$200.00/day trader chronicles - Thursday 11Dec08 (Day 1)

[vleon1012]

$200.00/day trader chronicles - Weds 07Jan08

Today was my first day back as I am still very busy w/ my real job and don't have much time for trading. Limiting my trading from 9:30 - 10:30 until my schedule lightens up. I was going to trade on paper, but then decided to trade live and I'm glad I did as I cleared $251 in 30 minutes. But really, it wasn't 30 minutes. I got up @ 6:30 to catch up on news, review charts, review futures, create my watch list, scale down my watch list, etc.

Hopefully today's gains can be repeatable as I did a fair amount of fine-tuning on entries and exits, but I know I can do more.

I'm almost scared about tomorrow because today was better than I had expected!... But you can't have fear because fear delays your positions and costs you in the end.

I'm sure I left a lot of money on the table but it's the best I could do with the small amount of time I have this and next week.

**** EDIT - The reason for entry on the MO play is:
07:30 MO Price Target lowered to $24 from $27 at BofA/Merrill Lynch, maintains buy rating

It did not go up as expected so I cut my losses quickly (I think). ****

There is a little delay in IB's trade confirmations page so some of the trades might not make sense -- but in the end I basically traded in 200 lot shares.

 

[vleon1012]

Very nice thread.

I was looking at your excel file and it seems to me that there is a lot of homework to do every day with this method. You got me impressed with all this work you do. Congratulations.

It is a lot of work and is just a different style. Some people trade primarily on Fundamentals, others primarily on Technicals, my style is more News oriented with some Technicals (Pivots & EMAs & 30 days price action).

The thing is to build news items that appear to have a high-probability of success, and then trade them properly. Like TA or Fundamentals, it doesn't always work but that's when you have to have your stops. That's what I'm working on. Oh yes, and selling into strength instead of weakness.

 

[simba00000]

Good for you bro. Aside the studying, I am learning something everyday in the markets. I am tracking this thread, your progress will be interesting.

Chris

 

[vleon1012]

Yes every day I learn like 10 new things and then I have to figure out what's useful for me. IMO, it would be impossible to trade if you try to apply every indicator, every TA pattern, news item, time frame, etc. That's where experience, finding your style, what works for you quickly and simply, and back testing comes in.

Good luck! I'm still learning, a newbie, and I'm sure I'll get smacked around this year as my first full year of trading.

 

[vleon1012]

Today I am fortunate and pleased to post my first consecutive day of profitability.

I did the same routine again this morning: Woke up at 6:30, reviewed the news from 14:01 yesterday to 9:00 AM this morning, checked the charts, and filtered my watch list. Overall my execution was improved except for my BLUD trade, where I entered a little late and sold too early as it's now ticking higher than my entry -- but I did honor my stop which probably could have been smaller as well

It's a learning process. But what really pleases is my is my overall analysis appears to be correct for the time-frame I trade in AND that I continue to learn from my mistakes AND that I actually profited from the research and application.

For now, I am going to focus on the 9:30 - 10:30 time frame trading the news items that continue to prove themselves to me. When I feel I am getting confident and competent in this time frame + entries / exits / stops then I will adding on dips during a trend, etc. But that will be a while as I need to let my winners run a little bit more. I just get so excited when I see around over $50.00 profit in a trade in 5 minutes, I exit when I know there could be more. But then I think about the fact that I need to be done by 11:00ish. So for me, the market closes @ 11:00 AM.

Today's profit was $294.92. I am strongly considering taking tomorrow off and call it a successful week, maybe paper trade tomorrow for practice, and refine for Monday. If I make gains on paper only tomorrow, it will still confirm my strategy. Also, I've been suggested to avoid trading on Fridays. A friend of mine who is much better than I am told me that sometimes it's ok to take a day off after some good gains.

One interesthing thing I noticed today that I'm sure the pros know -- when a pivot point aligns with a 20,50,or 200 EMA it can be a VERY VERY strong support/resistance point depending on the price action. For example, there was a gap up today that I thought was going to fill but then it just spiked and then I realized that the 200 EMA was aligned with it - causing a strong spike. At that point, I knew it was time to go long. It's an example of the news and TA basics coming together for a strong confirmation. It also encourages me to stick to and refine my methods.

