Week 8 Summary

First off, wow .... what a storm last night. It honestly sounded like a tornado was passing over my house at 3am. I had the unfortunate opportunity to experience a tornado in Nebraska when I was younger, and everything I remember about the experience was replayed last night. Pretty scary!

OK ... so after my "downer" of a post last time, I have to say I turned things around a bit this week in terms of trading. This was the first week I ended up net positive since I have been there! Now, mind you, I was only up $80, but I will take small victories where I can get them. Perhaps only having one night of volleyball practice this week had something to do with it ... I don't know. Honestly, I think I am ready for a break from that for a little while.

Anyway, here is a summary of the rest of the days:

Tuesday:
I stuggled. None of the stocks were trending or reverting according to what I thought. I remember trading a lot, but I think I ended up down atound $70.

Wednesday:
I told myself I was going to be more selective in my entries and exits. I did not want to trade as much and only pick the good opportunities. I traded half the number of shares I did on Tuesday, and ended the day positive for about $30. I was pretty happy with that.
Wednesday ended up being a pretty crazy day for the company all in all. It was the second highest grossing day ever and one trader in particular had a phenomenal day. He mainly trades BRK.A shares. If you take a look at this symbol on Yahoo Finance, you will see that the share price is around $85.000/share! Needless to say, this trader had been trying to pick the bottom of BRK.A for weeks. He was in a total of 35 shares. (You do the math as to how much capital was at stake). He had gone down several weeks in a row of several thousand dollars.
However, Wednesday was his payday. If you look at the chart, you see the stock ended making a blast upward. His net profit on the day $55,000! In one day! No doubt, he had to endure some pain to get there, but he got there.

Thusrday:
Apparently, Thursday was the "perfect storm" when it came to the trading group. This ended up being the best day in the company's history, netting nearly half a million dollars in one day! There were probably about 15-20 traders who netted over $10K each! Unbelievable!
For me, it was my best day ever. I was up right around $200. Honestly, it should have been a lot more, but I cut my winners off way too early. I was happy though because my losers were small. One trade in particular "paid" me, so to speak. I sold LEH short at the very high of the day and rode it down for over 2 points!
Today, I saw someone top the net profit from the trader yesterday. One trader in one day netted $75,000! Simply amazing!
Needless to say, after the performance the past two days, the company decided to sponsor a happy hour at Freddie's Place in South Austin. I attended even though I had volleyball practice that night. It was great to go there and get to know other traders. I felt like I fit right in.

Friday:
I think I ended the day down around $30. It wasn't nearly as good a day as the day before. Half the really good traders didn't even make it in. They extended the happy hour into late night activities and were too tired. One of them held an overnight position for a profit of $6,000. He doesn't even show up for work and makes 6 G's. This line of work is totally crazy, but I am glad I have given myself an opportunity to go for it!
One really good/sad story. I decided to trade LEH again today after I made my money in it yesterday. I just like the way it moved and trended. Very similar to my trading style. I sold the stock short again at the very top of the day. Needless to say, this could have been a very good trade. Instead, I got freaked out after the stock went lower 40 cents. I just didn't think it would fall the way it did yesterday, so I got out -- a 40 cent winner. Not bad, but not good either. The stock trended down for the entire day -- 7 points! For me that is a $700 winner versus a $40 winner. Micro-management sucks! Other traders tell me I need to make my orders, place my stops and walk away. They like the way I trade, but say I am too active/anxious once I get in a position. That is something I will work on next week.

This weekend I am going to work with the software program I bought and refine some of my entry and exit strategies. I need to be more mechanical in my trading. I keep saying that, people keep telling me that, but I have sit down, look at old data and train myself to know what a chart looks like at the moment I am having to make my decision.

So, all in all, a good week for me. I am definitely not complaining.

I'm a loser, baby ....

So, more than a week has gone by since I have posted. I am a total slacker. I am also a total loser. This is pretty much evident in every part of my life right now.

