, while living in the middle of New York City, are attempting to live without making any net impact on the environment. In other words, no trash, no carbon emissions, no toxins in the water, no elevators, no subway, no products in packaging, no plastics, no air conditioning, no TV, no toilets…
Misstrade, $3070 on 8000 shares traded.
TradeWhileWorking, $1341 on 2600 shares traded.
NYSE Scalper, $300 on 66,600 shares traded.
Evolution Trader, $104 on 54,500 shares traded.
One Bad-Ass Trader, -$137 on 10,800 shares traded.
Me, -$878 on 32,800 shares traded.
So, on the first day of the Virtual Office, Misstrade comes in to takes the cake! Go check out what made him successful today.
The entire VO was into the green for the day at $3800.
I woke up late this morning, threw a half hour of research together after the long weekend and started trading. Not the way to do things.
But you know, it didn't hurt much. I was down a couple hundred dollars all day. Nothing too bloody. No awful trades. But I wasn't paying attention. I was surfing the net. I had a really loose attitude all day. And in the end, I paid the price.
It all started at around 1:40. That's when I realized that CNS was up a point from where I entered. It had trended up nice and easy from where I bought at around 40.07 but I had sold AT MARKET at 40.05 and 40.06 because I was nervous about it. I really had no other good reason. Just that things weren't really going my way, I had no big winners or no big losers and I believed the same would happen with CNS, so I just sold. So at 1:40, when I realized I left a point on the table for no good reason, I was pissed.
Then, a stock I was long, POT, crashed (definitely Freaky Hybrid Trade-Worthy). In a matter of minutes, I went from being down between $100 and $200 to being down $500. I made matters worse by churning POT a few times before he broke lower. Anyway, when he finally did break lower, a little before 2pm, I looked and saw TNH, another fertilizer stock, selling off. I also noticed that AGU and MON were both up... so, with POT and TNH breaking I thought it was only a matter of time before AGU and MON broke too, so I started getting short.
Again, wrong decision.
Interesting, that one poor decision led to a chain reaction of many poor decisions. Definitely something to watch out for.
There are a couple of old sayings that come to mind... one, "Don't throw good money after bad" is nice and clean. Another, more appropriate goes something like "If you shit in bed you only make it worse by trying to kick it out" is much dirtier, but really more to the point. I went down kicking... and as it turns out, screaming.
Once I got squeezed badly in AGU (and of course, I had to throw extra shares onto my position to make up for my losses in the other stocks) and MON I was down close to $1000. At the time, I was kind of shell-shocked... how did this happen? Now, it all seems very clear to me.
I was never on my game today and so I was easily thrown off... not even by losing money at first... just by simply recognizing that there was money to be made and I "missed it". POT just threw fuel on the fire and the rest is history.
If you're going to trade everyday, you need to focus everyday.
Almost forgot the stats:
P&L -$878
Best: MTG, $166
Worst: POT -$324
shares traded: 32,800
total trades: 195
Nothing comes easy here... when it does seem to come easy, it's only because you're prepared.
Well, it has been a long weekend here at the cave. I had big plans too. I was going to get some work done around the house. Update the blog... Instead, on Friday when I was working with my Dad, pulling wallpaper down in one of our bathrooms, my back, for no obvious reason, just went into painful back spasms.
They haven't really quit yet.
So, no "history" post, no updating of the blog... and I apologize. I just couldn't stand to sit at the computer, I spent most of my time laying down. By the way, back spasms are a concept that toddlers simply don't understand. And it's awful because they want you to play and do stuff but you just can't... makes it mentally as well as physically frustrating.
So anyway, it gave me an idea. Perhaps one of the reasons my back is in such poor shape is because I sit here at the comp all day, lurched over like a vulture searching for opportunities. My wife who is very much a yoga/movement person has been telling me for years to "get up and stretch" and stuff like that. So now, I see she is right.
