Sunday, July 12, 2015

CTRP Trade/Weekly Recap 7/6 - 10

This week has helped me realize that finding a bunch of trade opportunities each day is a recipe for disaster.  Just because I am trading full time doesn't mean I have to find 6 or 7 trades each day.  If I can find 2 or 3 tickers a week that have large potential gains and take advantage of them, that's all I need to be successful.  I just need to concentrate on the best setups and lock in on them.  It is too easy to over-trade in this market.  I tried my hand at making a video explaining my CTRP & JMEI trades but I do not know how good they are in explaining my trade so I am going to do a written one here as well.  I want to eventually make a video journal of my trades so that I can go back and listen to myself explain what I was thing in a trade.  I traded 7 times this week.  3 trades in 1 ticker and 2 on another for 2878.00.  My other 2 trades were small losses on fake outs.  My largest trade was on a short.

What might have helped me was the fact that we went to the hills on NC for the 4th and I only take my laptop and 19" monitor with me when I travel.  I think this forces me to focus on just a few tickers that have the most solid setups.  It limits how many tickers I can follow throughout the day and keeps me focused on maximizing each ticker's potential.  When I got back home Thursday and Friday were not good days.  I took 1 trade each day for a small loss and never found a solid trade. Just a couple of fake-outs.  This is what I take with me when I travel.  It breaks down in minutes and I have the wiring attached.  I can leave my main trading station untouched.  I may start leaving my main station off and just trading with this!



                                                                    All Trades Long Trades Short Trades
Total Net Profit                                              $2,825.00 $1,971.00         $854.00
Gross Profit                                                    $2,878.00 $2,024.00         $854.00
Gross Loss                                                    $53.00         $53.00         $0.00
Total Trades                                                    7                 6                 1
Winning Trades                                                    5                 4                 1
Losing Trades                                                    2                 2                 0
Avg Trade Net Profit                                            $403.57         $328.50         $854.00
Avg Winning Trade                                            $575.60         $506.00         $854.00


CTRP 


CTRP hit my gap-down scan Monday morning.  I looked at the daily chart and quickly identified a gap that was in play.  It is highlighted in yellow.  I noticed how the top of that gap held as support for a while.  I also noticed that it has been making lower highs and it appeared to me that it was beginning to trend. down. Friday it had dipped below that support but got bought back up and then closed on the support level.  Monday morning it had gapped down below that support.  I didn't find any news on it but it is a Chinese stock so in my mind that was a good catalyst for that ticker to be "in play".  My plan was to trade it short for the gap to sell off and take profit at the bottom of the gap.  The gap was about $4.50 but I expected to get at least $3 of the move.  The pre-market chart looked messy but I was still optimistic about the trade.  It was still below the support level from the previous weeks.


I always wait at least 10 to 15 minutes after open for a ticker to settle and pick a trend before I trade it.  I especially made it a point to wait in this case because of the crazy pre-market action.  After the first 5 min. candle printed I felt my plan was in trouble.  The second candle confirmed it when it made a new high.  The next 3 candles were Doji's but all traded above VWAP so my plan was dead.  I took it off my watch because I didn't have a plan to trade it long.  As you can see the ticker recovered and the daily support level held.

The next morning it hit my gap down scan again.  Again it gapped down below the support on the daily chart but this day it didn't have a lot of volume or the crazy action.  I had the same plan for it Tuesday as I had Monday so I just waited for the open and watched the price action.  It did exactly what I expected it to do.  After 5 minutes of indecision it started to pick a trend and I was able to get a good entry on the 3rd 5 minute candle.  You can see the difference between Monday's chart and Tuesdays chart.


$854 profit CTRP Short Stock by AverageJoeTradr
$426 profit CTRP Long Stock by AverageJoeTradr
$558 profit CTRP Long Stock by AverageJoeTradr

My initial profit target was the lower gap line but it made it there so fast I left it on.  The next candle printed green and the next one was headed in the same direction but I stuck to my stop being the VWAP and I let the trade work.  It came back to me and hit the lower gap line again but now I had more confidence in the trade and I said that I would not cover unless the price action gave me a reason to.  Now it printed what I like to call a reversal hammer the second time it hit the lower gap line but I waited for the next candle to make a new high, which is what I normally do when I am tracking reversal setups.  I didn't make a new high so I kept the trade on.  When it finally printed another hammer on LOD, I was alerted again but this time I got the next candle to make a new high so I took the trade off.  I immediately started looking for the reversal since it was the perfect setup that I look for everyday.  The next candle gave me confirmation so I took the reversal trade.  My initial target on reversals is always the VWAP so I looked to take profits there.

The next leg I look for on reversals is the move off of the VWAP or the "VWAP Pop".  This usually takes a while for the ticker to consolidate and gear up for the pop but this time at was ready within 15 to 20 minutes and I caught that trade for another decent gain.  Once this setup works my stop becomes the 9EMA.  Once it closes under the 9 I will usually take the trade off.  If it dips below it's fine.  It has to actually close below it for me to act.

