This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com

I’m stuck in my trading progress. I have no method. I try to trade what “looks good” since I have no method. I lose a little. Wash, rinse, repeat. My biggest problem in finding a method is that my head is so full of hundreds of different timeframes, methods, indicators, setups and philosophies that I can’t choose one. All I need is one that works, that I believe in, and that I can use consistently. I have a lot of trading skills and better discipline than I used to, but not a lot of trading focus and bad intuition. I feel like what I need now is a method that has a very high probability of win, even if it has a very low reward. Any suggestions?

I’m in the process of trying to get a new job, which would take me away from the part-time daytrading scene. I’d then be confined to swings managed by trading triggers. It seems to be working out well for Ugly, and we all know Pinoy rules in that arena. I just hate doing overnights because of the potential of a huge gap against you, and I can never seem to tell which way a stock is headed.

Anyway, that’s where I’m at. That BIDU blowup was kind of a death blow to me. My prop account is at about 55% of my initial finding level. I can’t be consistently profitable, even trading small. I lose 3 steps and gain back 1 it seems. I don’t have much to say lately, hence the lack of long rambling blog posts from me. I’m feeling pretty defeated as a trader, and it’s not an impulsive spike down that’s likely to bounce. It’s more of a gradual long-term downtrend in my feelings, if that makes any sense.

This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com

This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com

Long time, no write! Yes, I’m here an NOT trading after my BIDU blowup. Working my Seven Step Plan, testing out some ideas on paper and working on my emotions outside of the markets.

My big quest for a system is basically how to tell a trend change / reversal from a shallow retrace / continuation. Quotetracker has a built-in chart type called Renko Charts. This link describes what they are very well. Basically, they are like a PnF chart, only less cryptic IMO. Also, time is compressible, like in tick charts or volume-candle charts, so there’s no information or signals during slow times.

I was playing with Renkos because they provide a solution to the reversal / retrace problem. The trend is defined by the brick pattern. It’s not subjective at all! Choose a Renko brick size (say, $0.10) and you’ve got the trend spelled out. here’s an example I paper-traded in GRMN this morning. I made 10P’s (a P is a paper-traded R for those counting at home):

Nice, huh! The only problem with Renko charts is that they are a trend following method, so in non-trending markets you get whipsawed like crazy (see all the arrows on that GRMN chart? I would have given back lots of P’s through the rest of the day.) I’m trying to play with some different methods to only take signals that have better odds for a trending move. I’ve played with PPO, a stochastic RSI, and choppiness index, but nothing earth-shaking so far. Any ideas on how to cut down on whipsaws would be great!

This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com

This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com

I blew up 30% of my account today. I made some trades earlier in the day, a few -1R losers, you know, my usual.

I tried to scalp some BIDU after the close, making the spread. It was working pretty well–I had one good win and one scratch. I was long 30 shares when the earnings news came out, and BIDU collapsed. I tried to sell, but my platform’s servers apparently stop at 5:00 ET, and my order was stuck, unfilled, but I couldn’t cancel it either to try to sell.

I finally reached someone by phone, and they sold my shares around 319. That’s a $450 loss on my $1700 account.

It was dumb of me to be holding into the earnings report. It was not my fault that the order server screwed me. Still, I am responsible for my trading results, and I don’t blame anyone but me.

I look at this hole, and I think that it will take me years just to trade back to where I was when I started, and that assumes that I’m profitable from here, which doesn’t seem too likely from my past experiences.

On the other hand, I could re-fund to my original level fairly painlessly by adding more cash to my account. I even got a cash award at work recently for $300, which almost offsets this loss. But if I can turn a $2000 account into $1300, I could also turn a $200,000 account into $130,000, and that would ruin me. I’m playing small deliberately so that mistakes don’t ruin my life. But a loss of this % is still devastating.

