Update about recent absente..

I wasn't posting lately because I had a shitty time in the markets..
I've lost too much money lately to be able to call myself "Day trader", trading have been extremely difficult, or should I say.. gambling...

I wasn't really trading, after looking at recent results, I clearly saw that I'm breaking virtually every rule I've ever made, and that I'm impulsive as I was at the time I was trading futures, this led me to posting the rules, that I follow from now on, and also led me to conclusion that I need to lower my R size back to 25$.

I simply cannot afford to lose 3R x 50$ everyday, so I put trading back on the 2nd gear, to slow things down, I practice being rational in my trading, thinking before I enter trades, having a clear mind, and not breaking any rule, after all I've written those rules because they are acually lessons from my trading.

So I'm now going to get back to normally blogging, since this is my trading diary and it really helps.

I've lost about 50$ this week, trading lightly, not doing rules breaking mistakes, only picking the wrong stocks acually, but at least I pick them selectively and not impulsively and irrationally.

That's it for now.

Good day everyone.

Trading Rules

Trading Rules

1. Only take trades that are suited (entry point is logical), and if my mind is clear (didn't revenge trade).

2. I take my stops when I'm supposed to.

3. If I lose money twice in the same stock, I stop trading it for the day.

4. Exit a position if I'm negative after 10 minutes.

5. I'm done for the day if I have 3 consecutive losing trades.

6. I'm done for the day if I am down more than 2R.

7. I sell partial upon reaching 2R.

8. I higher my stop to entry point after being +1R.

9. I take the first trades with smaller profit, 1R-2R more or less, to build confidence.

10. I don't leave a position open un-noticed.

11. The trend is my friend.

Refocusing...

Lately my trading was mixed out, and that caused some losses, I hate the fact that I'm losing money, and it's not something I want, I was profitable from the first month, doing stuff according to the rules, and only when I "outsmarted" the rules I started losing money.

So from now on, the rules are holy, the boss have gone to a business trip and will give me a hugh bonus if I'm keeping the rules, and not upon money results.

Thus, I decided to lower my R size from 50$, back to 25$, so I'll take things easy, I'll do that for 3 weeks, and I am sure that it will show a positive results, I'll focus on the method of trading more than on the money returns, I'll take good trades, and make money.

What's left is to post the trading rules so everyone could see what rules I'm talking about.

That's it for now, progress is in the making :)

Daily Journal +1.42R

Today I've been doing the sort of trading that does work for me lately, and it is trading lightly, and quit as soon as I got more than an R. why am I doing that?
Because lately, every time I reached +1.5R, I just went down to -3R afterwards, when I said "1.5R isn't enough", but the way I think about it, if I keep making 1.5R a day consistently almost every day, that means I get about.. 10R a month, now it's not much, since my R is 45$, but when my R will be 400$.


It'll mean I'll be making 4,500$ a month, working about a hour a day, which rocks! since I could tend to other ventures and do the thing I love doing, I could virtually work from everywhere, and therefore fulfill a long wished dream of doing a winter season only snowboarding! that's one of my dreams, and I think that I'm ready to fulfill it.


I'm not trading really for the money, money sucks, I trade for the freedom to have time for myself, the way I see it now, I'm at work 9:30am until 6pm, or later (software companies..), then I go to the GYM 3 times a week, that means that my day really starts at about 8:30pm, I spend most of my day stuck at a place, not living life, just working. I'll start surfing in the mornings when there are waves, like next Sunday, so it'll be a nice addition to my day.. waking up at 6:30am..


I honestly think that people who are stuck at the whole working environment are missing out life, I see them talk about work all day long, when they come back home, they check emails, in the weekends, they don't do anything special, because they are stressed of what will happen at work when they come back, I don't want to live life like that.


In Israel we must recruit to the army when we turn 18 for 3 years, so we really start "living" at the age of 21, which sucks, so we all work for some time, and for a "after army trip", at least most of us go, they go to Australia, South America, and other exotic places for about half a year or so.. I went to Thailand and China for 4 months, and caught the "travel bug", it really opens your eyes for the world, you meet new people, explore the cultures, I even studied a bit Chinese because it is so difficult to get around there, so what I'm trying to say is that after that trip, and my 2 months trip to the USA when I was young, and other assorted amount of trips, I really like being "on the suitcase", and going from place to place.

I even match my trading style to that, I trade with 1 screen setup so when I'll get to travel, I could carry a laptop everywhere, I trade only a hour a day or so, again, so I could have more time for myself, and less "screen time", I do everything to get to my goals of "financial freedom", and what I like most about trading, is that it's still is exciting, and not as mechanic as everyone say it is, when you trade less, you don't have much time accumulated and not get bored.

