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Day Trading Stocks with Discretion
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Day Trading Stocks with Discretion

  #1 (permalink)
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Day Trading Stocks with Discretion

I will be trading US equities: discretionary on a 3-minute chart, but using a 30-min to identify support/resistance. I will be looking for pullbacks in trends, rejection of S/R, or break outs of S/R. I have a frustrating tendency to seek counter-trend trades, as you will see.

Here are a few rules to start:
  • No more than 0.5% of capital at risk on any trade ($100 max, but so far it has been $20-50)
  • Trading for the day stops at a loss of 0.75% capital loss
Suggestions and questions welcome. I have many myself. I will post today's results later tonight.

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Quick Summary
Quick Summary Post

This journal currently has 6 sections. (so far)

Section 1 (posts 1-35) documents live trades of March 2012 and compares them to live trades in February 2012. A summary post towards the end can be found here.

Section 2 (posts 36-44) documents paper trades where I printed up 210 charts for six stocks and focused on trading price action on just those names. A summary at the end explains how those results turned out.

Section 3 (posts 45-206) documents my focus on 1 single stock, VFC, and marking entries and exits real time.

Section 4 (posts 207-218) has several pages of trade analysis for the 383 trades taken in Section 3.

Section 5 (posts 219-286) document trades taken on a simulator which adds keeping my bids/asks straight as well as introducing platform interaction and slippage.

Section 6 (posts 286-) shows the post trade analysis of Section 5.


Last edited by bijeremiad; February 1st, 2014 at 03:43 PM.
 
  #3 (permalink)
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February headline numbers


I have been using tradervue.com to track some statistics on my trades in February. Here are some headline numbers from last month that I will try to be improving on:

Net: $820.79 = Gain of 2,461.24 less a loss of 1,640.45 (profit factor of 1.5)
45 Winners, 45 Losers, so 50% win/loss
Average win $54.69, average loss $36.45 W/L ratio: 1.50

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Thanks: 283 given, 325 received

March 1, 2012

Net: $199.8 from gain of $286.20 less loss of $86.40; profit factor 3.3
5 winners, 3 losers; 62.5% win ratio
Average win $57.24, average loss $28.8; W/L ratio of 2.0

Traded two stocks today: APA and V


APA
Trade 1 | Had a sell stop set up at $108.92 and was waiting to see how APA would behave as it approched resistance of $109.30, which had been rejected about 20 minutes into the session. Was a little surprised to get hit. Protective stop was about $109.25. Took some heat, but was lucky and it played through. Trailed stop down manually from there. Risk: $38, Reward: $66.

Trade 2 | Was getting set up for a buy stop around $108.25, as what could be a double bottom not far from $108 support. Protective stop at 108.10, 3 lots. Had to chase it a little to get a fill at $108.30, also took a second to drop order to 200 shares from 300 because risk was increasing as price went up. Sold half at $108.51. In retrospect seems like a pretty bullish run up, but when I saw the previous bar top out at $108.60 - exactly where it had stalled about 40 min earlier, I got rid of half and moved remaining stop to just under break even. After I hit $0.40 of profit on the remaining lot, I rode the stop pretty close and got hit on the first retrace. Risk: $40, Reward $61.

Trade 3 | This was more a series of trades - 4 in fact. For the first 3, I was trying to catch the failure to break resistance off of $109.25-109.30. So three shorts where I scratched for B/E. Then around 2PM I got the sense that I was fighting the wrong trend. And if APA was able to break resistance (it was grinding ever so slightly higher highs and higher lows) there was nothing but open space for about $1. So trade 4, I get long at a mediocre price. I received 3 warnings that things were not going my way, but I got this idea in my head that the big boys were going to come back from lunch, flush out the weak longs by taking APA lower, and then rocket upwards to $110.50. Held it all the way to what I thought was a wide stop. Risk $120 over 4 trades for a net loss of $40.

Trade 4 | Scratch trade, not going to post. I did chase the entry more than I would have liked. But I have been running into trouble getting set up of my entry and protective stop. Seems like as soon as I start to see an interesting situation, it moves pretty quickly and I have to scramble to get everything set up. need to be ready beforehand.


V
Trade 1 | This was an underwhelming entry; although, had I gotten in any earlier, I probably would have been stopped out after moving my stop to B/E. Anyway, trailed stop manually. Once V was at 118.60, not far from support of $118.50, I was ratcheting the stop tighter after each doji bar that closed. Risk: $30, Reward $50.20.

Trade 2 | One scratch trade, one fat-finger trader where my stop was set such that the trade closed immediately after it was placed. This happens more than it should. The short was not going to work out. I was looking for a continuation of the down trend... meanwhile the market had already formed bottom.

Trade 3 | I really wanted the market to go down. Lost $46 nursing that belief.