I feel, again, like quite a failure. I have no discipline, because I keep trading when I should be following my dumb 7 step plan. I hate my job, and so I force trades to have something to enjoy during the day, something to put my heart into. But this isn’t what I want. :(

Maybe now this pain of losing will be greater than the pain of change, and I’ll finally get my head together, start from the beginning and get discipline, a system to follow, and have a chance at success.

Thanks for reading.

This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com

This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com

I held a tiny VMW position overnight yesterday. I sold it when we got back to my entry point near yesterday’s close (88.50). Then it took off to 92 today! Doh.

I tried to short MDCO as a breakdown of the 5 min OR. I thought it would fill the gap to 18.60. When it bounced off the OR low again, I covered at 19.36 for -0.4R since I had been wrong for so long. Then, MDCO dropped! So I watched, until I revenge traded it at 19. I got an other drop, but got stopped out for breakeven. If I had held to my initial stop on my first trade, I would have made +0.7R.

Then I threw away -1R trying to go long on RDN, which had steadily trended up to the point I top-ticked it and made it correct ;) In retrospect, it was a terrible entry and I never should have taken it. It was overextended on every time frame and near the upper channel line:

For the final straw I shorted BIDU as it seemed to be topping. I thought 307 would be overhead resistance, but I was quickly stopped out for a -1.5R loss. I said on Wallstreak “I am done”. Down -2.5% for the day, with revenge trades and dumb setups. Really poor trading.

I kept watching BIDU, and I noted that if I had taken an OR breakout trade on the 15 min, I would have been stopped out by the long lower tail on the 12:45 bar. Figuring that since my intuition is often so wrong, and any traders like me would have been flushed out by that tail, I decided to go long with a stop back at the low of the 12:45 bar. BIDU tore up after that, squeezing the life out of the shorts (of which I had been one no more than an hour earlier). It was hard to hold on and risk giving back the profit during the partial retraces! When we hit the 119% fib extension I took a partial. I had to go out for a meeting, so I sold the rest at the 119% fib on a retrace. I thought I’d miss the ultimate push up (and I would have) so I just booked the gain. BIDU topped out at 323(!), and earlier in the day I thought the 138% fib at 318 would be a stretch!

I made +4R on the trade and completely offset my losses from this morning and then 0.5% more besides. I got lucky. too bad the rest of my day was full of bonehead trades that had to be offset. Thanks to the Wallstreak crowd for moral support and letting me bounce ideas off of them. They are a great group of expert and helpful traders.

This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com

This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com

Traded BIDU again today for a R 0.3 loss instead of a gain.

BIDU:

This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com

This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com

Two trades today. ALU was a trade just in case the market kept tanking. Bad idea as you will see. I soon forgot how bad of a trade it was after BIDU went my way ;).

ALU:

BIDU:

This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com

This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com

Here’s a Pile ‘O Charts from my trades today. I took seven trades, 3 losers for -2.2R, two breakeven, and two winners for +4.6R, leaving me at +2.4R for the day. My prop account overall PnL is up about +1.5R from my starting balance. I’m happy with those results for now, especially on the last few days we’ve had! I need to be quicker to cut a loser–I still have some of that bias left over from all of my retail trades, trying to save that daytrade!

Here’s the charts. As always, Red is my stop, orange my entry, green lines are for targets, and blue lines mark exits. On my trade in Continental Airlines (NYSE: CAL), I partialed out successfully, taking some profits and letting the rest run, giving the one big win of 3.53R.

CAL Short (My good trade for the day)

AAPL Short (Quick -1R that afterward turned and went way beyond my target! DOH!)

CFC Short

BIDU Short

ISRG Long

RIMM Long

CROX Long

Stocks Mentioned In This Article
Stock	Links
CAL	| |

This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com

This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com

I took 10 trades today in my first full day prop trading. Some were well thought out and some were not. I ended up finishing the day -2.5R down, so after yesterday’s gain my overall PnL is now at -0.5R. My win rate is only 30%. Lots of room for improvement. Today was a wild market day, though I made plenty of mistakes and took some unjustified risks on mediocre setups. I traded a lot off of the 1 minute chart, since I could. When I was down, I wanted to make it back. Just a quick scalp. I better watch that! If I wasn’t keeping my position size so small, I could have lost a bunch today.

