At least the market is closed on Saturday and I don’t have any major work projects due, just couldn’t get to sleep last night. Here’s a bunch of info, thoughts and rambles bouncing around my head. I was hoping to revive my fitness weekend path with a run on Sunday, but not sure if my body will recover in time. I’ve ordered things in terms of relative importance, meaning trading stuff first with meta and personal kinda of things at the end…
Review of Trades From Last Week
I pulled and made notations on the charts of the stocks I traded this week, 10 of them not counting the positions I entered because of ordering errors. While I netted $165, more than any week day trading, this is what I found in general:
- I jumped out of five of them way too early; if I had simply followed my oft-repeated interim guidelines by taking partial profit at 20 cents (1/2 position), moved the remaining position to the price I entered, and let things play out, I would of extracted at least another .50 cents per trade.
- For stocks with bigger ADR, like more than $3 and/or longer candles, moving my initial partial profit target to .50 cents, and then letting the rest at least run to a $1 – would of resulted in even more green.
- I need to remember to guard against thinking distortions in my a trading analysis, things that and Michael Goode have written about – like selection effect, confirmation, survivorship, and recency bais, and discounting randomness. I don’t need to make this all complicated but I need to not jump too conclusions without looking at the data, etc.
- So the jury has not issued a final verdict on whether my hesitation in entering set ups is making me miss out on winning trades more than it is keeping me out of losing trades, and I need more info to see how my basic trade setups are more likely to play out on choppy days versus major market trend days.
Overcoming Barriers: Hesi-Trading & Letting Winners Run
HESI-TRADING: That said, I currently use the Order Management System (OMS) for making transactions in Laser. However, going forward, for all entries, I’m going to start utilizing the one-click order system that is part of the Level II window, which is linked to a chart and a times and sales window. This will eliminate having to open an order ticket, inputting all the trade info, then clicking finished, and then one last confirmation step to actually start the order. Reducing from three clicks to one – thus I will have less time to get paralyzed in thinking after my initial determination to make a trade. It will actually also likely reduce order errors as I won’t have to manually input the ticks, toggle between a buy and sell button, etc. (unless there was a way to use OMS directly from charts that I am not aware of currently). I still have to work on the behavior but I think this may help out get me going in the right direction.
LETTING WINNERS RUN: This one I need to flush out the details still, but I’m going to start by employing this framework for fixing bad habits from Dr. Brett at TraderFeed:
All psychological change starts with three steps of progress:
1) Recognizing a pattern of thought, feeling, and/or behavior that is associated with unwanted consequences;
2) Consciously, willfully interrupting that pattern, so that you avoid its consequences;
3) Consciously, willfully enacting a different, more constructive pattern of thought and behavior to produce new, corrective emotional experiences.
Psychological change is all about creating new endings to old stories. Half of the battle is simply recognizing repetitive problem patterns as they occur, reminding yourself that you’ve seen this movie before, and direct your attention and efforts elsewhere, in a more constructive direction.
I’m completed step #1, now I need to identify tactics to interrupt (stop) this pattern as I trade, and replace it with a more positive course of action. If anyone has any concrete ideas, please let me know.
Level II Tutorials
Recently, I have started to use movement and price action shown in Level II as a confirming secondary indicator. I have found that acceleration in price and volume can be picked just as a stock makes a big move – what I refer to as “Jiggy” – using the term Muddy labels similar action he spots in the Scottrade Q-Box. Here are two training videos giving the basics of Level II and good explanations on why as a trader you should use bid and ask activity in Level II with much caution – something I suspected and will be more careful with going forward.
From Brendan at Informed Trades: http://www.informedtrades.com/498104-level-1-level-2-a.html
From Brian at AlphaTrends: http://www.vimeo.com/5187762
Several Blog Posts On How to Become A Successful Trader
I really related to parts of this as a big step that I took was when I really started to own my trading strategy by tailoring and customizing it to suit my personality and strengths, making it my own. I certainly have not reinvented the wheel here, but I feel like my plan is more mine than I ever did before – engendering more confidence and investment in it: http://blog.bigmiketrading.com/2009/04/key-to-successful-trading.html
Here is another post with a similar theme: “Too many traders are looking for setups, when in fact they’re the ones being set up.”
Goodbyes For Now
The blogs I started off reading when I first began trading – many of these traders have signed off by making their blog private (Rob @ Stock Insight), taking a planned hiatus (Dinosaur Trader), complete deletion of their blog (Tort @ Stack Your Cream) or not much posting recently (Attitude Trader, Ryan @ Riding the Noise, and IL Torello, and many others).
I guess that’s the nature of social media, and a lesson for the markets themselves -environments are not static, conditions are in flux and the players are always on the move. As a human primate, at least for me, I don’t like change, and maybe the uncertainty it implies. Trade well!