Trade 4 | Finally accepted the notion of a rising market. $117 had been a point of resistance, looks like it was going to be broken. Trade at 117.06, protective stop at $116.98, 3 lots. Scaled out of those lots as price rose, and particularly when price stalled. Ratcheted stop up manually.

Now that I have been through this process of writing up all the trades once, it will remind me to trade less!

Attached Thumbnails
Day Trading Stocks with Discretion-20120301apa01.jpg   Day Trading Stocks with Discretion-20120301apa02.jpg   Day Trading Stocks with Discretion-20120301apa03.jpg   Day Trading Stocks with Discretion-20120301v01.jpg   Day Trading Stocks with Discretion-20120301v03.jpg   Day Trading Stocks with Discretion-20120301v04.jpg  
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March 2, 2012

Net: -$133.02 from gain of $153.60 less loss of $286.62; profit factor 0.54
3 winners, 6 losers; 33.3% win ratio
Average win $51.20, average loss $47.70; W/L ratio of 1.1

Late here, will post screen shots tomorrow.

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March 2, 2012, screenshots

Traded 4 stocks today: LH, M, V, VFC


LH
Trade 1| Set up: Pullback after breakout. Stock opened lower than prior-day close. Shoots up to $89.50, passing yesterday's high, drops down to $88.95 (higher than todays open bar and higher than yesterday's low. Then gaps up to $89.20 and pauses there, pulling back ever so slightly for 4 minutes, then taking off again.

Entry: stop, 1 tick above the bar 10 minutes earlier. Looked good: prior day's high broken, found support off yesteday's low and forming a higher low, strong price movement past yesterday's and a slight pull back.

Exit: Stopped out, not 30 seconds into the trade.

Risk: $0.19 x 300; Reward: -56.91



Trade 2| Set up: Continuation of trend

Entry: 4 minutes later was trying a short

Exit: As price approached and slowed around resistance of $88.50, I scaled out of my position.

Risk: $0.15 x 200, Reward: $86.00


Trade 3| Set up: Countertrend reversal. I shouldn't but the drop down felt climactic.

Entry: Stop entry as price crossed the bar 4 minutes earlier.

Exit: Because this was countertrend, I rode the stops pretty tight and ended selling with limts around $89, where price had seen congestion previously and price appeared to be slowing.

Risk: $0.18 x 200, Reward $48.00




Trade 4| Set up: Pullback in trend. After a higher low was registered

Entry: Limit price entry.

Exit: I pulled my stop up. After I saw a lower high and a strong bear bar, I pulled the plug. Had I stuck with my stop at $88.96, I would have been ok and a gradual trend ensued shortly after, but I decided to take the $8 loss. Seems silly in retrospect given that total risk was $22.

Risk: $0.11 x 200, Reward $-7.96




VFC
Trade 1| Set up: Pull back in trading range. After price had failed to challenge a resistance level from yesterday ($147.50), and I saw a lower high, I decided to enter short to see if the trade would continue downward towards $146.25 where support was found yesterday.

Entry: Slippage was present on entry. I tried entering on a stop at $147.18. Didn't get filled until $147.06.

Exit: Slippage on exit too. Stop was set at $147.29, but no fill until $147.32. Not the end of the world, but what should have been a $33 risk trade ended up being a $69 risk trade with $78.76 loss.



I wonder if I had been paying closer attention, I would have seen the double bottom prior to my trade, and the higher low after my entry. Both suggest the trade probably wasn't the best for what I hoped it to do (continue trading downward towards next support). Actively managing this trade would have helped, but I have that whole regular job thing "getting in the way." So this was more of a set-and-forget result.



Trade 2| Set up: Pullback after breakout. Back at 10AM, market failed to break resistance from prior day. An hour later second run was made with some pretty bullish bars leading up, and even a pullback to Resistance, which held. So around $147.70 price pulls back and stalls.

Entry: Limit order.

Exit: I intended to put my stop at $147.49. As price dropped through resistance, i was wondering why I wasn't getting filled. Turns out stop was at $146.49. So a $40 risk trade turned into a $74 loss.



Observation: both VFC trades were made intrabar. On the historical charts they look like downright awful entries. But at the time, they didn't look as bad. If I waited for bars to close before any trade, I would probably not make some trades, but my prices would be worse for many more.



If any one has any thoughts on trading intrabar or waiting for the current bar to close, I would be interested in your experience.


M
The Macy's trade was interesting because about 5 minutes after putting the trade on, I was asked to step into a meeting for a few minutes. At that point, the trade had already run against me. But I also felt like if the market held support of $38.30 for the third time, it could continue trending upward like it had been for the last week. Should I just close it immediately out for a loss or step a away for a few minutes and let my stop do its thing? Tighten my price target?

