I started off good this afternoon with non much prep because of being busy in the morning, but I was playing for a an afternoon fade and it didn’t work out well for me, going from up +.215 and ending -.245 on a total of seven trades.

My early winners (ZLC, PLD, MGM) were all long scalps that I was in only a couple minutes. I rode momo with them and exited when they became over-extended. My short fades (YGE, PLD, and EXM) were largely chases and not good set ups (shorting at recent support under oversold conditions in a up and down choppy market – which closed very bullishly). Just a couple observations:

1) I tried the scaling in strategy; on trades that move in your favor you then don’t get an ideal entry, so not only are your profits cut into, it then raised the bar for making these trades winners. For example, my ZLC long spiked a dime after I entered a half position. I then took on a full position but it then stalled there a bit and it almost became a loser again. So, I’m going to stick with all in and all out for now.

2) After abandoning the scaling in strategy, I then doubled down on a play – and as always, it didn’t work out for me. So in my trading, I need to not do this – cut my losers, and move on to another play.

3) In general, I don’t have a good structure for becoming engaged in the afternoons; on days where there are reversals (usually fades, but the 3:00pm rallies as well), I have had some luck, but on average days I tend to get whipsawed around even though there are plenty of opportunities. I need more practice in the PM, and will likely refrain from trading in the prop account in the afternoons with real money until I become more acclimated – I’m way more confident in the morning (partly because of energy levels as well).


Last, in the realm of real money trading, at the beginning of the day, I had a stop order in for my 20 shares of FAZ at $15.82. When I saw it dropping at end of day, I canceled the order. Impulsively, I bought 20 more shares at $15.77. I am now a proud owner of 40 shares at average price of $17.30. Where it is trading now in afterhours, I am down a total of $80. However, my small position is now 4 times what it was originally. So if that baby gaps down $3 on Monday, this will be $120 more lost. Anyway, the only thing I know at this point is that I’m not going to double down anymore, and if FAZ is lower than $15 on Monday, I will be selling. Obviously, I’m hoping for a pullback in the financials to hopefully exit graceful on this. Some things I learned about this:

1) Don’t trade on my beliefs on the fundamentals of the economy; it’s crazy we keep going higher (did you see the jobs report today, and they say it’s going to get worse?) especially the banks but the market doesn’t care about that I think.

2) Don’t fight the trend; if I had simply bought 100 share positions of FAS on pullbacks the last couple weeks, I would be looking pretty!

3) Cut your losers; this goes beyond just preserving capital. Since I have a FAZ position, even a small one, I’m vested in the financials tanking. This investment has clouded my judgment and is a major opportunity cost as I’m not participating in the short-term trend (and maybe long-term turnaround).

4) These 3x leveraged ETFs just have too much decay; the best strategy maybe just to short them on their pops in terms of long-term holding. In any case, in the future, I’m going to use them for day trading vehicles only.

5) Don’t trade on the price of a former stock; I have been blinded by FAZ being at over $100 just a month or so ago. There is not a fundamental let along technical reason to be in a trade; it’s more a fanatical justification.

Anyway, we will see where things go; it still is a relatively small amount of money. So hopefully, I will learn my lessons without losing all of the $700 I have in FAZ right now.