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Thursday, 13 January 2011 01:04 |
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As I dug my driveway out this morning I had some time to reflect on a difficult day for me yesterday, a day where I had a good sense of the market direction but stopped out of my positions with a larger than desired loss. Of course the market is cruel and had I stayed with my positions just 18 hours later I would have seen all those dreadful losses become sweet gains. My take on this was staring too much at my P&L. Today I decided that I was going to cover up my P&L as long as I had positions on meaning I would only look at my total P&L when flat. I am going to keep running notes on this and see how it works but here are a few observations from today. First in all but one case I had underestimated my P&L so I never had a great handle on where I was during the trade. Second, this took some getting used to. I did not realize how much time I spent looking at my P&L so not looking at it was a strange experience but after an hour or so it came more naturally. Third, not looking at my P&L freed my mind up to be more aware of the charts and my levels which I believe is the most important part of this exercise. P&L awareness is important as this is the only score keeper that matters in our business. Yesterday knowing my P&L hurt me, I was trading based on money and not based on my levels. Stay tuned to my blog as I chronicle this experiment.
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Tuesday, 11 January 2011 13:26 |
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I was talking to an individual today in my office that actually uses astrology to pick the direction of the markets, yes I said astrology. Apparently he has been using this for some time and he feels that he is on to something and his only issue has been the practical use of the indicator. He has asked me to work with him on the details of building a tradable model, so with my curiosity peaked we are going to embark upon seeing if we can take his predictions and use them in a tradable model. I don't believe that individuals should get bogged down in too many indicators. A core belief that I have is that it is not so much your indicators but how you trade them that makes someone a successful trader. I use pivot points as my main indicator with moving averages and chart analysis to aid in my conviction. I will sometimes use a MACD and RSI if I am not getting much out of my other methods. So why have I agreed to take on this project? First and foremost intellectual curiosity. Can someone tell me which direction the market is going to go based on astrology and do it with consistency and at a rate higher than dumb luck? I don't know but if it works I want to be on board. The second reason is that I don't see it interfering with what I already do to pick stocks, if I did then I would not agree to it. My skepticism in this concept makes it perfect for me to be a part of the test team. We are going to embark upon this journey next week, I will keep you up to date on our progress. By the way he says that I am a Leo and that I am strong willed and dedicated to my job, sounds accurate so far.
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Monday, 10 January 2011 21:39 |
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Today I left early at 3 pm. I traded well until 12, took a small lunch, described some trades on the DayTradeWell channel, traded a little more at 2 pm and left. Why did I leave? First reason is that the market was real quiet for most of the afternoon and opportunities seemed few and far between. I find quiet markets to be like land mines for me as I lose my patience with the trade at the wrong time. The second reason is that I do not like to waste my time and mental capital on a day when nothing is going on. I figure that I sit in front of a computer about 2,000 hours a year so I only want to spend those hours when those hours are going to work for me. The third and final reason is that I did not know which direction the market wanted to move in and this lack of confidence got in my mind. I had a nice day, plus $980 and the last thing I wanted to do was even give back a dime under this trading scenario. Being able to sit dormant while the market is quiet is a skill that a trader must develop, but there is also nothing wrong with throwing in the towel on the day and coming back fresh for the next day. It is early in the year and stocks were quiet today, why would I want to waste anytime that is not going to be profitable time? The answer is I don't. So now I am writing this blog from home and I get to see my family and enjoy a nice dinner without having to fight traffic the whole ride. Sounds like a good day to me.
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