As you can see there was actually a 3rd leg to this trade but by this time my computer was off and I was done for the day.

JMEI



JMEI hit my gap down scanner on Wednesday.  This ticker had a lot of volatility along with the other Chinese stocks over the last few days so to me it was another ticker that would be in play.  I looked at the daily chart and saw how this ticker had been fading over the last few days.  Based on the daily I came up with 2 plans.  One if it sold off like it did the day before and hit the support in the low 15's and reverse and one if it broke support and just kept fading.


$685 profit JMEI Long Stock by AverageJoeTradr
$355 profit JMEI Long Stock by AverageJoeTradr

I waited for the open and the first candle gave me a strong decisive move up.  I chose the long plan even though it didn't get down and test the support level on the daily like I anticipated. The solid price action told me the story.  I entered on the 2nd 5 minute candle with my stop being the VWAP.  My initial profit target was the intraday resistance from the previous day.  My target is usually the upper deviation band on the VWAP but the resistance level was so defined I felt that would make a better initial target and then go form there. It was well on it's way but the price action scared me out.  I saw a large amount of sellers come in over 18 so I got out. Turned out to be the right move.  I then waited to see if it would pull back and pop off the VWAP.  I got the pop and my plan is usually once the trade is working my trailing stop is usually the 9EMA.  Once it got over 18 again I started seeing some crazy things on Level II so I took profits.  Turned out to be a good move.  That area of resistance around 18.30 turned out to be strong again.

These trades do not come all the time.  The Chinese markets made these trades possible.  I know now more than ever that I need to continue to focus on the tickers in play early.  Make sure I do my technical DD and have a plan in place at the open.  When I find a "hot" ticker I need to keep a close eye on it throughout the day.  Also, I learned not to give up on my plan unless I get a signal to do so. Trust my abilities and what I see.  And oh yeah, hide my P&L.  It will cause me to make irrational decisions and limit my profitability.

Also, please critique my videos when I get them posted.  It should be in the next day or so. I like doing those so I'm hoping it will keep me from having to write so much but I want to make sure I am doing it the right way so any input is welcome.

Saturday, July 4, 2015

My Awakening / Weekly Recap 6/29 - 7/2

Well, as you know I have been struggling with myself ever since I started doing this full time last month.  I would think I figured out what the problem was only to have it pop up again.  I was finding bandages to temporarily stop the bleeding but didn't really find the root cause.  Last week I read this blog by Nikkorico: http://nikkoricoo.blogspot.com/2015/06/longevity-via-consistency.html  It helped me understand that my problem was in fact psychological and it was something that I never once thought about. I was prepared for the pressure of doing this full time and trying to make a living at it, but I wasn't prepared for the pressure that I had inadvertently put on myself.

As I said before I started this blog and I started tweeting my trades and my watches as a way to help me see myself from a different perspective and possibly get feedback on what I was doing in my trading.  During this time I was able to find tickers to trade with ease.  I enjoyed about an 80% win rate, which I feel was manipulated because I was trading scared.  I would cut a lot of winners off too early, and losers as well because once the trade went green I would not let it go red again, even if it meant only getting a couple of dollars. It would still be red because of commission costs but my P&L would show green.  Starting this month when I download my trades into Profit.ly they will have commission costs included which will reduce my win % by 10 to 12%.  Profit.ly is free for how I use it and it helps me to easily record and track my performance, if you do it correctly.

Also, the market was strong and the tickers I picked were mostly making good moves.  I was feeling really good about myself and during this time I had fellow new traders following me and becoming inspired by what I have been able to accomplish.  It wasn't easy to get to this point.  I had done a lot of studying and a lot of failing in my first 6 months of trading, but things were just starting to click.  I began receiving messages from other new traders who identified with my struggle and followed me as a motivation for them to get better.  Not that this was a bad thing. It was just that I wasn't expecting it.  Because of this, I wasn't prepared to handle the psychological aspects of it.  The feeling I had that others depended on me to be an inspiration to them and the need to continue to excel at at certain rate began to take it's toll on me.  The bad thing is that I was unaware of this and what it was doing to me psychologically.  After reading Nikko's blog it all came together.

So this week I took a step back from Twitter and didn't post much.  I have been trying to regroup and come up with a plan.  More education is my primary focus.  I learned a lot this week starting with Nikko's blog but it didn't stop there.  Mike in DTW has been in chat after lunch going over some VWAP stuff which was great because I like taking breakouts and breakdowns off the VWAP.  These types of trades are perfect for novice traders like myself and come with a solid defined risk.  I watched his webinar he did back in April in chat a couple of times as well. I am also going to get some 1 on 1 mentoring with Mike to help me analyze my trades and move my trading to the next level.  The week culminated with a webinar sponsored by Trade Ideas.  You know inevitably it will be a plug for Trade Ideas but I heard that the guy doing the webinar trades the 15 minute opening range breakout like I do so I signed up.  It was the perfect end to the week.  Mike told me last week that trading stocks based on a chart pattern or setup that weren't "in play" elevated my risk because if they do not have a catalyst, they will just trade with the market, but it didn't click then.  When I listened to Kunal's webinar it made sense and I was able to understand what Mike was trying to say.