One downside of graduating from 1 trade per day to 10 is that I can’t go over all of the trades in detail as I did before. Well, maybe that’s an upside for some of you out there. :/ Most of my trades were too tight for the volatility today. I shorted BIDU, got stopped out at a retrace to breakeven, and then it ran to about 3R later in the day. I also entered GRMN on a flag on the 5 minute, before the consolidation broke, and got nailed for -1R as it broke the wrong way. Lots of ~-0.8R losers, and only a couple of winners.

My best trade today was in Continental Airlines (NYSE: CAL), and it was also one of the only trades I took from the 15 minute timeframe (which should teach me a lesson). I entered at the orange line, stops managed by the red lines, and I took a partial at the 119% fib (blue line 1) as price stalled. The final cover came at the 138% fib (blue line 2), which was also just about the low of the day:

Thank you Trader-X for that one. Too bad I missed the entry earlier in the day.

I’ll try to be more selective in my setups from now on, even with my newfound freedom from pattern daytrader rules.

Stocks Mentioned In This Article
Stock	Links
CAL	| |

This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com

This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com

I paper-traded a setup in Baidu.com, Inc. (ADR) (NASDAQ: BIDU) today, since I was out of daytrades.

I was watching the markets near 12:00 , when I saw that the QQQQ’s were smacking into $50 on low volume. I thought it would fail (and it later did). This gave me a short bias, and I noticed that BIDU was breaking below an inter-day pivot point on this 15′ chart:

I also noticed that my HMA/EMA crossover trend indicator was bearish. I would have gone short at the orange line, and the stop would have been at the red line at $213.04 (picked off of the 1′ chart swings). The initial target would have been the $210 level, all as I said on Wallstreak. In the end, with the partialing out, it would have been good for about 2.5R profit, though it was hairy in the first few minutes, moving to about -0.7R at one point!

More things to notice are pointed out in this 5′ chart:

The volume on the down moves was advancing, while the volume on the up moves was declining. This relationship between price direction and volume trend is a key to determining if an adverse move is simply a retrace or is actually a reversal. In general, retraces will come on declining, below average volume, and will be in the 38%-50% retracement range. Reversals happen when the character of the price/volume relationship changes–a volume spike that reflects capitulation buying / selling, a change to higher volume on adverse moves, etc. Note that if you covered the remainder of the position at the volume spike into the pivot point support at about $208, you would have covered right near the best price of the day, even if you waited until the close! Volume spikes like this are important points, where people who are forced to exit puke out their position at any cost. You want to be there to unwind your position through them, whether covering your short with their panic-sold shares, or offering your shares to a freshly-squeezed short seller. You’re actually doing them a service, since if your liquidity was not there, they would have to take a worse price to exit.

My strategy is to enter at inflection points, where a consolidation is broken and a new move gets underway. I want to exit profitably into strong price moves in my direction on high volume, when people who are trapped and wrong rush to the exits. This is how institutions operate, though not as nimbly as a small-time daytrader can; their accumulations and distributions can take weeks or months. I have to give a huge shout out to Jamie, as he has taught me so much about this trading style through his blog. The Tape Reading book I bought has also been immensely helpful, and I recommend it.

Stocks Mentioned In This Article
Stock	Links
BIDU	| |

This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com

This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com

Wallstreak user Stewie has sent more charts for us. I’ll invite Stewie to field any questions on the setups or his trading style in the comments of this post.