Another thing I noticed, I think trading less instruments is helping. Looking back a week or two ago, I feel like I was all over the place.

Again, I traded in 200 lot shares except for AMTD where I went with 250. I should have done 400 but I don't have the stomach for that yet. 200 is good for now.

Thanks again for your comments regarding stops, exits, and volatility as they've forced to re-evaluate and refine.

 

[vleon1012]

I decided to sleep in and take today off. I'll likely be taking Fridays off as the trading week is kinda stressful. Also, my paper account is only 10k and I need to reset it after holding futures long for the past week or so -- so the only trade I made today as a goof was longing the ES futures 1 contract based on positive news that was released @ 10:00 AM and already up 2 points. The futures are not a priority for me, but I will take the time at some point to backtest news that I can long/short the futures on. It's most likely macro data like this so it will be an occassional trade. But hey I'll take a free $100.00 any day.

Today's positive news for the futures was:
10:00 *NOV WHOLESALE INVENTORIES: -0.6% V -0.7%E
- prior revised from -1.1% to -1.2%

So they were expecting inventories to be down negative 0.7 percent and it was actually down -0.6 percent and it's considered good news by the market hence the 2-3 points I got out of this news.

It was good enough for a quick 2 points and climbing also happening to coincide with a V-bottom that occurred @ support a few minutes before (when the smart money found out). My goodness, this thing is climbing and while I wish I had done it on my real account - I haven't done nearly enough back testing on the futures to even bother.

Of course, there was a huge downtrend today because of lost jobs so the above 2 or points was probably just a blip in a downtrend. But it's still $100.00

Seeyaz Monday and enjoy the weekend. Looking forward to refining refining refining.

 

[simba00000]

Good job on your consecutive day of profitability! I am curious, how much is each individual trade commission or round trip costing you?

Chris

 

[vleon1012]

Good job on your consecutive day of profitability! I am curious, how much is each individual trade commission or round trip costing you?

Chris

Thanks - My commissions are $2.00 - $4.00 round trip, generally $2.00. (Interactive Brokers)

I think I can do less trades, Monday I will go for a max of 3 and see if it helps. Maybe less is more.

 

[simba00000]

Wow, that sounds really inexpensive. I pay $9.99 per trade, $19.98 round trip through Etrade! And that is assuming I do not pyramid or do partial exits. But then it also includes streaming realtime data, extremely quick executions and a platform I like using.

It seems for me handling two positions at a time I am quick and can properly manage a fast moving trade. In time this probably will change. I tried managing 5 trades at once and could not. Thanks for sharing and good luck Monday!

Chris

 

[vleon1012]

Wow, that sounds really inexpensive. I pay $9.99 per trade, $19.98 round trip through Etrade! And that is assuming I do not pyramid or do partial exits. But then it also includes streaming realtime data, extremely quick executions and a platform I like using.

It seems for me handling two positions at a time I am quick and can properly manage a fast moving trade. In time this probably will change. I tried managing 5 trades at once and could not. Thanks for sharing and good luck Monday!

Chris

Monitoring more than two trades is also a challenge. Sometimes I focus on one that is really winning or losing and then I forget the rest for a few moments. I spent a fair amount of time optimizing my setup today to increase my execution speed and minimize errors. So now when I do an order ticket, it already has a default number of 200 shares AND is LMT instead of MKT. So now I can just click on the Ask/Bid and it populates the LMT field and I adjust it.

One thing I did is, I only have a laptop screen and an external monitor. What I did is in MSPAINT is I just created a picture (drawing two intersecting lines) that is now my desktop photo on both monitors and it splits my screens into 4 (almost) equal squares. I put my charts in those squares nicely instead of randomly.

A bunch of other stuff too... So use your platform as best as you can... make the most of your setup to keep it neat and efficient.