If you have to step away from your desk mid-trade, how do you handle it? Why?


APA
Set my stop a little tight on this pullback trade. The trend had already run down, but seemed like 106.65 would have to be at least tested again. But what I neglected to consider is that after you have seen 3 legs down, the likelihood of a complex pullback is higher. So as much as I want a tight stop to get as many contracts as possible, if the trend is getting a little old, I shouldn't expect a plain vanilla pullback. Leave some room in the stop at that point.

Attached Thumbnails
Day Trading Stocks with Discretion-20120302lh01.jpg   Day Trading Stocks with Discretion-20120302lh02.jpg   Day Trading Stocks with Discretion-20120302lh03.jpg   Day Trading Stocks with Discretion-20120302lh04.jpg   Day Trading Stocks with Discretion-20120302vfc01.jpg   Day Trading Stocks with Discretion-20120302vfc02.jpg   Day Trading Stocks with Discretion-20120302m01.jpg   Day Trading Stocks with Discretion-20120302apa01.jpg  
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Thanks: 283 given, 325 received

Net: $164.13 = Gain of $254.03 less a loss of $80.90 (profit factor of 3.1)
4 Winners, 3 Losers, so 57% win/loss
Average win $61.26, average loss $26.97 W/L ratio: 2.27

Traded 5 stocks today: APA, AKS, LH, WHR, VFC


APA
Trade 1 | Set up: 3 executions, all looking to short with trend on pull backs.
Entry: Stop sells
Exit: Each time I had enough room in my stops to catch the next leg down, to the extent they happened. But I would tighten my stop as i saw price action start to reverse. Three trades cost $17.

Trade 2 | Set up: Pull back with bullish trend, after fighting the v-shaped recover, I got my orientation straight and went long after seeing a pullback form a higher low.
Entry: Stop buy a tick higher than the previous bar's high.
Exit: I pulled my stop up after a bearish outside bar formed after a brief leg up. Would have been nice to catch that run at the end of the day. Need to remember that a break even trade isn't so bad.


LH
Trade 1 | Set up: Rejection of resistance at $87.90, after LH formed a lower high.
Entry: Did not have my trade set up when the move down started, so chased entry with my stop.
Exit: I scaled out of parts after price reached a local resistance point from yesterday. Last piece was stopped out at where I had moved my stop to about 10 minutes into the trade.

Trade 2 | Set up: Pullback of downward trend after rejection of Resistance at $89.60.
Entry: I missed the first leg down to $89.43. Did not chase this time. Waited for a pullback and took one after price hung around $89.50 for 4 minutes or so.
Exit: I scaled out of parts as they approached the recent low of $89.37. It was getting close to end of day, and I was being called away from my desk, so I exited both pieces on limit orders.


WHR
Two trades on this chart. One rejection of resistance. The second one should have been a pullback, but I chased the entry a little.


VFC
Was looking for a pullback on the downward trend. 5 minutes too early Stopped out. Second trade was a fat finger trade where my PT or stop loss was set to close the trade as soon as it was executed. I would like to think IB would warn you of this before executing, but mostly I just need to pay more attention.


AKS
Big drop. This was a counter trend trade. Stock had been leveling off for a while after selling off. Tried to go long. Got a pretty good, patient price. Price moved up shortly thereafter, but did not sustain. Price action is harder for me to discern on these lower-$-price equities.

Attached Thumbnails
Day Trading Stocks with Discretion-20120305apa01.jpg   Day Trading Stocks with Discretion-20120305apa02.jpg   Day Trading Stocks with Discretion-20120305lh01.jpg   Day Trading Stocks with Discretion-20120305lh02.jpg   Day Trading Stocks with Discretion-20120305whr01.jpg   Day Trading Stocks with Discretion-20120305vfc01.jpg   Day Trading Stocks with Discretion-20130305aks01.jpg  
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March 6, 2012

Statistics for today are pretty one sided:
Net: -$267.00 = Gain of $254.03 less a loss of $80.90 (profit factor of 3.1)
0 Winners, 3 Losers, so 0% win/loss
Average win $0, average loss $89 W/L ratio: 0

Seems ironic to lose money shorting stocks on the biggest down day we have had in two months. It is possible. I think I let that expectation draw me into a lax exit management. I was so intent on catching what I hoped would be a large draw down, that I was lax managing my stops and trades where I probably would have scratched, I scaled out slower and let trades go against the full stop.

Also a frustrating day because the loss of $267 is -1.3% - well in excess of my day limit of -0.75%. I was at my limit and I saw two set ups that I thought were compelling: the temptation to dig out. So it was good they were both losers. Nice reminder. If they had been successful, I would have the temptation to try again on another occasion where the stakes would be higher and the losses worse.

