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12/20/18

Return of Volatility

Like most traders who risked their own money in the market, I have lost my fair share of "tuition money" learning how to trade profitably. I spent enough money and had just enough success to convince myself that I could trade for a living. I saved for over a decade for a (very) modestly sized trading account with the intent to trade full time in 2017. In my anticipation to trade full-time, I have been sowing the seeds of my bearish biases to the bullmarket.

Needless to say, a bearish sentiment in 2017 was not good for my trading account. I had a few short-lived winning streaks followed by massive losses. As 2018 comes to an end, I have given a lot of thought about what happened in 2017. In short, I learned that I am not the cool calm pure technical trader I thought I was, or want to be.

2017 was clearly a bull market, technically on a monthly chart, it was as clear as day. I never bothered to look at the big picture as to what was happening, I stubbornly stayed focused on day trading from the perspective of a daily chart for an overview, and used a 5minute chart for initiating my trades. On the surface, there is nothing wrong with the way I was trading, the issue comes into play when the majority of trades I was taking in a bullmarket were short trades.

I became fixated on wanting to daytrade in a bearmarket. For a guy who took pride in using technical analysis realized that most of my successful "daytrades" occurred when I was shorting into a down market. I began trading in 2002, I cut my teeth daytrading with real money between 2003 and 2008, my first real profits came quickly on short trades, my winning percentage was well above 50% and I was taking these wins for granted.


I also took the volatility for granted, as the market was nearing the great recession before it was obvious to everyone, the housing market was doing well, banks were offering CDs as high as 5% for 12 months, all was good. The secret sauce to my quick success in trading I owe to volatility in a market that was trending downward. Having the basic knowledge of technical analysis and the confidence to risk real money, I became the biggest advocate for all things "technical analysis", just do a search on Trin Café to see how much of nut I was.

Fast forward a decade, I am firing off real trades with real money and size and the volatility in 2017  decreased dramatically as indicated in red, in contrast to the highlighted green area where the VIX was well above 25, it was not just some random chance that my best [short trades] occurred during this same time.


Vix 2002-2018




The truth is, I have been a bear trader pretending to appreciate going long or short, my bias for taking bearish trades began on the first profit I ever made trading. If you have shorted a stock or a futures contract and been rewarded with instant profit, you can relate to the euphoric feeling of being right. I now know that my bias to short has never left, I'm not sure if I can ever claim to not have a bias. With all of that said, my current trading has been doing well the past few months, notice how the VIX has popped up since October.

In October, the market began selling off, the same time my bias ass trades started working and paying off. Unfourtantly my account is too small to trade with any real size, perhaps that's a good thing? Trading options with a small size can serve as a humbling reminder of who I am and who I am not which will lead into my next post about how I plan on trading into the next decade.
October began the return of volatilaty... and profits for a bear like me.

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5/29/18

May 28th 2018

I cut my losses on previous AAPL options positions. The Bull Put on AAPL 185/175.5 PUT Option expires June 8th, it still may be profitable, the break-even was AAPL @ 183 by Jun 8th expiration.
I'd rather close my long position and prepare my portfolio for a potential negative downturn. I've been bearish for damn near two years, looking at the Geopolitical landmines coming up with the Russian investigation along with Euro stress from Italian political turmoil has me cautious to the upside. We have three choices as traders, go long, go short, or do nothing and sit on the sidelines.
For the knowledgeable options traders out there, yes there are strategies that can make money options trading in a low volatility market. I believe betting against high volatility is a recipe for disaster in the long term.

Portfolio
YM September PUT 24600 Strike
FXE September PUT 110 Strike
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5/4/18

Managing A Winning Trade Is As Good As It Gets

As I type this post, I feel fortunate to be able to just sit back and manage another winning trade. I am experimenting with how I will continue blogging here at Trin Café. As many of you know, the time and motivation it takes to post and the mental gymnastics required to keep the psychological aspect of trading in check is a daily grind. Posting on Trin Café has served as a therapeutic and creative space for me to share my thoughts on trading and as I said before, I appreciate the interaction with other retail traders which are a rare breed.

Good read: Jesse Livermore on Emotional Control By  in Trading Performance and Psychology
"A trader can never become complacent. Livermore was always alert, ready, prepared to separate himself from the popular thinking of the moment, the group thinking that usually always drives the market, and to go in the opposite direction. Livermore believed in cycles. There is a time when things are good and a time when things turn bad. It is true in this life for all of us, and it is true in the stock market. The good times are coming and so are the bad times—the question for a successful trader is not will they come…it is when will they come?"