Baidu.com, Inc. (ADR) (NASDAQ: BIDU)

National-Oilwell Varco Inc. (NYSE: NOV)

Terra Nitrogen Company, L.P. (NYSE: TNH)

And one more: FCStone Group, Inc. (NASDAQ: FCSX)

Stocks Mentioned In This Article
Stock	Links
BIDU	| |
NOV	| |
TNH	| |
FCSX	| |

This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com

This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com

Traded Baidu.com, Inc. (ADR) (NASDAQ: BIDU) today. It had a very compelling setup, though the longer term trend was against me.

The Setup

This morning I was lamenting the lack of setups for me with all the action going on. I missed out on AAPL, RIMM, CAL and some other good moves. Just then, I noticed that BIDU was setting up a nice bull flag on the 5 minute timeframe:

The narrow range candle at pivot point support from the prior day, the 5-ema close by, the narrowing range decline in price on declining volume, the flag retracing less than 38% of the first 15 minute OR–all of these pointed to a high probability setup in the long direction. The only red flag for me was the extended downtrend yesterday, which pointed to me that the longer term trend might be down, and a long play was counter-trend. The daily supported this, showing that the prior day’s decline was on very high volume:

The Trigger

I bought at market when price broke the high of the 6th candle on a volume uptick, filled at $183.15. I placed my stop below that candle and the pivot point support at $182.15.

Trade Management

Here’s the chart of the trade:

After the entry bar was completed, I was watching for a stall at the $184.60 level (the prior swing high), but we blew right through there. A very wide range bar printed, and I moved my stop to breakeven. I had visions of a 10R home run, with my ultimate target seeming oh so reachable. The next bar retraced 50% of the wide range bar (WRB). Strike 1. The next bar retraced even further. Strike 2. The $184.60 support didn’t hold. I’m outta there! Bailed for 0.58R profit. Pathetic since I was up over 2.5R at the top of the WRB. :p

The Takeaway

After this trade, I’m not sure whether I should be giving my trades more rope, letting it either get stopped out for breakeven or hit the ultimate target, or whether I should be watching for WRB’s and volume spikes and exiting more aggressively. Maybe both. Either way, I will not hang around with a trade that goes into the red right away and stays there. That’s just dumb, and it means I was wrong. It’s okay to be wrong. It’s not okay to be dumb.

Trade Summary:

BIDU Long
Entry: $183.15, Stop: $182.15, Target: $193.73
Exit: $183.73, P/L: 0.58R

Trade Grade:

Stocks Mentioned In This Article
Stock	Links
BIDU	| |

This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com

WallStreak user Stewie submits the following two annotated charts. They are trades on Baidu.com Inc (Nasdaq: BIDU) and Research in Motion Limited (Nasdaq: RIMM). Enjoy!

Stocks Mentioned In This Article
Stock	Links
BIDU	| |
RIMM	| |

This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com

Trader-X had an interesting play with BIDU. It gapped down with the rest of the market, and rallied all day.

I’m not sure why, but when a stock (or futures contract) is trending, it bounces off the 45 degree trendline with amazing frequency.

I used a 10 cent box with a reversal setting of three.

This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com

I don’t know if I’ll have the time or energy to do this daily… I might need to do them a week at a time. But, anyway, here’s how I’m going to track the daily scan performance, to help learn how I should tweak it in the future. The point is to have enough data and reference material to make informed decisions, rather than using my gut feel for what’s good or bad about the results.

First, the daily charts of the Indices, on the day of the scan, and the intraday charts for the trading day.

	DIA	QQQQ	SPY
Daily
Intraday

If you ignore one stock that triggered in the closing minutes, we had 5 stocks get to their trigger points today. You can see that the stocks that traded above average volume (VSEA, BIDU, IACI) held their breakouts better than the ones that traded less than average. Never use 1 day of data as a basis for decisions, of course, but maybe there’s a reason most of us only like to trade stocks doing unusual volume! Had you blindly traded these three at their daily trigger numbers, you would have been happy today.

On top of having less than average volume, NSC reached its trigger point in the first hour of trading, which would usually disqualify it for my tastes.

