As I sit out today from both sim trading and with real cash trading (ok, well for the most part), the Dow looks like it wants to head to at least to 6,600. My mom and her five siblings are all invested a ton into the stock market – I haven’t talked to them about it – but its got to be painful to be a baby boomer right now. Our household’s little rinky dink 401(K) was way down the last quarterly statement, and the market has tanked way more since the end of the year! Oh, well, we have 25 years to hope and hold – at least our monthly contributions now are buying things cheap. Thanks to the Daily Show (via the Impatient Trader) for putting things in way you can laugh about it.
PAPER TRADING: This morning I shorted FAZ around $87 in my paper account. It looked like it was at a well tested resistance level. Well it then broke out past it today. Thank god my prop firm doesn’t have FAZ shares to short (and I have no idea if you can actually short FAZ but it makes much bigger moves than longing FAS, in any case, the point may be moot).
GAMBLING: Based on my success in picking tops and bottoms, with a little money I had in my Think or Swim account, I bought 100 shares of C at .99 cents. This is a long-term bet and hold: I will either be out $100 when they are nationalized / go bankrupt or someday it will go up again toward the $50 it was worth 18 months ago. But most of all, I want to see if I can sit on this 100 bucks on the table for however long it takes to die and or go up. I’ve gotten so impatient trying to be a day trader, I wonder if I can do it? I may place similar bets if other stocks like GM or F go near $1.
META: By the way, I added a bunch of great blogs to my links to the right that I have started following the last month. Check them out.
PERSONAL: My wife’s grandfather has taken a turn to the worse in his health and she has taken off with the baby for a visit. I may have to disappear for a bit if the worse happens. There is no upside to death, but I hope I can live a good 80 years like he has.
PROP TRADING: Here’s my goals for Friday or whenever I trade next.
1) One position at a time – to better follow my rules and prevent over trading.
2) Follow this position on the 5 minute chart – go only to the 1 minute chart for exit confirmations. To support this, I’m eliminating the 1 minute tab in my charting software and will have to manually input if I need that view.
3) Chart each and every trade in my worksheet. Hopefully, with only one position at a time, I won’t have excuses to be lazy.
4) Forget about profit and losses – focus on my following these goals. To accomplish this, and as a sign I’m actually progressing in this area – I will not look at the green and red summary tab in my Laser account platform.
5) While my aim is to pick better set-ups and ideal entries, the trading rules I must strictly follow are my “exit guidelines“. As reviewed in my posts yesterday, this the area of my greatest weakness currently and I want to focus on this dimension before perfecting my sets ups.
6) Last, if I follow the previous five rules on a given day, I can make as many trades on that day as long as I’m exhibiting trading behavior consistency – but if I break any one of the previous five rules, I then will limit myself to 3 trades on that day, or with the trade I break the rule – that will be the last trade for that day.
In addition, if I can’t be disciplined and a) take only one position at time; b) monitor positions on the 5 minute chart; c) complete a worksheet on every trade; d) not look at my profit and loss summary for the day; and e) follow my exit rules perfectly – then as a consequence for not following these rules, the next day and forever long it takes, I will only paper trade until I demonstrate to myself I can be follow these simple five little steps 100%.
LAST, there are some bigger picture things in my life as well as my trading world that I need to address as they are effecting my ability to be a good trader. I am giving myself until April 1st to accomplish these things – if they are not done by then, then I will GO on HIATUS from prop trading, paper simulation and blogging until they are done. They are as follows:
- Written Trading Plan – Yngavi did a great post about this last week. While I have my worksheet and this blog, I really need to formalize my ideas and put them down on paper, especially if I’m going to be using real money in a prop account, even with small positions.
- Life Balance – As I wrote about over a month ago, there are some everyday habits that I need to institute personally. These are things I have struggled with for decades. But I totally believe I need to put these practices into place to succeed as a trader (let alone live a long life as a father and husband). Simply these rules are: 1) Exercise daily; 2) No caffeine; 3) No fast food; 4) No late night eating; 5) Take my vitamins; and 6) Bed my midnight. I simply have to do these each and every day; I track them via the widget on the far right of this blog, which is linked to here. As Fear and Greed Trader said before his blog went private:
Being disciplined to maintain a healthy weight through exercise can become a transferable skill to being a disciplined trader. If you can’t stick to a simple plan of regular exercise how can you expect to be able to be really disciplined in other areas?”
- Complete a “To Do” List: I have a list of “must do” tasks that need to be completed. These are things from doing my taxes to fixing my printer (so I don’t have to run to Kinkos to print a document up, etc.) I have prioritized family, trading and work in equal proportions and everything else has been put in a parking lot. If I get these “other” things done – all one time tasks – they will create efficiencies as well as relieve alot of stress, and thus make me more free to focus on the important things in my life.
The Trading Plan, Life Balance and To Do List were all things on my agenda that I wanted to get done before I started prop trading – which I had projected to begin April 1st. Well, on Monday, I impulsively decided to move that time frame ahead of time (just like I impulsively bought C today – hmmm, I can’t make this a pattern). I still think these were decent decisions, especially testing out the Laser platform and test driving prop firm trading.
That said, I need to be adult and a professional about this – so any blog readers, if you see me not following through on any of these plans and promises – call me out on it!
PLEASE!