Anyways, I hope things will turn out right, and I'm glad to say that after 2.5 months day trading stocks, I'm still profitable, hehe, well that's after losing money day trading futures against the odds, so it's ok. coming to think about it now, it seems like forever, day trading only 2.5 months, I thought I'm trading for about 4 months, damn this day trading is extensive..

Have a good day everyone! :)

Blog?

I'm not sure if anyone is reading my blog, since there are no comments, but I think the blog serves a purpse, every day when I finish the day I automatically report the results for this blog, this way I finish the day without making foolish mistakes.

I found that my style works best at the first 1 and a half hours, so I trade at that time, I saw evolution trader's post where he said that he too finish the day at about 10:30 - 11:00, I don't see any good reason to trade after that hours, and also I've got tight schedule in my life so I don't have any more time..

My focus now is on 3 milestones:

First milestone - To get to a point where my R(risk) is 100$, this should be tough, since my R now is 20$, I plan to higher it by 5$ every week starting two weeks from now.

Second milestone - To get to a point where my R is 200, it will be hard since I don't have th capital yet to support such a move, so I'll have to dig into my savings to find it, or just earn it on the way to the point where my R is 100$.

Third milestone - To get to a point where my R is 400$, this is the ultimate challange, as I see it, I can make about +2.5R on a winning day, which means that once my R is 400$, I can possibly make 1000$ a day, which is my goal for now, I'll see how it develops, but I think that 1000$ a day is very good, especially if I wanna do "around the world" travel while trading, I could work few days each month, and it should be sufficent to "fuel" my trip.

So again, why blog? I have all of the information in excel sheets, well I blog because it's one way to keep me disciplned, and it give me a routine to do everyday after I finish trading, it's like signing off trading, I post Daily Journal, and then I cannot put another trade, because then I'll be only misleading myself.

So, I'll keep this blog up to date, until I see that I can be disciplned without it.

Oh and did I say that today that Disciplne is the key in trading? well it is, you have a method, and money management, but the third piece is disciplne, it is the key to make every thing work best, without foolish mistakes, we all should aspire to be highly disciplned, I hope you guys are.

Revelation

Today I'll write about a revelation I had a few days ago, the best month in my trading carrier yet was October 07, and the way it happened is making about 1.5R a day, and that is how much I earn in avarage a per winning day, even thought I'd like it to be more than that, when I try to do so, I just end up messing it all up and either from 4R I get down to 1R, or I go on to losing money.

So my new plan is all about K.I.S.S (Keep it simple, stupid):

I'll just get to my trading day, after my initial trade, I'll put a stop loss, as always, if the trade goes against me, I'll call it a day, if the trade goes my way, I'll take the money, and put another trade, lets say now I'm +1.5R on the day, or even on the border of +1R of the day, I'll put on another trade, now I can lose twice as much (since it will result me to be -1R), if I fail, I finish for the day, if not, good, I've earned money, the key change of this method is, that I don't risk more than 1R a day, which means I can finish the day after losing one trade (not two, since it's too much for futures).

Have a great week!

Ahh and on a personal note, I've just recieved a brand new Mazda 3 phanton blue mica colour, just like this:

I'm so excited, having a new car (replacing the Hyundai getz) is a bless.

Some thoughts..

This was supposed to go as a comment reply to my good friend Asaf (StockHunter), which is doing so well lately, but I decided to write it as an entire post:

It is so god damn hard!! sometimes I get such a frustrations like when I get out of trade that minute later is going my way HARD!

I think that I understand now how trading is gonna be like, I used to imagine it as a fast phase action that last the whole day, but then I realized that it's too stupid to "trade on instincts" , so I set myself the rule of not trading before 11am (so I could see nice setup intraday), and then the rule of trading at home so I could be more focused.

Now I see that I just need to wait, most of the day, for those 3-4 setups that we are so familiar with, and only when they come I should take them, not before, trading impulsively = big losses, trading like an experienced poker player is what I should do, "Fold" most of the day, not being fooled by the market noise, and just wait for clear justification that the trade that I took should work, and take it, get the profits fast, and wait again.

About last month, November, I finished it down, it was a -563$, I've had 8 down days, and 7 up days, but my down days were uncontrolled so I lost more than the 100$ which is my daily stop loss in some of them, it was a month that gave me a wake up call, after being +451$ in October, which was a great month, I felt in god mode, and just ruined the beginning of November, which made it hard for me to recover from the losses, I was actually at -620$ one point in November.