I measured the profit for 3 choices of stop loss: 0.5% 1% and 2%. In “real life” you would chose a stop based on the chart action, but to get good aggregate statistics, I settled on these three sizes. There is subjectivity in how I picked the potential profit… I tried to be true to how I would ideally manage my trades, rather than chose a mechanical rule like “take profits at 2%” or something. Feel free to disagree with my assessment… I’ll also point out that, for failures like FDX and NSC, there really is no excuse for holding until your stop is hit. Those two stocks didn’t try very hard at all to truly break out. But, I registered them as -1R anyway.

	Symbol	Avg Vol	Volume
	VSEO	985,698	1,046,443
P/L	3.6R with 0.5% Stop 1.8R with 1% Stop 0.8 R with 2% Stop (hold to EOD)
Charts

	Symbol	Avg Vol	Volume
	BIDU	2,840,710	3,771,872
P/L	2R+ with 0.5% Stop 1R with 1% Stop Probably b/e with 2% Stop
Charts

	Symbol	Avg Vol	Volume
	IACI	3,379,780	3,900,837
P/L	-1R with 0.5% Stop -1R with 1% Stop -0.46R with 2% Stop (hold to EOD)
Charts

	Symbol	Avg Vol	Volume
	FDX	1,742,680	1,207,800
P/L	-1R with 0.5% Stop -0.83R with 1% Stop (hold to EOD) -0.41R with 2% Stop (hold to EOD)
Charts

	Symbol	Avg Vol	Volume
	NSC	3,274,120	2,282,100
P/L	-1R with 0.5% Stop -1R with 1% Stop -0.64R with 2% Stop (hold to EOD)
Charts

In “real life” I only tried to trade VSEA today, but was too greedy with my limit order and did not get filled. I gotta loosen up some on these!

Just in case Zoomie didn’t start outperforming me today, I decided to erase all my gains for the week. I am such a humanitarian. If only I could eat humanitarian awards, and burn their packaging to keep my apartment warm… :-) Okay, that was over-dramatic…

Anyway, since we had several waves of big negative $TICK’s, and several stocks hovering around their lows, I found 6 trades I wanted to make. I made 4 of them, and managed to take small losses on each. All 6 would have broken even at best, the way I would have managed the trades. Wherever the stocks were that knew how to break out of their opening range, I wasn’t watching them today!

To top it off, the first trade I made today was by accident! I sent the order when I only meant to fill it out. Still, it wasn’t a terrible entry, and I thought I had a good chance of making a profit. Wrong! So, my first two trades of the day (1 intentional, 1 unintentional) were on Occidental Petroleum Corporation (NYSE: OXY):

(all these are going to be 10-min charts, by the way)

Here’s two false starts from American Airlines (NYSE: AMR):

NYSE not treating me well.. how ’bout nasdaq? BAIDU (Nasdaq: BIDU):

or maybe Broadcom (Nasdaq: BRCM)?

fine… how about nVidia (Nasdaq: NVDA)?

To be fair, NVDA acted better than anything else I’ve shown so far, but it still moved back through the entry after the trade had been open 70 minutes… not exactly what you want to see…

Well, I’ve tried oil, airlines, tech, chinese tech… how bout some gold trust (NYSE: GLD)?

Summary
You won’t find me saying any day is bad. I have an amazing life even when I’m bleeding cash. But today was certainly not profitable. It’s not as bad as I might have made it sound, though… I liked the trades I made… and I haven’t totalled it up yet, but I lost a little over 1R across 4 losing trades, which isn’t bad at all. Just one good trade will cancel out all of these.

[EDIT: okay, StockTickr says it totals to 1.07R I lost today. Not a big deal... just a lot of trades with no profit to show for it...]

Stocks Mentioned In This Article
Stock	Links
OXY	| |
AMR	| |
BIDU	| |
BRCM	| |
NVDA	| |
GLD	| |