Check out the clip below for easy ways to keep your back healthy even if confined to a chair all day!
Finally, do any of you have an excellent office chair to recommend? I have this crappy one that offers no back support whatsoever that I've been using for years. Time to trash it.
This video is pretty bad, but it's the only one I could find on Youtube so far...
Go Isles!
On Monday, I'll start posting the P&L totals for myself and 4 other bloggers here on my site. I'll be calling these posts the "Virtual Office" posts and eventually, I hope to create a little grid on my site with our numbers and volume totals that will update daily. For now, I'll be posting the totals at around 4:15 each day.
As a trader who worked for a long time in a large office and is now trading alone in a dark, wet cave, I miss the comaraderie of working with other traders. In an office, at the end of the day, there was always that one guy who had a good day. Often, a group of 4 or 5 traders would be surrounding his work area and he'd be sitting there in a chair pointing at graphs and telling the group how he made his money. That's the type of spirit I hope the Virtual Office can engender.
So, for now, you can start checking here on Monday and you'll see the P&L stats of the NYSE Scalper, One Bad-Ass Trader, Evolution Trader and myself all in one handy spot. When you see one of us has had a good day, click on their name and you can go to their site where they'll tell you the full story of their riches.
If you are a trader and are interested in having your totals posted here, just shoot me an email or comment on this post and we can set it up.
UPDATE: Misstrade over at Trading for the Masses will also be joining the VO.
"I'm a digger of holes in a land of holes."
-Wolf Parade, from "Dear Son's & Daughters of Holy Ghosts"
I can't tell you how prepared I was today to take it easy. I said it to myself, I said it to others. I said, "I'm going to take it easy today."
By 9:45 or so I was up a couple hundred bucks and had no positions. I could have taken the rest of the day off and started the long weekend a little early with my confidence intact ahead of the big earnings weeks to follow.
But no. I had to make things interesting.
Not sure how many times you need to "learn" a lesson in the market before you truly "learn" it, as in, you stop making the same bone-headed mistakes. I have no idea how many times I have tried and failed to "anticipate" a bottom in a stock. I know why I do it. I do it because I'm so afraid that once the bottom is in that I'm going to miss the entry. I'm afraid that I'll look back and say, "Oh man, that was such an easy trade to catch. Look how it ripped straight up off that bottom and I missed the whole thing!"
What's worse? Missing a "good trade" or being involved in a "bad trade". The answer is being involved in a bad trade. By a long shot.
Anyway, so I made a lot of mistakes in MON today. I was down over $2500 in the stock by noon. Between noon and 1:30, I built a 3500 share position in the stock as it consolidated. During this consolidation, the stock broke a downtrend line that had been dogging the stock since the afternoon yesterday. The best thing I did today was to NOT sell the stock when it finally started to move in my favor.
I was overjoyed when the stock finally broke upwards at around 1:48. It would have been a mistake for me to sell here even though I desperately wanted to take some profit. Instead, I held and watched as the stock took a quick plunge back to the figure. This time however, instead of breaking the fig which had been acting as resistance for the last 2 hours the stock bounced right back up to 57.17 or so. At that point, I realized that a new sheriff was in town. The bears were gone and the buyers were again in charge. I held on to almost all of my shares and sold out of most of them in the 57.45-57.50 area. I cut my loss in the stock from around $2500 to about $900. Some silver lining, eh?
The main thing I want to take away from this trade is recognizing that if I had just been patient and waited for the stock to break that downtrend line before I began to buy that I still would have made money in the trade. And, I wouldn't have had to contend with all the losses that piled up while I was buying on the way down.
Anyway, here are the damn stats:
P&L -$674
Best: BTU $258
Worst: MON -$896
stocks traded: 8, 3 positive, 5 negative
shares traded: 48,200 (29,000 of these in MON)
Enjoy the vacation day.
I'll work on another "history" post this weekend. Also, by next Monday I hope to have a new feature on this blog.