First off, Kim and I coached our volleyball team this weekend up in Dallas. We did not do well at all. This was the second straight tournament where it felt like our team just didn't show up. After the tournament in Atlanta several weeks ago, we decided to add an extra practice each week. So, we did that. But, honestly, I could tell the girls just weren't into it. The extra practices ended up being a waste of time. Sure, they got a little better, but all in all, their performance this weekend was one of underachievement. I have been struggling with staying motivated to finish out the season. It is hard, especially since I am still struggling at work with trading and would like to work in the evenings to get better. Let's just put it this way. I have been coaching top level volleyball teams for over 10 years and this will be the first year where a team I have coached will not qualify for the end-of-year national tournament. This is a huge disappointment and let down.

So, to make me feel better each day, I go trade. I would like to say that I have continued to do well, but such is not the case. Last week, I was down about $230 for the week. I did not have a single positive day. I also only traded 4 days last week since I was gone on Friday for the volleyball tournament. I was hoping things would go better today, and they did. But I was still negative on the day - $7.

So, I wish I could write that things are great ... but they aren't. Don't get me wrong ... I am still thankful everyday that I chose to change from techie to day trader, but losing takes it's toll. I was telling my wife that I go to work and compete everyday, and lose. Then I go coach volleyball on the weekend and evenings, and lose there too. I just don't know if I can "compete" for this amount of time every week. I am going to have to decide whether to coach this summer or take a break. I might just have to do the latter. Something has got to give.

I do have some trading "trigger" ideas in the pipeline at work, so I am looking forward to trying those out. I still use my 2-day high and low trading methods and those seem to work pretty good for me. I have just been making some stupid trading decisions late in the trading day recently and it blows all the profit I make in the morning. I think I just have too much going on, and need to relax a little.

Oh well, I have started to ramble. Sorry again for the delay in posting. I hope everyone is doing well and hopefully, I can post more than once a week.

Week 6 summary - Micro-Management revelations

I have to say I feel pretty good after trading today. I ended the day positive again. I was only UP $30 or so, but nearly all of my trades were good. With the exception of one or two really bad losers, I should have been up over $100. And if I had kept my short position in AMD from the morning and my long position in GRMN thorugh out the day, I probably would have been up over $300.

Which leads me to my next big challenge:
I feel pretty good now about finding good trading opportunities. That was my biggest struggle for the first 6 weeks. Now, the even harder part, I think, will be managing a winning trade. I honestly don't know how many trades this week I made which I closed as .40 winners only to see them continue on to become 1 to 3 point winners by the end of the day. AAPL, AMLN, AMD, and GRMN to name a few. I tell myself each day, "I am going to hold this one all day". However, when I see the trade go from being a .40 winner, then pulling back to .20 and going back up, I get all excited and say ... "I better get out now, I don't want the thing to move against me again." So, I do. I look back a couple of hours later and I would now be up .80. I have read a lot of articles that say a trader should never do this, but I feel I am exiting the position on emotion rather than rationale.

Which leads me to my next epiphany (actually it isn't an epiphany at all, I learned it at my lost job as well):
Micro-Management sucks!
It doesn't matter whether a person is constantly managing his trading positions or constantly monitoring an employees work, such activity is NEVER efficient. For instance, I become so involved in the price movement of the stock, I don't think objectively anymore. I don't ask myself if there is resistance/support at the particular price levels as I should be. I just see the dollar signs and cash out.

At my previous job, my former (bad) manager was a Micro-Manager. He thought he was doing himself and his employees a service by being hyper-involved in everyone's activities. I can now say that based on my micro-management experience trading stocks, he probably caused himself the same two problems I have when trading:

1. He creates more stress on himself worrying about everything that he is in charge of. If he would just have confidence in the early decisions he makes regarding leadership and assignments, things would probably work themselves out in the long run. Similarly, if I would just have confidence in my early decisions I make in the day and not monitor every tick the stock moves, I would be making a lot more money than what I am now.

