HAVE NO EXPECTATIONS!

I have been trying to think about what went wrong today.  I chose my setups. I was patient with my entries. I paid attention to support/resistance levels.  I did not chase.  Yet, I ended up down 1.25% today.  I quit the day early and went to the gym to clear my mind. This is what I came up with.

•  Just because I choose the right setups, does not mean that they will go in my direction
• Position sizing, position sizing. My positions are too large for my present consistency level
• I am getting greedy, and not taking profits as soon as the market makes them available
• A break of the high of day is not a garantee

First trade was ROYL. Nice continuation gap, waited for the retracement and entered on break of HOD.  It quickly retraced, and I sold at the bottom.  I had a specific number in mind for my risk ($.20), which was just above the open price. Double position.  I was too gun shy to re-enter the trade on the nice flag that formed once it retraced, just before it B/O

STX was my second trade.  Found support @ $16.00, and entered triangle in anticipation of B/O.  Did not take any profit, and exited the trade at B/E when it was apparent that the volume was not supporting further upside

SHZ was a bounce play.  It was finding bounce support @ $6.20.  Entered @ $6.21 but there was no momentum/volume in the move that came.  Exited @ 6.18

AAU - entry @ 4.81 with $0.10 risk.  Did not take profit on the immediate spike, stopped out. GREEDY

BLTI is the only profitable trade today.  Broke the HOD, took some profit quickly and stopped out above entry.

Trades

First trade was HILL, a kicker with good premarket volume (25% of daily average volume).  I rushed the entry and did not wait for a higher high / retracement.  Entry was on first candle with an initial target of PM high of $3.56, and risk of $0.20.  Stopped out @ $3.0001.  Second entry was on break of initial HOD @ $3.28, with a $0.10 risk and same target.  Stopped out @ $3.18

Second trade was BLTI.  I waited for confirmation of a break of \HOD with an entry @ 5.2955.  Risk was LOD and initial target new 52 week high, but the trade kept running and sold 1/4 @ $5.49 and 1/4 @ $5.824.  Held 1/2 of position overnight. 

Traded HL based on the Silver and Gold momentum.  Entered on break of  HOD, but the trade did not have any follow through.  Risk was LOD with initial target of $10.

Traded AMSC.  This stock dropped more than 40% overnight and after breaking lows, broke out of a triangle.  Waited for a break of daily high of $13.50, but entered late @ $13.71.  Did not give the trade enough room to move (position size to large) and only focused on pre-market high of $15.74.  Stopped @ $13.61 and missed a very nice move to target.

Momentum trade CXZ, coming up to 200 and 20 day SMA.  Held entire position overnight - good close and huge volume.

Trading Psychology: The 16 Truths About Great Trading

Trading Psychology: The 16 Truths About Great Trading

By Dr. Doug Hirschhorn

1) 45-55% (Average winning % of any given trader) 

2) Traders do not mind losing money, they mind losing money doing stupid things

3) You can lose money on a Great trade

4) Focus on the Trade, Not the Money

5) Trading is a game of Probabilities, not Perfection

6) Trade to make money, not to be right

7) Nicht Spielen Zum Spass (if it doesn’t make sense, don’t do it)

8) The market does not know how much you are up or down, so don’t trade that way 

(Think: “If I had no trade on right now, what would I do”)

9) Learn to endure the pain of your gains

10) There is no ideal trader personality type

11) Fear and Fear drive the markets, not fear and greed

12) Keep it simple: Up-Down-Sideways

13) Make sure the size of your bet matches the level conviction you have in it

(No Edge, No Trade; Small Edge, Small Trade; Big Edge, Big Trade)

14) Making money is easy, keeping it is hard

15) H + W + P = E

a. (Hoping + Wishing + Praying = Exit the Trade!)

16) Trading is NOT like sports

a. Before an athlete takes a shot, he or she is NOT supposed to think, “What if I mess up this shot?” ; In trading that is called “risk management”

b. In sports, when you miss a shot, you don’t lose points

c. In sports, the opponent adjusts to what YOU do; In trading, the market does not know or care about YOU

d. In sports, you focus on improving weaknesses; In trading, your strengths are your weaknesses and vice-versa

e. In sports if you get poor results, you need to practice harder, put in more effort; In trading, effort is not positively correlated to improved performanc

Staying Positive

From Trader Stewie and the Art of Trading

YOU NEED TO BE CONSTANTLY WATCHING YOURSELF, your body language, your tone of voice, your attitude and you need to quickly adjust any behavior that's hurting you(over trading, anger, revenge trading, trading with huge size etc). You need to be your own therapist, mental coach and motivator. You need to be hungry to win everyday even if winning means not trading. You need to be ALWAYS seeking to improve yourself, learning, adjusting your attitude, minimizing your ego and maximizing your drive to be better than the day before. Don't worry about the money, when you are trading well the money will find you, trust me. Take most care of your account when you are losing because the winning trades are waiting just around the corner but they are waiting for you to adjust yourself first.

Prioritizing Trades

I have trouble choosing which tickers to focus on in the mornings.   I have up to 30 setups to track sometimes, and end up missing moves because of it.  John was nice enough to put together a nice diagram explaining the highest probability / best setups to focus on.

Trader's Mindset

Quite often that dragon of failure is really chasing you off the wrong road and on to the right one.
-Paul Tudor Jones

March has been an incredibly difficult month. I started the month with my worst ever trading day, and have been trying to climb out of a murderhole since. I would have a few small positive days, followed by a big down day. As I finished last week, I was in the midst of a 5 day losing streak (9 consecutive losing trades) and an even bigger hole. I began to realize that I was violating my plan. I was trying to hit homeruns to make up for my losses. I was not taking profits, and small winners were turning into losers. I started doubting my edge and my plan.   I even started doubting my ability to trade.
Something wasn't working properly. I decided to read "Trading In The Zone"again, and things started to make sense. I am really focusing on building a Trader's mindset. I thought I had a trader's mindset, but am realizing that I have alot of work to do before I get there. This week, I decided to focus on a few principles to help me operate with a trader's mindset:


1. Anything can happen in the market

2. I don't need to know what''s going to happen next in order to make money

3. There is a random distribution of wins and losses for any given edge

4. An edge is nothing more than an indication of a higher porbability for one outcome over another

5. Every moment in the market is unique


Don't expect anything from the market. Take the information generated by the market, and act upon it.  Don't try to predict what's going to happen next.

In order to be successful as a trader, you must be consistent. In order to become a consistent trader, I must:

1. Objectively define my edges

2. Predefine the risk of every trade

3. Completely accept the risk of every trade, or let go of the trade

4. Act on my edges without hesitation

5. Have a plan to take profits, pay myself as the market makes money available to me

6. Continually monitor my susceptibility for making errors

7. I understand the absolute necessity of these principles of consistent success, and therefore, I never violate them


The result was my biggest gaining day ever, over $3K.  This was achieved by planning my trades, and trading my plan.

I did make a few mistakes in the afternoon, as I hesitated on a few trades that were part of my trading plan (would have been good winners), but overall, I executed much better today.

The biggest difference was defining my risk prior to entering every trade, based on support levels, and not having an arbitrary stop. My position sizing is also a little smaller, which seems to be working better for me right now.

There will be good and bad days.  There will be great and horrible days.  I have to learn to accept whatever the market offers for what it is.  Tomorrow is always new day.