Let's hope December will be better, goal for this month is modest, only 400$, nothing more, little by little, after few up months, I'll higher my contracts size which is 1 right now, I just need the confidence first.

Great day! +238$

Monday was a great day for me, I sold all of my swing positions due to the FED coming soon, the market has gapped up and my stocks did very well, sold most after a nice solid profit.

From now on I'll minimize my "overnight risk" as much as I can, I see that swing trading has given me 1/3 as much profits as day trading futures has given me, so I think that I'll stick to disciplined day trading.

I took only 1 day trade Monday, for a profit of 4 NQ pts (+75.5$ after commissions), I'll post chart later when I'll get my Internet connection home up and running.

Update:

This is the trade I took, I went long NQ at 2217 since I saw that the line I draw (lets call it intra-day resistance) was broken upward, which signal me to get long, I don't think I'd go short on 2214 and lower since it didn't seem like the time for short looking at the other indexes(s&p and djia).

I somehow knew the market will hit the resistance line there at about 2222 so I just sold for a minor profit, but still, profit is a profit :)

I start to see that I'm evolving my own style, or method, w/e you call it, I wait everyday patiently for the best setup I can find, and I take it, usually risking 2 NQ pts to win 4++ points, this is some nice risk reward ratio, and statistically long term the method should work, so some day I'll lose 40$, maybe 50$ after com's and slippage on one contract, but long term I don't need to be right more than 50% of my trades in order to make money (due to risk reward ratio Begin higher than 2:1).

I hope my positive attitude over trading will finally pay off, right now I'm in deep losses due to the initial mistakes of my day trading carrier, and I know that there are a lot of mistakes I shouldn't make again, and this "1 trade a day" method is the most relaxed I can, and doesn't encourage "overtrading", if I'll keep it going well until the end of November I'll start higher my size, and trade more contacts.

Trading is all about discipline, and patience, trading is the best field in the world, you discover yourself everyday, I really love trading, and sure glad my account had enough cushion to land on when I first started day trading and lost Hugh sums of money :)

If my plans continue accordingly I will be able to quit my job about 3 years from now, it might sound far, but I'll only be 26 by then, and hopefully a bit "richer" than today.

Nothin' much..

I didn't trade in the last few days, didn't find the time, today I'll arrive home late, I might try to trade a little when I come back.

I found out that trading require maximum concentration, so I won't trade while I'm at work, and I won't trade if I cannot focus on it, I think that tomorrow will be a nice day to trade.

Taking things easy, this means I don't rush myself into trades I don't feel sure about, I've found out that it's the best way to trade, but I've found it the hard way while losing a lot of money.
Yesterday I looked at my "expectations" xls file, where I fantasize about great results, and my "take is easy" way have conquer it too, I finally not putting too unrealistic results there, for example I want to make only about 300$ this month, sum of money which can be made in a day, right now I'm up 238$ this month, due to the crazy swings actions, if I take for account only day trade I'm up 327.5$.
And still, my expectations are that in about 2-5 years I will be able to quit my job, which means I'll have enough confidence and money in order to trade for a living, now that is a nice goal to aspire for!

Also, I'll try to test if my swing trading is good for my style of trading, I cannot afford myself making money day trade NQ emini and lose money swing trading, I'll give it a go for the next few months, let's see how it develops.

Weekly review. +55$

Well nothing to brag about, this week have shown me that when I obey my rules fully I can make money, while I know that 55$ doesn't count actually as money, it's still not losing money.

I think that by limiting my losses I can actually concentrate on maximizing my profits, but for now I'm happy with the results, my stats for the last two weeks is about 40$ a day on 1 contract, doing the same trading lets say 5 contracts, means making 200$ daily, that is a nice figure right there, but I won't increase size until I will be consistent with my profits for about two months, and then I will only increase my size by 1 contract, taking it easy, I cannot afford such a stress.

Some more personal stuff:

I'm about to buy mountain bicycles Saracen Ariel 2, I'm finally about to be cycling again, didn't do it since I was like 12 or so, last time it was in China going to far away villages, seeing how they live, I love exploring cultures..

Friday skydiving was nice, I did the Fourth level successfully, had some fun in the skydive itself but landed so far that they had to come pick me up with an ATV :) other than that I just relaxed a bit, thinking again about the stuff I wanna do with my 20's.. what I mostly want is to use the time that I don't have real commitment, wife, kids and stuff to explore the world, have fun traveling and seeing other cultures etc..

Have a good week.
Tom

About the blog..

The blog is about day trading stocks, I will do it using all of my two years experience in the markets, and will post some of the trades I take, hope you guys have fun reading it.