I'm thinking of putting more detail and effort into my charts and less time into actual blogging, I might be able to articulate what I am thinking while I stair at candlesticks? Chart porn is really a thing check it out.

YM 1 min Chart, letting a winner run while locking in a profit.

5/4/18


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5/3/18

Getting Cocky 5/3/18

https://unsplash.com/@clark1

Let me paint the picture for you, I put a trade on within 5 minutes of turning on my computer. As I was getting out of the shower I heard on the radio that the DJIA was down 100+ points. Did I mention my wife and my toddler and I were about to leave the house this morning? The YM was hovering around a support area, within 5 minutes price dropped below support and I quickly executed YM short @ 23679. My entry was automated to enter a target @ 23679 which happen to be the next area of support and a stop @ 23730. I anticipated being stopped out for a loss and then the market would sell off without me.

So what's so cocky about that you ask? Now it's time to go take my kid to daycare and my wife to the
hospital who's been having baby contractions all night. With my trade working, I felt confident my(big) stop order was in place so my risk is baked into this trade. So, after dropping my kid off,
and checking my wife into the hospital, I had a chance to check in on my trade from my phone

(in the hospital by my wife's side) to my surprise and delight, the trade worked well for a 100 point $500 profit. As I typed this, I was in the hospital with my wife not monitoring the market action, the last time I checked, the market was down 200+ points, I managed to capture 100 points. And yes, I was done trading for the day.

Big wins are hard to hold on to when discretionary trading, often too often times the ego and subconscious will increase the risk soon after a win and ruin previous profits. Being right and making quick money triggers a chemical reaction of dopamine that can be addictive. It takes a lot of experience and losing trades to understand how destructive trading can be. I am making effort to humble myself, the truth is, one big winning trade is a drop in the bucket for all the years of small and massive losing trades I have experienced.

I hope retail trading was good to you today as it was for me.


YM 5-3-18
5-3-18


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5/2/18

A Lot Of Trading Luck A Bit Of Skill?

As I type this my latest YM short is up around 60+ pts, then I was stopped out with a 39pt profit, I  am going to avoid being greedy, I admit that for me, greed and good aggressive trading is a very thin line. I have made multiple trades today while locking in profits and minimizing risk.

Trade moves further down without me, but I am ok with that, right now YM is testing S1, that's an additional 67 points I could say was left on the table, the truth is the money always belongs to the market until you close your position and access to trading screens. With that said, I need to close down my screens and post this before I give back my $145 profit to the market.

Good trading all.


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4/25/18

Day Trading Trading Through The Rust

Add caption
Tried to short YM 23827 hoping for the selloff to continue, then I began suffering from FOMO again and tried going long a few times. I made back some of my loss with my last and final trade that captured 49 points. I will call today's trading a small victory, despite being down 1,177 on the YM, I was able to manage my last trade and stop trading when the market appeared to be stuck in range/chop territory. YM being under 24k I believe to be significant, hope to be in the zone when/if the market sells off further, I'll be back at it on Thursday.


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6/1/17

I can name a dozen different things better than staring at charts




Back at it again in the office for a few trades after the Memorial Day break. I took one trade more than I wanted to, fat finger a short in CL, I closed it quickly for a breakeven trade, ironically, it continued moving down, No regrets, I'm working on trading only the morning session, if the position is working past lunch, I will stick with it until a profit stop is hit.
I can name a dozen different things better than staring at charts
  1. Cutting the grass
  2. Walking the dog
  3. Lunch
  4. Working out
  5. Preparing a good dinner
  6. Cleaning the car
  7. Clean my office
  8. Learning how to be more efficient in Ninja Trader
  9. Search Twitter to see how other retail traders are doing
  10. Pay a visit to my favorite blogs
  11. Plan a European vacation... more on that in another post
  12. Call a friend or family member

"Better Trading Ahead!"
Great works are performed not by strength but by perseverance. - Samuel Johnson
Read more at: brainyquote.com


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5/19/17

Committed To Better Day Trading Win Or Lose


Today was a good day! As I typed this, my position was down 10pts, my execution was as planned. I'm claiming today as a good day win or lose because I am very confident that I will be executing my trading plan/method as intended (always room for improvement). I will not and can not blame the market if the CL trade does not work, or anyone else, I accept the fact that the best trades that meet all the criteria will not be profitable 100% of the time, or even 50% depending on the market conditions.

