China Slow Down?

CNBC headlines China exports falling 20%, it should be a lively day of trading to end the week.
Hope you all trade well today!

- Trin

Read More »


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.

Read More »


How A Daily Journal Can Save You Money Trading In The Stock Market

A lot of day traders including myself use a blog to express their trading experience as a form of self-help, a form of review and self-reflection of the trading day in an effort to improve our self's and our trading. However, there are aspects of our lives that may be affecting how we think and act; bottled in our minds if we know it or not. Some days we feel motivated, and positive about our future, "life is good". And then we all have those days where we would rather just be alone with our own thoughts to try and figure it all out.

Tim Ferris author of "The 4 Hour Work Week" wrote here a good description about the importance of using a journal, he provides (his) two very simple reasons for doing so below.

1. I’m trying to figure things out, and this might help.

2. I’m just caging my monkey mind on paper so I can get on with my F#$@! day.

I especially like reason number two, if trading success has been a challenge, it's probably safe to say that you have dealt with some extreme emotions. Without taking the time before putting on that first trade, you are putting at risk your capital without understanding your current frame of mind. How many trades have you taken that you regretted taking because you know it is not part of your trading plan... so why did you make that trade?

I will venture to say that by using a daily journal as part of a daily routine before putting on that first trade may be as important as using a stop order. To journal your thoughts, current emotions and motivations before taking that first trade can be like using a "mental stop" (I just coined that). Unlike the average Joe/Jane who punches a clock at his or her 9-5 job, not enough sleep or a bad day generally, will not affect how much money they make or lose. As day traders, we do not have that luxury.

"Be careful of your thoughts, for your thoughts become your words. Be careful of your words, for your words become your actions. Be careful of your actions, for your actions become your habits. Be careful of your habits, for your habits become your character. Be careful of your character, for your character becomes your destiny." — Chinese proverb, author unknown

Read More »



Now that the U.S. elections are a thing of the past, markets have clearly determined to go higher, enlarge part without me on board. My usual indicators to get short or long have been weak to non-existent. I don't remember seeing this kind of volatility for such an extended period of time, I would be interested in knowing how current volatility compares to the previous ten years of market data.

Is this the new normal?

As a contrarian type trader, I am still waiting for if and when the market pulls back, the correction will be a substantial one considering how far the market has moved already. This is one of the longest bull markets in history, I'm hoping to be dialed in and ready for if and when a selloff occurs.  

As I am reminded of the lessons learned by Jesse L. Livermore, I will adapt to the current market conditions.

Here's what we can expect now that the Dow has closed above 19,000

Read More »


My First Paycheck

It feels kind of embarrassing to admit that I have never paid myself from any of my previous trading profits. I think my excuse or reasoning was that I didn't feel an urgent need for the money. For years I have been able to just rationalize that, "I'm building my account" or, that the capital I was trading with was just a trader's "tuition". This logic is flawed for many reasons, the main one being that it leads to bad habits. By not taking a predetermined % of profits, I'm putting profits at risk. I don't know if you can relate to this, but I'm subconsciously telling myself I can take a risky trade or even worse, take a trade not within my method ...also known as a bad trade; all because I view the profit in my account as "house money."

I'm not funding an expensive hobby, this is my business.
Read More »


Retail Trader's Emotional IQ

Read More »


CME Trading Simulator...a joke.

If you're reading this, you are probably killing time, I got you covered. See if you can beat my high score of $2,133 $3,584. CME group website offers a very unrealistic trading simulator that gives you the option to "hedge" or "speculate", I played as a speculator.

Post your high score in the comments lol.

Click here for simulator.
Read More »


Big Money On The Move

Like every other trader, I like to think I could have been astute enough to get a chunk out of Thursday's market action.

As I go through my routine of manually reviewing my method against the chart, I know that I could have easily have gotten crushed. The market volatility would have punished the greedy. For example, trying to short the YM (Above chart) at 0945 would have immediately faced a 100 point pull back! My goodness that's scary and humbling to even imagine being on the wrong side of that trade.  

Not a market prediction, just an observation. I'm trying to avoid predicting what will happen next, I know as a trader/speculator, that's kinda of what we do. Let me try to explain myself. I want to develop the habit of emotional detachment from what I hope or want to happen in the market for the sake of being able to react appropriately to what is actually happening.

Read More »


Know Your Bread & Butter

My bread & butter type of trading!
After over a decade, I have had a enough day trading success that I still believe that there is a chance for myself to trade for living. In my trading (most years) experience, I have also been humbled many times about my lack of ability and emotional/capital limitations are for day trading. My method and appetite for risk dramatically limits the amount of "good" trading opportunities that I feel comfortable taking.

On days where the DJIA moves 100 or 200 plus points, I feel it is my duty to be "in the zone" to take advantage of the these kind of limited opportunities. Markets can go for weeks in choppy trading conditions... coincidentally, where majority of my capital has been lost.
30 Jan 2015
As I am not yet a full time trader, I can only dream about the realities of waiting for the best trades. I expect the day to day waiting to trade will be a boring grind, I'm ok with that as long as I can be consistent with taking the good trade and true to my method and sound money management principals.

30 Jan 2015 | Not my Bread & Butter (B&B) trade. Low ADX keeps me from getting in.
-- I began this post without looking at any charts, under the assumption with today's big loss, there must have been my ideal trading conditions that fit into my method. After reviewing the charts, I was dead wrong on my assumption. I can admit that I easily could have easily been whipped-sawed as I could have shorted right before each retracement,  my stops would have been hit with today's glorious volatility for sure.

 Had to dig up a good example of my Bread & Butter (BNB) conditions. A thing of beauty when it ends with a profit.
Note: I rarely share what my method is, or how it works. Methods are as personal as a tailored suit, maybe after years of trading success, I will consider writing the book, so for now, my method is primarily technical analysis with the use of DM indicator.

Good trading!

Read More »


When is it time to panic and take cover?

Choose your side.
Unfortunately, the way the market works is that most people will not reap the benefits for staying true to their convictions of using some kind of technical analysis, and decent money management principals, rather we give into fear and the heard mentality. My self included many times before have strayed away from my original plans to only regret not following through, followed by would've, should've, could've.

The purpose of this post is for my own visual reference, a moment to tune out the pundits and the news to see what the market is doing for myself, not to be swayed in one direction over another. As much as I would like my bullish positions to skyrocket, I can't be blinded by my own wants or dreams.

ES 1/13/5
The way I see it, we are days or a week away from the market selling off further, or holding true to the trend-lines I have drawn on the above chart and pushing higher. If ES is your instrument of choice, life above 2100 would be sweet if your bullish; "Big Money" would like to push the market there as well, but without the little guy along for the ride. It feels like we have been here before, there is that line in the sand traders are going to have to choose a side to be on before the market can move further.

If I were daytrading, I would look to short 2000 if broken, bulls panic below 1984 and 1960.

JPM earning 1/14/15, #Whispernumber

Read More »