Traded two stocks today: CMI and FST


CMI
Trade 1 | Set up: In retrospect, tough to see what the set up here was, looks more like a breakout with trend.
Entry: Admittedly fear driven, didn't want to miss the next leg down.
Exit: In the higher volatility, it was tough to get a trade on with the size I wanted. Probably should have passed.
Risk: $80, Reward: -$80.

Trade 2 | Set up: After two failed shorts, started to look for longs
Entry: Bought after lows that did not penetrate prior lows
Exit: Scratched 1, full loss on the second.


FST
Trade 1 | Set up: Three executions, all looking for shorts
Entry: 1st entry was rediculous. #2, #3 were ok, off pullbacks.
Exit: I tightened my stops on both #1 and #2, which prevented more favorable exit opportunities. So I left the stop untouched on #3, got run over.

Attached Thumbnails
Day Trading Stocks with Discretion-20120306cmi01.png   Day Trading Stocks with Discretion-20120306cmi02.png   Day Trading Stocks with Discretion-20120306fst01.png  
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March 7, 2012

Net: $68.90 from gain of $183.04 less loss of $114.14; profit factor 1.6
5 winners, 3 losers; 62.5% win ratio
Average win $61.01, average loss $22.83; W/L ratio of 2.7

I traded 3 stocks today: CMI, M, WHR


CMI
Trade 1 | Set up: I thought I saw price stalling after a run up. Should have seen it as a bullish triangle.
Entry: Got trapped on the false breakout
Exit: Stopped out. Risk: $0.25 x 200, Reward $-54.

Trade 2 | Set up: Two trades here. One fat finger where my stop automatically triggered when I entered. The second was right behind that to play a pull back on a bullish trend.
Entry: got in at the same price as the fat-finger trade.
Exit: Scaled out. Half at a pause in the run up, the other half when I got close to $118 and the high for the day.

Trade 3
| Set up: Missed the first leg down from $118.10. Got in what I thought was a pull back, fortunately stop was wide.
Entry: Shorted after third bar failed to break the previous two bars.
Exit: There is a fine line between cutting your losers and letting your winners run. This probably should not have been a scratch trade. Let it retrace way too far. Pull the plug after $117.65


M
Trade 1 | Set up: This trade is embarassing in retrospect. You have this huge bull trend, and I decide to short because there is a pause in the rally and it happens to be near a resistance point from yesterday. Oh well.
Entry: Stop
Exit: stopped out, at least kept it small Risk $400 x $0.06. Reward -$24

There was another Macy's trade, but it was a coutnertrend -$6 scratch on 600 shares, no chart below.

WHR
Trade 1 | Set up: After a double top, which cam after a high at resistance. A little risky b/c there was a higher low just prior.
Entry: stop. Chased this entry a little, was trying to get set up at the close of the prior bar..
Exit: Stop after market had slowed and started back up. Risk was $0.18 x 200, reward: $88.

Trade 2 | Set up: This was a countertrend trade after a strong run up, making a newer high for the day. Don't know why I thought that was a good idea at the time.
Entry: stop after price action was stalling and headed down
Exit: Took the full stop of $0.07 x 400. Should have been more aggressive with my stops, given the countertrend nature of the trade.

Attached Thumbnails
Day Trading Stocks with Discretion-20120307cmi01.jpg   Day Trading Stocks with Discretion-20120307cmi02.jpg   Day Trading Stocks with Discretion-20120307cmi03.jpg   Day Trading Stocks with Discretion-20120307m01.jpg   Day Trading Stocks with Discretion-20120307whr01.jpg   Day Trading Stocks with Discretion-20120307whr02.jpg  
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Thanks: 283 given, 325 received

March 8, 2012


Net: -$111.85 from gain of $4 less loss of $115.85; profit factor 0.03
1 winner, 4 losers; 20% win ratio
Average win $4, average loss $28.96; W/L ratio of 0.1

I traded three stocks today: APA, LH, V

APA
Trade 1 | Set up: This set up was more of a breakout than a pullback.
Entry: Stop
Exit: let my stop sit out there the full run against it. Don't know why i think that will let me catch a big runner. If it is moving against me it should be cut off eventually. In this case, around $116+.

LH
Traded 1400 shares for a gain of $3, all scratch trades

V
Trade 1 | How do you lose money on a bull trend day buying? Buy at the very tippy top of the bar.

There was another trade in V, $4 scratch. It was a countertrend short.

Trade 2 | All I had to do was buy a pull back and hold on. Instead I take a top of the market entry like this.

Attached Thumbnails
Day Trading Stocks with Discretion-20120308apa01.jpg   Day Trading Stocks with Discretion-20120308v01.jpg   Day Trading Stocks with Discretion-20120308v02.jpg  
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