An excerpt from my introspective journaling
"Take pride in the execution.
Take pride in my resolve.
My self-worth and value are not based on if this trade works or fails.
Committed to zero whipsaw trades
."
Iran Iranian elections are taking place today, could this be impacting the market today, maybe today was a day better not traded? If the trade works, would I still have all these same questions or would I just sit on my high horse and marvel at my technical analysis skills? 


Notice all the words of negativity, it takes a resilient effort to think and speak from a positive and factual frame of reference when facing adversity.

Doubt:
maybe today was a day better not traded because of the Iranian elections?

Facts:
Trade was based on my trading method that governs my entry, ATM strategy automatically executes predetermined stop loss, time frames, and area of congestion identified before trade execution. My decision to trade wasn't based on Iranian elections. I reviewed the economic calendar for potentially market-moving news.
_________________________________________________________________________________

Better Trading Ahead!
During and after each trade I am taking notes and jotting down ideas about how I can improve my trading, rather it be in my trade preparation, or in how I manage my screens and trade executions.

Benjamin Mays"The tragedy of life is often not in our failure, but rather in our complacency; not in our doing too much, but rather in our doing too little; not in our living above our ability, but rather in our living below our capacities."
- Benjamin Mays





Instrument: CL Jul'17Lot Size: 1

Total # of trades: 1
Percent Profitable: 0%
Avg. Winning Trade: $0
Avg. Losing Trade: $159
# of winning trades: 0
# of losing trades: 1
# of even trades: 0
P&L Total: -$159

CL 5/19/17

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5/15/17

How And Why Technical Analysis Fails

Photo by Devon Janse van Rensbur





Getting Technical 

For those who have been following TRIN Café over the years know that I have put a lof of emphasis on using technical chart patterns to guide my trading. If you are a beginner trader or have years of experience with technical analysis, I wanted to illustrate how and why the popular trend line in technical analysis can be misused and potentially dangerous to your trading capital. The purpose of technical analysis is to be able to determine the direction of future price, most of us are looking to identify a trend in our perspective trading time frame of choice. Trading your own money is a thrill in the beginning, but when you are trading for an income, all the thrill needs to be removed from the equation. 

If you find yourself in a trade and your heart is beating faster, it's probably a bad trade. The not so secret to avoiding bad trades is by first identifying the trend in your time frame. In the below chart, the time frame is a 5 minute candlestick chart. The trendline drawn is clearly pointing downwards, the temptation to short CL could be also justified by how price broke below the area of support as indicated by the chart (R3).

As a technical trader, we need to take into account that as of 10:40am on the chart, CL is up 2.59%, is this a potential huge selloff, a prelude to a monster day that would be a chance too good to pass on...? These are some of the dangerous thoughts that pass through my head, they are only distractions to what is happening beneath the surface of the chart.

The Facts

CL is in the green, hoping to be the smartest person in the market by trying to short the tremendous bullish sentiment could make an impressive profit, unfortunately, that hope has nothing to do with good trading. Support & Resistance (S&R) are highlighted in the yellow zone, expect this range to be the area of congestion for the day, profits can be made in this area, however, trading in chop is not the same as trading with the trend. At 11:00am, the price is still trading in a congested range, hovering near R3. The justification for shorting anything below R3 support could have been made based on the downward trend line, and the previous lower highs and lower lows, you would have only found yourself trading in congestion hoping for a price breakout.

CL 5/15/16



















What's Next?

Now that price is still moving sideways, what is left to do... try focusing on news and market fundamentals to determine why the market is sideways maybe? It doesn't matter, all that matters is what price is doing at the moment, we don't need to know the fundamentals of what we already know.
In the past, I have waited until the very end of the trading day waiting for an opportunity to put a trade on, sometimes with success, and often times leading to over trading and big losses. Mark Douglass, author of Trading In The Zone explains the four primary trading fears, my biggest trading fear is the fear of missing out.


“Ninety-five percent of the trading errors you are likely to make—causing the money to just evaporate before your eyes—will stem from your attitudes about being wrong, losing money, missing out, and leaving money on the table. What I call the four primary trading fears.”


