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Day Trading Stocks with Discretion
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Day Trading Stocks with Discretion

  #231 (permalink)
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March 07, 2013 - Day 6 on $im

Need to bang out today's entry.

VFC was underperforming the ES. VFC was underperforming the XLY (sector ETF), and ELY was under performing the ES. This should have given me more confidence in my shorts, but I was perpetually concerned with a reversion to the mean. This caused many problems in my trading today (and one benefit). Mostly I let it make me worry about a reversal (and the pullbacks were robust - pullbacks that lasted 30-45 minutes with as many as 9 green consecutive bars.


Trade 1
- short 200, $126
set up: pullback
waited until price+stop encompassed both the channel and EMA21. Got a timely entry. Exited at after price failed to push below yesterday's low. Text book trade.



Trade 2 - long 200, -$2
set up: panic
Here you can see my worry of a strong reversal, but it subsided quickly after price didn't push as quickly as I expected, I scratched out.


Trade 3 - short 200, $32
set up: pullback
A little late. My reversal worries had me looking for a complex pullback, so didn't get in until later.


Error, -$38
Wheels came off the bus on this one. Reversal worries. I was convinced that market was going to bust through the EMA21 this time (the second push). I was short at the time. So I decided to flip (how many times is this a good idea?). But I managed to sell 400 more shares, so I was short 600 shares - rather than 200. I closed everything out quickly - paying a full bid-ask spread. I even managed to calm down and get my short back on. What a disaster.


Trade 4 - short 200, -$9
set up: pullback
Good run down, new low, but eventually reversed back. Had stop at break even but had $9 of slippage.


Trade 5 - long 200, -$32
set up: complex pullback
Was expecting price to hold above the EMA21. 3 channels had been broken. XLY and ES were pushing higher. Didn't pan out. Price then proceeded to break my second bearish target of $162.10 and my third bearish target $161.45. Then, THEN I got my partial reversal for $1.20.


Could have been a great day.

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Day Trading Stocks with Discretion-20130307vfc.png  
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  #232 (permalink)
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March 8, 2013, Day 7 on $im

Only in the market for 15 minutes today. -$86 net

First order of business for the day was a trade error. Wanted to sell. Bought. Cost $22. The mistake was amplified as I paid attention to my thoughts and feelings. I was frustrated because I had tried to enter minutes earlier at a higher price. Price was getting away from me, and so I thought "I will just throw this in there, its low but it doesn't matter." I was giving up on watching price. I did wait 1 tick to see if it was going to continue downward or come back up. But I was out pretty quick.



Trade 1 short 100 shares, -$64
set up: panic
Was afraid of missing another big move down more so that finding a good set up. Even if I had waited, nothing would have come of it - maybe a break even. Of note on this trade slippage was 22 ticks - wow.

So I went back to the T&S to see what happened. My stop was for 100 share set at 162.00 with a "Last" trigger, so once a trade happens at or above the stop, it becomes a market order.

Time Last Sz NBB/NBO sz
7:07:56 161.95 1 161.79/161.94 5x3
7:07:56 161.88 1 161.79/161.95 5x4
then about 93 quotes with no trades
7:08:12 161.90 1 161.80/161.90 6x1
then a 39 quotes with no trades and the market is 161.93/162.07 3x2
7:08:39 162.06 2 161.93/162.06 3x2 I would have expected my stop to activate here and lift the 162.06 offer (repeated 4 times)?
7:08:50 162.06 2 161.93/162.07 4x2 or to get filled on any of these
7:08:50 162.07 1 161.94/162.07 4x3
7:08:50 162.07 1 161.95/162.07 1x3
7:08:50 162.07 1 161.95/162.07 1x1
Then 4 more quotes all 161.95/162.07 3x1 or these
And then the offer jumps to 162.18 for a few quotes then 162.22 still within the 7:08:50 second.


I got filled at 162.22 on BATS at 7:08:50. What was the interactive broker's SMART trade router doing for 11 seconds between 7:08:39 and 7:08:50? Any old timers feel free to chime in and complain how much harder it was back in your day when fills took minutes...

Attached Thumbnails
Day Trading Stocks with Discretion-20130308vfc.png  

Last edited by bijeremiad; March 8th, 2013 at 10:14 PM. Reason: forgot attachment
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  #233 (permalink)
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March 11, 2013 - day 8 on $im


While today was a negative day, I was happy with some of the trades. No blatant errors. Tried something new.

Numbers: 5 trades, 2 scratch, 3 losers. Gross loss -$86; net loss -$98.



Trade 1 - short 100 shares, -$47
set up: pullback
doesn't really look like it in retrospect. Was intended to be a pullback and a test of yesterday's low. I did wait until my stop encompassed the recent swing high. If it had worked, it would have looked really nice. It was an early entry. Mixed feelings about this trade.



Trade 2 - short 200 shares x 2, -$4

This trade had two legs. The first was a test of prior day's S/R. I got in so that my $0.20 stop would be wide of the recent highs put in during the test. Then once the trade was $0.20 in my favor, I felt price action was supportive of my trade so I moved to break even and pressed the trade with another $40 of risk. This was my first attempt of pressing a winner. I was generally happy with how it played out - even though it was not successful.