2. He probably does not make objective decisions regarding the things he is in charge of. Yeah ... he would like to think he knows more and, because of that, he makes better decisions, but truthfully, the more he emerses himself in the situation, the more emotion he brings to the decisions he makes. Because of that, he continually makes poor decisions and rubs people the wrong way. I can give you my correlations to trading, but I think you can probably figure them out.

There is one thing I can say about my situation which I know he will NEVER do:
1. Unlike me, he will never look back on a situation and wish he had not micro-managed the situation. In fact, he will probably always be thankful for managing that way, saying:
"Whew .... just think what would have happened if I wasn't watching over them like a Hawk."
He may think he made a bad decision, but he will NEVER admit that it was due to his micro-management.

OK ... enough "former manager bashing". I can only control myself and my actions, but it is kind of interesting to be on the other side and see that not only does Micro-management suck for the employee, but it also sucks for the manager (even if the manager doesn't realize it).

I hope everyone has a Happy Easter (for those who celebrate it). No trading for me tomorrow since it is Good Friday. See you next week!

Hello .... Anyone There?

That's what you are probably asking yourselves by now about my blog.

I apologize. I know ... I need to post more as everyone is dying to know how things are going with me, but quite frankly, I just haven't found the time to do it the past couple of days. I need to make an effort to do it, even if it is small. The problem is I have a limited amount of time on my hands, so in my spare time, I am choosing to read about trading methods or the markets rather than blog. I am going to try and make a change and post something regularly. I said this before, but this time, I mean it! However, don't be disappointed if it is only a little paragraph or two.

OK ... with that out of the way, let me get to my life :-)

On Thursday, after my last post, I actually had a really good day. I didn't trade as much and I was very particular about which trades I entered. I believe I ended UP around $50 at the end of the day. My coach acknowledged that even though I didn't trade much, taking off the day before and observing actually looked like it did me some good.

Unfortunately, I couldn't repeat the performance on Friday. I know I entered a lot more trades and I was careless about entry and exit points. However, my coach seemed to be more pleased with me trading more than actually making money, so maybe I was doing the right thing. I believe I was down $70 or so.

Monday was a nightmare ... in more ways than one. First, I lost about $170 .. that sucked. Second, I couldn't concentrate at all because I had a pounding headache. More on that later.

Yesterday wasn't much better as I lost right around $100. In fact, yesterday was the day that cumulatively put me in the hole 1,000 smackers. Congratulations, David! I was doing careless and reckless trading and was pissed at myself at the end of the day. I was trying to trade reversals and bounces off trendline support and it was not working. However, I kept doing the same thing over and over again. I couldn't stop myself during the day, but when the final bell rang, I reflected and figured out that I was a moron. I made sure I was not going to do it again today.

Today, I finished UP around $40, and did a much better job of controlling my trading emotions. I didn't trade nearly as much which was actually bad for me. A lot of the trades I held back on would have been pretty big winners. Regardless, I figured out today what works for me and I going to finish up the rest of the week trading this way to see if I can be consistent.

So ... what is my revelation you may ask? A fellow trader let me borrow a book of his which I read over the weekend. The name is "The Stock Trader" by Tony Oz. Although this book was written in 2000 when stocks moved 20 points in a day, the principles hold true in today's trading. The whole premise of the book is to spend four weeks trading with the Tony Oz. You follow each one of his trades. He tells you what he is looking at, what he bases his decisions off of, and what his risk/reward ratio is. He doesn't use any fancy indicators, just simple support and resistance ... and it works! That is what I have based my trades on the two days I have been successful. I strayed the other days and recognized my ways.

So ... here I am. A math and numbers guy, thinking I am going to use all these different technical indicators and oscillators because I know how they are derived, and the one trading style that makes me money is the simplest style there is ... chart reading for support and resistance. It is actually quite boring. But exciting when you can end the day in the black.