I've learned that my zone of focus lasts from market open until lunch time; if I have not put a trade on, that means the market is congested. I am aware that after the NYC lunch hour, it's possible the market may have a monster move, but I have to be content with trading well within the limits of my own zone.

Update: I wanted to capture the entire day's price action before posting this analysis. The price remained choppy the entire day. Profit "could" have been possible, however, words to avoid when trading your own money are "could've, should've, would've" just to name a few, these kinds of words project regret that can sabotage the best intentions of trading well on the next trade.

CL congestion lasted all day.


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5/5/17

Bad Habits Die Hard!


I am my worst trading enemy. If I stare at a chart long enough, I will be able to find something to trade. If I am speeding up my charts from 15min to 10min, to 5min, to 1min, I am probably in a bad trade or looking for an excuse to get into a bad trade.

Tunnel vision leads to being down  -338 to -1,276 Now I am in recovery mode, hoping to break even and to swear that my over trading days are done... or quit trading altogether.

Traded like a pure amateur today, I ignored the overall trend and exposed myself to massive losses. Now the only thing to do is wait for when I find where I say uncle and cut my losses. That walking away [mentioned earlier today]from the computer never happened, my 1st CL short today was a decent entry, however, I was selling into a very bullish day [duh], still deep in a choppy trade that's going sideways dragging me out to sea.

Losing money is not the issue for me obviously, it's not wanting to miss the big trade. Apparently, I was not content or satisfied with yesterday's win after I watched how far the market sold off without me in it, and it has come back to haunt me in today's trading.

Some changes in my mental approach to trading will have to happen.

I'm ending the day with a loss, and I honestly feel better that I did not dig my way out of today's choppy trade. Going forward, having a memory of making a profit while not trading well will invite the temptation to do it again some day, one bad trade is all it takes to ruin your trading capital. My mentor told me a long time ago that the worst trades are the bad trades that make a profit.

"Better Trading Ahead"

Total # of trades: 13
Percent Profitable: 53.85%
# of winning trades: 7
# of losing trades: 6
# of even trades: 0
Total: -$1,146


CL










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Avoid Trading In The Chop: Update (Did it myself)

I felt like taking the time this morning to show a chart that appears to be nothing but chop to me (As I type). Please keep in mind that what one trader sees as chop, may be a buying or selling opportunity for another. Time will tell, at the end of the day, I will post the YM chart to see how the day ends. As for me, I will keep the powder dry until next week.

I'm still learning that news is not the deciding factor on how I will trade. US economy added 211,000 jobs in April; dollar rises. The jobs headline would indicate a monster bullish day right? Well maybe it will be, but as of now, it's (YM) sideways, not the kind of price action I want to be stuck in. Avoid the chop.

It's Friday, I will enjoy the lifestyle of trading for a living today.

"Better Trading Ahead" Not today.

YM

YM






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5/4/17

CL Trade Analysis

I made a profit today trading CL, but I honestly had to work a lot harder at it than I wanted to. Not the kind of trading I say I do not want to engage in. As a trend trader, it's difficult for me not to get tunnel vision when I think I see a trend in the chart. Take a look at the chart for yourself, I see a descending triangle begging me to short it, notice how many times I traded today...
I was about to go into another shoud've, would've', could've rant, like how CL "could" keep selling off without me riding it down. But I have to remind myself that trading is a lifestyle for me. Make a profit and move on with my day.

As I wrap up this post, CL has sold off more without me in it... I'm grateful I can walk away with a profit and not a huge loss.

Thanks to those who have followed the blog and have reached out with support.

Lot Size: 1/2
CL: +$373

Update: Forgot to mention the quick YM trade that I hopped out of for a win. 
Another trade that falls into the category of  shoud've, would've', could've.

Lot Size: 1
YM: +$1

Total # of trades: 10
Percent Profitable: 70%
# of winning trades: 7
# of losing trades: 3
# of even trades: 0
Total: + $374


"Better Trading Ahead!"

CL


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5/2/17

Todays Trading Summary: YM/CL/ EXEL Option

I'm ending my day with a small profit, but I clearly over traded today. It's a small win for me that I decided not to trade anymore today.

Full disclosure: I also trade options, when my daytrading is not going well, trading options gives me the opportunity to take some time off from the daily grind.

Correction

I'm ending this day with a loss. Took another CL trade that went aginst me and hit my stop. Began the day with a quick decent profit, kept trading out of fear of not wanting to miss the big monster trade I have in my mind.