GOod luck!

 

[vleon1012]

A work in progress... will constantly be refined...

AM Trade Preparation​

I. 06:30 – 08:30
1) Review ES futures and macro news from overnight to determine if gap down / gap up / bearish / bullish
2) Search news items previous day 14:01 to 09:00 current day

• Price Target Raised / Increased / Reduced / Lowered
• Guidance / Guides
• Acquire / Acquisition
• SSS +/-​

3) Check to see if supporting or conflicting news for above
4) Review price action compared to news
5) Determine anticipated price action (up / down)

II. 08:30 – 09:15
6) Select top 4-6 trade candidates
7) Determine pivot points on paper for top candidates
8) Continue to scan news for potential replacement / addition
9) Prepare order tickets based on price action bias
10) Bring up the charts in ready to trade form

III. 09:15 – 09:30
11) Are you sure these are the trades you want to do?
12) Strongly justify potential replacements / additions
13) Have the charts up and ready for above
14) Stops .20 to .40

IV. 09:30 – 11:00
15) Watch price action on 1st bars compared to EMAs and Pivots. Converging EMAs and Pivots for strong supp/resistance?
16) Gap fill?? Heavy selling?? Heavy Buying??
17) Take your profits into strength even if leaving some on table

Market Hours Trading​

1) Consider trades for following:

• Rumor / Chatter on acquisition
• XYZ company loses/wins on significant on a court ruling (i.e. RMBS)
• FDA approves drug on a stock trading over $10.00​

2) Note time of day of news release compared w/ usual market ebb and flow time-frames. Also, news might be priced in if it’s released after 2:00 PM.
3) Is the news supporting or negating the 09:30 – 10:15 gap fill?
4) Is the news with or against the primary trend?
5) If news against primary trend and appears to not have been priced in, will primary trend discount news?
6) If the news is with the primary trend, does it already appear priced in?
7) Is the news conflicting previous news?
8) Is the news being released while consolidating right around a Pivot / EMA?
9) Stops .15 to .25

 

[mray]

This is an awesome thread. I was dissappointed when I realized I reached the last page of the thread, I want more =)

With that said, it seems your strategy is heavily dependant on trading the news without much technical analysis. I never thought this could work very well. You seem to be doing fine though and I look forward to reading your post Monday. Do well!

 

[vleon1012]

Thanks for your comments. There is probably more TA involved than I am actually indicating as I am slowly becoming influenced by some of it, but my style is primarily news-driven supported by TA basics.

For me, the most important things from TA in the time-frame that I trade in are Gap Ups / Downs, Pivot Points and sub-Pivots (midway points), 20,50,200 EMAs, and Volume.

Over the past 2 weeks, I've also started to respect the potential of other TA elements like rising / falling wedges and the potential for a double top and double bottom intraday. There are too many TA formations for me to consider at this time, but I know many people way more experienced than me follow them and do well with them. I've read about so many indicators, envelopes, etc etc.

The thing with many of the formations is that if I squint hard enough, I can force myself to see it and thus don't trust my judgement to say this is a true "inverted head and shoulders pattern with a rising slope". I am just not there yet in terms of pattern recognition. BUT with that said, I have to have to give respect to the TAs out there.

Perhaps the most important thing is the timing, confidence, and execution. I sometimes make good calls but execute them horribly. That's one of those things that will work themselves w/ time I am sure and over-time I think I can develop a method that will work for me.
I don't think I'm overtly profitable yet, I might be up a few hundred bucks. I started w/ 25k, then felt it wasn't high enough and pumped it up by like 1,500.

This week will be interesting. I am going to try to reduce my trades to around 3-4 and see if I can monitor them better and let them ride longer and trade only my top 3 news items.

 

[vleon1012]

No trades today as I woke up @ around 10:30 AM after a long night of partying at a friend's birthday. I was supposed to leave by 12 AM, but 12 AM quickly became midnight, followed by 2 AM, followed by 4 AM!

Definitely will be trading and posting tomorrow, Weds, and Thurs.