Trade 3 - long 200 shares -$1
set up - test of yesterday's low
when I saw yesterday's low hold twice, I entered when price was crossing above the EMA21. Entry price allowed me to put my stop close to yesterday's low. I was a few pennies late. Once price neared the recent swing high around $162, I moved to break even. Taken out.



Trade 4
set up - test of $162
Price was not going above $162. There were no buyers. Ask was fishing and bids held firm, no one wanted to run higher. So I shorted. I can't explain my exit. I spent some time up near 162. The offer kept fishing above $162. ES and XLY were breaking higher highs, so I panicked depsite VFC being weaker than both.



Trade 5
set up - break out
I was looking for a breakout. ES and XLY were making higher highs and taking out yesterday's high. I thought VFC would follow. Price looked to be bouncing off the EMA21. I thought the purple channel would hold. I stepped away from the desk. The market was so slow. I knew it when I jumped out of Trade 4 - I was in a trading range. I wish I had behaved like it. Stop was hit in my absence.

Market ground sideways for the rest of the day.

Attached Thumbnails
Day Trading Stocks with Discretion-20130311vfc.png  

Last edited by bijeremiad; March 12th, 2013 at 12:01 AM. Reason: forgot attachment
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  #234 (permalink)
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March 12, 2013, Day 9 on $im

1 winner, 1scratch 3 losers. Gross -60, net -$70.

No boxes on the trades today, sorry.

Trade 1 felt the best, was a test off of an intraday channel. Wish I had focued on price putting in two higher lows - suggesting an upward biased market. We eventually broke out of the four-day range down today.

Trade 2 was a pullback, also expecting the down trend to hold, as well as the four-day trend to hold. Stopped out pretty happy with this trade, even for a loss.

Trade 3 was panic induced. Chasing a break out. Should have been a scratch.

Trade 4 was a scratch. Was also counter trend and trying to pick a top. Managed ok. I continue to be disappointed with IB's fills on stops. I really need to be watching these when they hit. This isn't a matter of micro seconds - its seconds. Humans could execute stops better.

Trade 5 was unecessary and possibly against my rules. I shut down after two full-stop losses. I only had 1, but I also had a $35 loss (88%).

I thought about buying "a flyer" and finally riding up the uptrend I had been fighting all day. Glad I did not - I knew it could have put me over my daily loss limit (and it would have).

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  #235 (permalink)
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March 13, 2013, Day 10 on $im

Great opportunity day. Nothing to show for it but unnecessary losses. Gross $144, Net -$148. 2 Losers.

I will try a different format for my trade entries.

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Three problems today.

1) chasing a spike. I thought about waiting for the pullback, but I let my homework and expectations run away with me. I thought it was going to be an up day, and didn't want to miss it. Let myself get dragged into a down draft.

2) Then with a $71 loss, I decided to put on another trade. I only had $10-20 of room, but I put on another trade with $40 loss?

3) Another stop not activated. It was set up but not activated with the trade. I should have hit my stop 6 minutes into the trade. I was frustrated and thought about shutting down my machine (would have done well). But I looked back and realized that the "ding" I heard was confirmation of exiting. Nope. So by the time I realized it, price looked to be bottoming. I set a $0.09 stop, activated and watched. It pulled back.


So I have realized long ago that my chat window for work uses the same "ding" as IB. I need to change that. Usually I get a pang of fear because I am working on something and a chat makes me think I was stopped out. So I need to change the confirmation sound on IB. I also need to develop the habit of visually checking positions.

I also need to write down my money, risk, and trade management rules. They are floating around, but need to be explicit and reviewed regularly.

Attached Thumbnails
Day Trading Stocks with Discretion-20130313vfc.png  

Last edited by bijeremiad; March 14th, 2013 at 12:03 PM. Reason: changed day count in title
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  #236 (permalink)
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VinceVirgil View Post
Hello bijeremiad,

I started with 5 minute charts because of Al Brooks. ... And the 800 tick because of Mack using the 2000 tick on the ES.

@VinceVirgil, actually Al Brooks would approve of your use of the 800-tick chart. He uses the 5m chart because it provides 12 bars per hour which is the number of bars he deems necessary to read price action. If you count the number of 800-tick bars in an hour on the CL during RTH, it is often 12 or very close to it as well.

ETA: In fact, that's the reason I thought you used the 800-tick chart.

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  #237 (permalink)
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plethora View Post
@VinceVirgil, actually Al Brooks would approve of your use of the 800-tick chart. He uses the 5m chart because it provides 12 bars per hour which is the number of bars he deems necessary to read price action. If you count the number of 800-tick bars in an hour on the CL during RTH, it is often 12 or very close to it as well.

ETA: In fact, that's the reason I thought you used the 800-tick chart.

Great memory. I mentioned that a number of months ago.