So ... what is my next step?
I am going to continue trading this style and see how it works for me. I am going to be a little more aggressive with it than I have been the two days I have ended the day positive. It should still work as long as I do not become too impulsive.
Meanwhile, I ended up purchasing the $150 piece of software and am going to work on building a system that can also help me throughout the day. This will be fun as I can come home in the evenings and do some programming. (I actually kind of miss the software side of things .... not the bureaucracy ... just the technology). I found a deal with a market data company that will supply me with 120 days (1-minute) backfill worth of stock data for $30/month. This is to substitute for the $10/month deal I had with my broker. I don't have to pay any expensive exchange fees because I am not getting real time data .. that is the trick. And as far as I know ... this is the only data service that can let me do it. So that seems to be working itself out.

All in all, I have to say I am making some progress. That may all fly out the door with another losing day tomorrow, but I feel good right now. The one bad thing is I have had terrible headaches everyday this week. I think it comes from staring at a flashing computer screen all day. Not only that, the lights are real dim where the traders are, except where I am sitting. There is a pretty strong fluorescent light above me and to my left. I have been noticing my headaches are just behind my left eyeball .... and they hurt. So ... I have dimness/darkness on my right and a bright light on my left. I am going to start wearing a cap to work and see if that helps shield some of the light. Of course, this will only add to my accelerated loss of hair, but if it saves my eyesight and spares me from headaches, I just might have to do that. I am also looking into changing where I am sitting. Maybe that will help me as well.

Anyway, I hope everyone is doing well. I also hope this entry tides you over until the next one. A big "Thanks" to all of you who leave comments. You are my motivation to continue documenting this journey. Hopefully, there will be more positive entries to come!

Pain and Confusion

For those of you who have been waiting for a long post .. you are about to get one. I finally have some time this evening to share what has been going on with my trading job. Of course, I will have to quit when American Idol starts, but I will see how far I can get.

First off, this is the most mentally challenging job I have ever experienced. I can't believe the frustration that takes place when I make losing trade after losing trade. Tuesday was especially rough for me. My winning percentage was a miserable 9%!! Yep ... you read it right. 9%!! That means if I had picked the other direction to trade the stock, I would have won over 9 out of 10 times. My performance is absolutely pathetic. In total, I was down $190 on Tuesday. For some reason I kept envisioning the scene in Rocky III, where the ring announcer was interviewing Mr. T. The announcer says, " Clubber, what is you prediction for the fight?". He looks straight into the camera snarls his lips and says ... "Pain". I just imagine someone playing the role of the stock market and saying the same thing when asked "Mr. Market, what is your prediction for David's performance today?" One word .... pain.

Needless to say, I tried not to get rattled, but Tuesday's performance combined with a 31% win percentage performance on Monday really had me a little gun shy this morning to start off with.

However, I told myself I had to work my way through it, so I placed my first trade. Literally, no sooner did I place it than the position jumped against me by a dime. Two seconds and I was already down ten bucks. (I am still onlly trading 100 share blocks .. thank goodness). I immediately got out. If I held the trade until the end of the day, I would have made $90. It spiked against me, I freaked out and closed the position. It is true when they say that trading is mostly mental. I didn't trust myself largely due to the poor performance from the past couple of days.

The next trade .. the exact same thing happened. No kidding. By now, I was so upset and frustrated with myself I couldn't stand it. I looked for another trade and told myself I was going to do the exact opposite of what I thought I should do. About 10 minutes later I found one. I placed the trade, and you guessed it .... it went against me too. By now, I was hearing Mr. T say "Pain" .. so I stopped for the rest of the day and watched the market. I looked at several different tickers/triggers for trading opportunities. I took lots of notes in a spiral notebook which I am going to review tonight. I really studied what was going on, and I feel like I can do much better tomorrow.