 

[vleon1012]

I didn't get a chance to post yesterday but there really wasn't anything to post until today as I held some positions overnight.

Also, I've been slammed with work for January AND next week I am going to make a temporary move to either in AZ or HI. My g/f works in healthcare and she's a traveler. I usually go with her if it's warm -- and they pay for housing!!

So my actual trading is going to be light for the next couple of weeks BUT my research will continue to be intensive. I'm considering switching to paper to see how I would do under this week's market conditions as there is a lot of negativity.

Here is my activity for the past two days (Tues 13Jan09 and Weds 14Jan09), for a profit of $426.07. Because of today's negativity, I'm sure I left a lot on the table with the shorts but I need to move on with my day. To clear $400.00+ in two days trading P/T is good enough for me... for now.

Because I held overnight, the trade confirmations don't match the buy and sell so here are the screenshots for the trades followed by my usual spreadsheet.

Overall, I had a few small gainers due to bad timing on my entries but had a couple of home runs. The news is the catalyst but the execution provides profit!

 

[vleon1012]

Taking a couple of days off after a nice string to refine / modify my trading style a bit.

Paper trading real-time news audio/text-alerts appears to be more successful with less analysis than trading post/pre-market news. It's very interesting, and the less analysis/indicators/market breadth I need to use the better.

For example:

01/15/ 9:52 CRM Hearing renewed takeover chatter circulating
- GOOG rumored as potential acquirer (related GOOG MSFT ORCL )

- Price action @ time of news 9:52 was (median) $27.55
- Price action @ 9:54 was 27.78
- A conservative long of 200-400 shares @ release = 0.28 * 200 = $56.00 - $112.00
- On my paper trade account, using my live account amount on margin, I longed 1K shares for a profit of $560
- Of course, profit could be between $400 - $560 depending on your entries, but that's pretty damn good and barely any analysis needed
- Note: It is noteworthy that the SP500 was bear-flagging during tankage @ 9:52


In order to do this, I am practicing trading on a 5-10 second chart as this is how fast a news release can affect price action. Of course, pivots, EMAs, and trendlines remain important.

Interesting... Will definitely have interesting updates next week.

 

[timsk]

Taking a couple of days off after a nice string to refine / modify my trading style a bit.

Paper trading real-time news audio/text-alerts appears to be more successful with less analysis than trading post/pre-market news. It's very interesting, and the less analysis/indicators/market breadth I need to use the better.

In order to do this, I am practicing trading on a 5-10 second chart as this is how fast a news release can affect price action. Of course, pivots, EMAs, and trendlines remain important.

Hi vleon,
I'm a bit surprised to read this - assuming I've understood you correctly. You appear to want to shift gears to trading live news on 5-10 second (tick?) charts? The potential reward may increase, but so too does the risk. It strikes me that perhaps your prone to making a mistake that I tend to make which is to continually tweak a strategy to make it better. It seemed as if you were making real progress trading the markets reaction to the news, but now you want to trade the news itself. My view is (and it is just that - my view) trading live news is the sole preserve of the big boys with deep pockets, state of the art kit and the fastest of fastest feeds etc. It's not a game for us retail traders working from home with a standard broadband connection. Also, I would have thought that ema's and trendlines etc. are pretty meaningless in this timeframe as there isn't the time to read, react and trade them.
Good luck anyway!
Tim.

 

[vleon1012]

Greets...! I've been tooo busy with work to trade. Am actually pulling an all-nighter setting up a new Certification environment. Will likely not be able to trade until next or the following week. It's a shame due to the volatility, but if I don't have time to do the research and focus -- then I'll just keep my power dry.

Friend of mine told me that not losing money is like making money in this market. Penny saved is a penny earned.

 

[spage]

nice to hear about the emotional aspects so that I can re evaluate my own style.- now its time to write that mechanical trading system, already have java driving me insane due to the IB api.

 

[maxima]

Hey Leon what is the end of this story?

Can you please tell what news feed did you use? I cant believe IB news are the same real-time as the MMs have... What is the trick?