That is correct. The initital reason was to replicate the numbers of bars on a tick chart that most closely mimic the 5 mniute chart, give or take, and It is in fact the the 800 tick on the CL. I also wanted the chart bars to fit on the screen for the RTH. If I look at any other instruments, I use the same criteria...the tick volume that most closely resembles the 5 minutes on the RTH. I should add this is primarily for day trading.

I looked at the tick chart because of Mack, as he often mentioned the volume and momentum element on the tick charts.

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  #238 (permalink)
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bijeremiad View Post
Great opportunity day. Nothing to show for it but unnecessary losses. Gross $144, Net -$148. 2 Losers.

I will try a different format for my trade entries.

Please register on futures.io to view futures trading content such as post attachment(s), image(s), and screenshot(s).


Three problems today.

1) chasing a spike. I thought about waiting for the pullback, but I let my homework and expectations run away with me. I thought it was going to be an up day, and didn't want to miss it. Let myself get dragged into a down draft.

2) Then with a $71 loss, I decided to put on another trade. I only had $10-20 of room, but I put on another trade with $40 loss?

3) Another stop not activated. It was set up but not activated with the trade. I should have hit my stop 6 minutes into the trade. I was frustrated and thought about shutting down my machine (would have done well). But I looked back and realized that the "ding" I heard was confirmation of exiting. Nope. So by the time I realized it, price looked to be bottoming. I set a $0.09 stop, activated and watched. It pulled back.


So I have realized long ago that my chat window for work uses the same "ding" as IB. I need to change that. Usually I get a pang of fear because I am working on something and a chat makes me think I was stopped out. So I need to change the confirmation sound on IB. I also need to develop the habit of visually checking positions.

I also need to write down my money, risk, and trade management rules. They are floating around, but need to be explicit and reviewed regularly.

Did you make up the entry exit sheets yourself? Or are they an off the self item. Very cool. They look like a souped up trade ticket for what I used to send to the cage to buy and sell stocks.

Its a great idea. Is there a template available for this somewhere?

Money risk and trade management rules should become second nature. What I find is helpful, is having modified rules to fit the market parameters. For instance, on a very range type day, i would be inclined to trade smaller sidze with a wider target so as to not be taken out on noise. Or, increase size when I am confident of the trade idea.

Suri Dudella mentioned this on his webinar a few days ago in passing, about having a 1x, 2x, 3x trade posotion depending on the market strucure or his conficdence level of the trade . Likewize Matt Davio. He breaks it down to in poercentages...from 10 to 100 percent based on the isntrument. He mentiones he seldom gets to 80%.

Its the comcept of managing risk with position sizing.

VV

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  #239 (permalink)
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VinceVirgil View Post
Did you make up the entry exit sheets yourself? Or are they an off the self item. Very cool. They look like a souped up trade ticket for what I used to send to the cage to buy and sell stocks.

Its a great idea. Is there a template available for this somewhere?

@VinceVirgil, I made it in excel (copy attached). it is an amalgamation of various sources: Ninjatrader, Peter Brandt, FuturesTrader71, , and VanTharp. I did look at a few old triplicate order tickets when trying to figure out how to design it. It has changed a little from what you see above. The fields are self-explanatory to me (and I imagine you have seen them all yourself). If others have questions, I can take time to explain what they are and what I hope to get out of them.

I am working on incorporating it into my trade journal where each trade is a row in excel. Its a little unwieldy, with almost 50 data fields and 5 fields for notes. I have some excel kluges that reduce the number of hand entered fields is "only" 13, with others downloaded or linked to downloaded data. We'll see.

I am finding the half-page format cramped, and I may expand that to a full page per trade. Then I could add a few things like a screen shot, scale in/scale out data, and price target+risk/reward numbers. But many of those don't apply to the system I am working on right now, so no rush on my side.

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  #240 (permalink)
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VinceVirgil View Post
Money risk and trade management rules should become second nature. What I find is helpful, is having modified rules to fit the market parameters. For instance, on a very range type day, i would be inclined to trade smaller sidze with a wider target so as to not be taken out on noise. Or, increase size when I am confident of the trade idea.

Suri Dudella mentioned this on his webinar a few days ago in passing, about having a 1x, 2x, 3x trade posotion depending on the market strucure or his conficdence level of the trade . Likewize Matt Davio. He breaks it down to in poercentages...from 10 to 100 percent based on the isntrument. He mentiones he seldom gets to 80%.

Its the concept of managing risk with position sizing.

VV

@VinceVirgil, I remember watching a video on SMB Capital's blog, where a training trader and more experienced trader were reviewing trades. The senior trader was encouraging the trainee to risk more capital when he saw set ups where he could express a high level of conviction, which would suggest risking 35% (might have been 30%, maybe 33%) of your daily stop loss amount on that trade.

They didn't delineate what risk allocation would be for lower conviction scenarios, but I inferred that if you flubbed two (maybe three) high conviction set ups you were done for the day. It would also suggest that for a "typical" trade you would probably be risking half to a third of a high conviction set up, or 10-15%, suggesting 6-10 losses before stopping out for the day.

Again, all along the lines of what you indicate - changing risk allocation depending on the situation you perceive.

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