Four trades today in my prop account, so I slowed my over-trading. In terms of my discipline goals, much better than Wednesday but I will be paper trading on Monday until I get 100% compliance. Here’s how I did:

1) One position at a time – YES!

2) Monitor positions on 5 minute chart – YES, but need to amend to also only ENTER positions on 5 minute charts.

3) Track every Trade on Worksheet – YES

4) Forget about Profit and Loss – YES – didn’t look at green/red summary tab until end of day but did think about it a bit.

5) Follow Exit Rules – NO; on BX, I saw the overall market make a big green candle around 3:30pm, and covered without looking at the technicals, just exited so I could enter a long to catch end of day rally. I sold at a horrible price.

6) Only Make More Trades If Rules Followed – NO; after breaking the rule on BX I should of shut down for the day and not made this trade.

Here are the trades:

Stock # Gross Fee Net S/L Rules Note
100 -18 -1.89 -19.89 L 1 No entry signal, moved stop
100 -8 -1.89 -9.89
L 1 Good entry and exit
BX 100 -8 -1.84 -9.84 S -1 Panic covered against rules
DOW 100 7 -1.89 5.11 L -1 Good entry, EOD exit

-27 -7.51 -34.33

That Thursday about three weeks ago in which I made some paper money ($400ish) has negatively inpacted my trading. I just realized it today; I keep expecting a strong counter trend rally and today I was looking for a relief bounce. It came, but not until 3:30pm – and not very strong at that. I would of been much better off shorting after the morning gap up and going with the overall trend since January 1st. I need to stay more neutral about what I “think” the market is going to do overall because of being oversold, or hitting a bottom or trying to catch a reversal – and FOCUS on the stocks I’m trading.

My first FAS entry was horrible; it was on a doji candle on the five minute chart. But I entered by looking at the 1-minute chart on what was a higher, higher – had I been looking at the five-minute chart, I would of saw a clear downtrend, that the price was well under the 10 SMA, etc. (bearish to me). Then to make things worse, I moved my stop 4 cents (staying in too long this time!). My second FAS trade was worth the risk, the entry was warranted and I exited after a 10/60 SMA cross on the 1 minute chart per my rules, though didn’t exit right away costing me a couple pennies. Here’s the chart for FAS today. If I had not made the first FAS trade, I would have entered FAS on the second rally attempt at the EOD and at least caught some gains. This is one of the consequences of entering bad set ups.

I entered a short on BX on what looked like a double top and a break of $6. I was monitoring it and then it broke down to $5.88 on a red candle. It only dipped a bit more from there. My entry was a bit of a chase, but my exit was completely panic sell pure on fear – NO THINKING! So it’s paper trading on Monday. DOW was a chat alert trade of $7 cross; I covered end of day for a small $7 gain. Here’s the trade log:

So on Monday in my paper trading, I have to keep following my rules listed above, but have to add the following as MUST follows:

7) Use limit orders (I’ve been using market orders but my fills have been bad – my last couple transactions were limit orders).

8) Buy on a dip, short on a pop (I’ve been chasing too much and need to enter on pullbacks – they always happen; I didn’t do this on any of my trades today or this week for that manner).

9) Entries must be on the five minute chart (as well as monitoring positions once I’m in using the five minute chart – I didn’t do this on my first FAS trade today).

10) Entries must meet one of my entry signals listed in my worksheet (just this would of eliminated at least half of my bad trades this week – see first FAS trade today).

11) I must exit as soon as I get the signal (I was too patient today and gave my trades too much room to breath today – I did this with my second FAS trade)

12) Don’t move my stop orders once they are placed (I did this on my first FAS trade).

I will paper trade when day trading until I get 100% compliance on all these 12 rules on 100% of my trades for the day.

Have a good weekend.