I felt good about making this decision, but my coach was not happy. I only traded 600 shares today and he proceeded to tell me that I must trade more and figure out what works and what doesn't. I understand where he is coming from. He mentioned the person who was there before me (but has since quit) had a similar analytical background as mine and she overanalyzed everything. I told him I was aware that this might pose a problem for me, but proceeded to tell him exactly what I thought. I told him I wasn't learning anything about trading because I have not been able to learn from my mistakes. I keep doing the same thing over and over again. You would think that it is simple to stop, but it isn't. I need to be able to spend time after the day to review my trades and I haven't had the time to do this. I told him I was taking notes today and reviewing it this evening to see if there was something that could help me from making the wrong decision. He really didn't buy my line of reasoning. He feels the only way to get better is to get in there and trade and work your way out of it. I respect that, but if I am beating myself up when I do that, I need to do something that makes me feel good about my progress, and that is what I did today.

I want to draw an analogy to volleyball coaching with this situation. When I am teaching a player to pass (bump) the ball correctly, I don't just tell them "Pass into the basket." I give them constructive and technical feedback as to how they achieve this goal better. I understand that as a player you have to teach yourself what feels good and what doesn't and make yourself better for the most part .. the coach can't do that for you. The one way you get better is by repitition ... there is no doubt. But I have also noticed when I was playing there were times when less was actually more. Going to watch a volleyball match or visualizing what to do, helped me more than actually practicing. I would like to think that is what I was doing today. Perhaps I should have shared this analogy with my coach .. I wasn't that quick on my feet. But I will be sure to remember next time (if I am able to improve my performance tomorrow).

Regardless, I am little disappointed my coach didn't really offer me any type of technical feedback of what I could improve on. He simply said I needed to trade more and left for the day. I suppose this is like me saying to my volleyball players, "OK ... keep passing into the basket. Oops .. that one didn't go in ... keep trying." I don't think I would ever say that. I would try to help them fix it. Maybe I should have asked him to review my trades with me at the end of the day ... I don't know ... he seemed in a hurry to get out of there. Plus .. the last 2 days combined ... he is down over $6000. I am not sure if now is the right time to be asking him for advice. Don't get me wrong ... he is a nice guy ... but I don't know if he will ultimately help me become a better trader. I think that is something I am going to have to do all on my own. And I felt like I took steps toward that today.

So .. my plan for tomorrow and the coming days:
1. Review the news in the mornings and write down stocks I think should be active during the day. I actually did that this morning but didn't act on any of my "predictions." And ... who would have guessed .. they would have paid off big. I wanted to buy "Casinos" and short "Restaurants". Coulda, woulda, shoulda .... there is always tomorrow.
2. After each trade I make, I am going to keep a journal and give the reasons for getting in and out of each trade.
3. I am going to review the journal each night and see if I can see what went well and what didn't.
4. I am going to read for at least 1 hour each night to learn new trading strategies and mental techniques to stay sharp, focused, and positive.

So ... there you have it ... my new roadmap. I am tired of hearing about how being analytical is going to hurt me. Screw it! I am just going to work harder than I ever have in my life and prove to my coach and everyone else that I can be successful. It is not about analytics but hard work and effort. I am going to do it!

Maybe tomorrow

I know .. I haven't posted in a while.

My main excuse is that I was in Atlanta from Thursday through Sunday. I got back at 11:30pm Sunday night. By the time we picked up our dog and unpacked, it was almost 2am before I got to sleep. We were in Atlanta for a volleyball tournament. Two things:
1. The team we coached played horrendously, and
2. I don't like Atlanta
I am glad to be home.

Yesterday was brutal trading again. I was down $150 for the day. It is simply amazing how many wrong decisions one person can make. Within my first four trades I was down $70 ... in a matter of minutes. I think it might have to do something with sleep because I was really tired. I need to make sure I get enough sleep each night. I remember last Sunday when I couldn't sleep, I did really bad on that Monday trading. Hmmm .... maybe it's just Mondays. I am going to try to pay more attention to volume and sector strength today as I completely ignored them yesterday.

Anyway, I will try and post more later this evening. I need to get ready to go to work.