Easy Trading

The kind of trading that is quick and easy. I will have to mentally prepare myself for only taking easy trades... How do you know it's an easy trade or not you ask? 

Well, if you have taken the time to trade what you see based on good technicals, you should be able to get into a profitable trade that's working fairly quickly. The hard part is not to get in the way of a trade that is working... see CL chart below for example. If you have to take multiple trades to get back to even, your better off waiting until the next day to trade again. Tough trading comes with tough losses.

I have to remind myself that my trading is a lifestyle, not the end goal just to make a lot of money or to always be right. I still believe that by trading well and allowing myself to be in the zone, the wins and money will follow.

Lot Size: 1
YM: - $28

Lot Size: 1
Option: EXEL Jun16'17 25 Call
EXEL: -$7


Lot Size: 1
CL: -$48


Tota l# of trades: 10
Percent Profitable: 20%
# of winning trades: 2
# of losing trades: 5
# of even trades: 3


Total:- $83



"Better trading ahead!"

YM
CL
CL


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4/20/17

A Better Trading Day: Update 1

Today I was committed to adhering to my rules and trading what the market was willing to give, without risking too much of my profit. As I type this, the market is rising past my previous exit, but that is ok. I'd rather take pride in trading well for a profit on a consistent basis than trying to squeeze every drop of juice out of the market. We all know how over trading can turn a profit into a huge loss.

Better trading ahead!

Lot Size: 2
Wins: 1
Losses: 0
Win%: 100
YM: $252
Total: $252




Update: 


A huge up day, it would be easy to say that I left a lot of points on the table. As a professional trader, the emotion of regret is a what causes over trading, giving back losses, in exchange for a massive loss. Unfortunate for the traders who bought the YM at a high and were stuck in their position hoping for it to reach a new high, I easily could have been stuck in a trade/loss if I would have jumped back into the market.


Better trading ahead!


YM






YM update: An exercise in sitting on my hands.






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4/19/17

Missed Big Opportunity

Traded today's big down day too fast, will wait till next week to trade again. These are the kind of days a trend trader needs to take full advantage of.

Better trading ahead.

Lot Size: 2
Wins: 17
Losses: 13
Win%: 56.67
YM: $197
Total: $197

YM

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4/13/17

Trading Results YM

Committed to trading well today. 1st trade I kept a tight profit stop, 2nd trade I allowed the trade to work in my favor until it broke previous support (S1) and hit my profit stop.

Lot Size: 2
Wins: 2
Losses: 0
Win%: 100
YM: $254
Total: $254

YM
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3/7/17

Retail Trader Beware

Do you remember the days of identifying a trend and then riding the momentum  to a decent profit? Current market conditions will easily shake a bull or bear out of a profitable position. Im reminding myself that securing profit is better than looking and holding for the big trade. Traditional  technical analysis will not work in this volatile market. A retail trader has to identity the momentum and take what they can get and get out while they still can. Avoid getting whipsawed, and the massive losing trade... advice I try to adhere to myself.

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2/23/17

Party Like It's 1999!?

As a technical trader who prides him self on catching the big trend, I can confess that this bull run has left me in the dust. In 2017, I never expected the DOW to reach far above 20,000, in fact, my entire strategy for 2017 was to be prepared to short the guts out of the market... surprise surprise, pundits are talking DOW 30,000 in the next four years.

This is the kind of market J. Livermore wrote about, being able to be long in the market even when it feels difficult. That is easier said than done, market has away of scaring both bulls and bears out of their positions.

I met a guy who explained to me how well he did in the stock market back in 90's. He casually told me he would just buy, and buy more when the market dipped. Not a bit of technical analysis, he didn't even know what technical analysis meant. Just buy blindly.

Well, we are who we are, I will remain on the sidelines until until until I see a clear bearish trend.

Enjoy the rally! 

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2/3/17

A+ Trading

My goal is A+ trading today, I will be one and done. YM profit stops are moving in relation to support and resistance, DJIA 20000, that was a target, I will just let the market determine where I get out at. That's technical analysis.
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1/23/17

1/23/17 Trade

YM Futures Contract

NQ Futures Contract
ES Futures Contract

YM trade good for 49 pts, my ideal momentum trade, Pivot was broken on the YM, NQ and the ES. As I type this, the market may continue to selloff, I'm not chasing it after already making a profit, I will wait for my next trade maybe later this week?

Good trading to you all!
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