When I was on fire the first part of the year the market was strong and more volatile so I was getting stronger moves and I was making money on tickers that weren't in play.  June hit and those tickers that I would find before did nothing.  This is when doubt crept in.  I started worrying about not only myself but those who have been inspired by what I have been able to do and I felt an obligation to them.  Being a teacher those feelings were only natural. I would force myself to find those trades I used to find earlier in the year.  Maybe I would get a .10 to .20 move but these aren't trades to base a career on. I felt there was something I was missing.  I was dismissing my inability to find these trades because the volume was down in the market and it being summer.  Now I know the rest of the story.


This is an example of the types of trades that worked earlier in the year and gave me some big moves but are not working as well this summer.  This ticker had some news but not the type that one would consider a catalyst.  However, every time a news story came out, the ticker popped .40.  The first move did not make it to the VWAP, which is usually my first target. It touched the 20 EMA and then faded.  When it failed that move I took it off for some profit.  As I continued to watch it, I noticed it grinding up towards the VWAP, which is what I initially wanted.  Had I stuck to my planned stop on this ticker at LOD, I would have still been in for that move through the VWAP. I would have been in for only 1 trade and I wouldn't have lost on that 2nd trade.  I had an urge to sell after the second red candle on the 2nd trade but after what happened previously I stuck to my plan and lost.  The funny thing is if I had stayed in the trade from my first entry, that would be where I would have exited.  I have done this too many times this summer.  Other than the VXX trade that I took, which is something else I learned about from Mike, ETSY was my only trade on Thursday.

This is what I am having problems with and what I will be working with Mike on.  I am finding a lot of the right stocks but I have to have more patience to stick with my plan.  But I also believe I need to adjust my mindset on these during these slow months.


This is another ticker that was on my watchlist Thursday but I didn't trade it.  News was the catalyst that made this ticker move.  Even though it was referring to a downgrade the ticker had already made its move down.  This is why they say you have to wait for confirmation of a trend before you trade the news.  I didn't take it because the volume seemed too light to push it up enough for a decent move.  This one was good for an .80 move from where I would have entered and where my first exit signal was given at around 2:15-20 when that 5 minute candle closed below the 9EMA.  The moves are there but I was not looking for the right things before I entered a trade on these.  I have to make sure there is some type of catalyst that will drive the ticker to make the move I am looking for.


Here is a ticker that hit my reversal scan Thursday but this ticker did not have any catalyst and just trended with the market.  A trade on this ticker would have been a sure loss


Here is an example of a ticker setting up for a reversal.  Everything is in alignment for the setup.  Had I been watching this I would have entered on that arrow.  Another sure loss. This is what has been happening to a lot of my reversal trades this summer as well.  The problem is I would't look to see if there was a catalyst to fuel the reversal.  There wasn't and the move failed.  Now I know to look for a catalyst.  If there isn't one the ticker is not in play and I shouldn't trade it unless news or some catalyst pops up on it.  An important lesson I learned this week.

I am looking forward to working with Mike and taking this trading to the next level. In chat this week he introduced us to some tickers that trade opposite the SPY.  VXX was one.  I saw the SPY make a lower high after the open relative to the pre-market high so I anticipated the SPY to at least tank during the morning session so I entered VXX with a 200 share position with a stop on LOD to try this new strategy out.  Maybe beginners luck but I know how to tell if a trend is reversing and most of the time I can halfway follow a plan so I think I did a good job with it. I could have sold it a couple of times when it barely dipped below the 9 but I was trailing the stop .05 below the 9.  I didn't plan on holding it this long but my position size was so small I had very little emotions tied to it.



I've got to learn more about this in the weeks to come but this looks promising whenever the SPY is very volatile.

For my peace of mind I will only download my trades to Profit.ly at the end of the week so that I am not thinking about profit targets and percentages and all that.  I will keep posting my watchists on Twitter because I do get some feedback during the week that helps me refine my lists and that works out.  I may vent about trades but I'm nor going to try and call out all my trades because of the time I will need to properly vet them before I enter into a trade.  I'll keep letting those know who I chat with all day on Google Hangouts as we bounce ideas off of each other all day and that helps me out a lot. I'll still announce what I may be watching on Twitter but it's too difficult to announce entries and exits right now.  I'm back down to 5k starting out this month.  I only use 2 to 1 so trades will be small starting out.  I actually think I do better when my position sizes are small.