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

Richard and I traded the same stock today, ONXX. Two ways to make moola on the same stock using different methodologies. I also traded CAL but went in Willy Nilly, as ill-advised by Maoxian for a R 0.4 loss on 1/2 of a position. I won’t post a chart, cause it is hard to chart Willy Nilly.

ONXX:

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

Along with Dino and Bubs, I cleaned up today, putting a personal “Best Day Ever” on the board. Pulled off my first +10R trade ever today! And I actually did it twice! I lost -2.2R in 4 trades in a row this morning, in CFC short, ZOLT long (twice) and CAL long. The losers were nothing special, just reasonable risks that didn’t pan out for me. Not too good a way to start the day, but “Keep Swinging”, right? So then I got my game on, and I traded Countrywide Financial Corporation (NYSE: CFC) 5 more times over the rest of the day. I was scalper-boy, trading with $0.10 stops and watching the tape for trade frequency and volume more than anything, though I did watch a 1 minute chart too. I took partials where momentum paused or we had a severe retrace, and I exited close to round numbers or breakeven. Here’s the chart of my winners in CFC:

That’s three trades for about +2R, and two trades of around +10R–overall, I made +20.1R today (just over 10% on my equity)! I remember a post that Trader Mike did about his path to +100R in daytrading. Here’s my chart superimposed on his:

I post this chart not to gloat, but out of complete astonishment! I can’t believe my eyes! I look up to all the great traders out there, and I’m floored that I’m doing this well. Once I overcame my capitalization hurdles and was able to trade at a frequency that suits me, I’ve been taking off. I guess I did it all the hard way for so long that it forced me to really drill in the basics of risk management, position sizing, setups, etc. I blame my success on all of the great traders like Trader Mike that have shared so generously and taught me so much over the last couple of years! If my R’s beat Trader Mike’s, it’s because he paved the way and cleared the path. Thank you!

I can’t believe I made it 1/5 of the way to +100R in a day. (For those counting at home, at a rate 1% of equity risked per trade, +100R is a 100% return. I started with 0.5%, and dialed up to 1% where I stand currently.) Frankly, I’m stunned to be profitable at all, to say nothing of being up this big. I’m now up +35R overall after 92 trades since starting Prop Trading on July 25 (that’s a net return of +29.7% on my starting equity). As Dino said today, God Bless America.

Trade Grade for Today:

As a side note, I gotta LMAO at this timely recommendation! Whoops. To be fair, I did say that the short interest was a potential problem, and that a sharp reversal would cause me to change my mind. That’s exactly what we got after 12:00! I covered my short above my entry point in the afternoon, and went long to get some short squeeze action. Bought at $44, sold at $44.95, and made back double my loss on the short. I still think that FED is doomed, but the end may not come for a bit. You have to respect the price action–fundamentals are just supporting information. I’m proud of how I reversed my stance on CFC and on FED. I overcame my built-in biases and traded what I saw. Hope everybody else did well today too!

Stocks Mentioned In This Article
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CFC	| |

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
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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 swing traded Continental Airlines, Inc. (NYSE: CAL) over the last 2 days. The daily chart looked weak, so I went short as CAL broke down through the OR low of the first 5 minutes yesterday, which was also at round number $36:

I placed my stop above a swing high from the day before, and my initial target was $35. When it opened weak this morning, I lowered the stop to $35.10 to protect the profit. If it broke that level to the upside, CAL would print a hammer on the daily and I wouldn’t want to be short anymore. For my revised target, I was watching the daily for support, and saw some near $35 (it blew through that this morning) and another pivot point near $34:

CAL stalled out near $34.69, and as I posted on Wallstreak, I watched for a break. It went down, so I stayed in. Near the close, CAL plunged with the rest of the market, and I covered into support at $34.06 for a profit of 3.75R.

I’m really happy with my trading today. The profits are nice, but even better to me is that I executed very well. My psychological account is up like a million R. I kept my head, picked good entries and exited into big moves instead of getting stopped out on retracements. If I can keep this up, I’ll be able to close out June green in my account. I’m down about -2R right now, up from a drawdown of about -6R or so from a week or two ago.

Trade Summary:

CAL Short 37 Shares
Entry: $36.01, Stop: $36.53, Target: $35.00
R: $19.24, Exit: $34.06
P/L: 3.75R, or $72.15

Trade Grade:

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

Here’s my trade from today in Continental Airlines, Inc. (NYSE: CAL) that was the final straw in my daytrading struggle:

The One I Missed

I was watching this setup, and then missed the entry due to a distraction. It would have been a great trade:

I was watching for a breakout of the base at $39.40. It went on to hit the pivot point resistance from a prior day, which was my target.

The One I Took

After missing the last one, I saw another base set up:

I picked a higher interday pivot for the target, and was watching the prior high just above $40 for potential resistance. At 39.90, price dropped on volume, but the bid/ask spread widened, so I took it as a cleanup of panic sellers. Price then retraced to my entry point and went on to hit my stop.

Mistakes: I keep messing up my entry, stop and targets. I pick a target that is too far compared to my timeframe and entry setup. I pick a stop that is also too far relative to my timeframe and entry setup. On short timeframe trades (1 min) I have taken, I watch price go up in my favor and then slide right back again for a breakeven or a loss. I don’t have a feel for when price is retracing or when it is reversing, so I either get spooked out, and the trade goes on for a win, or I hang on to avoid a whipsaw and price really reverses.

So there you have it. My last daytrade until I can get in a better situation through capitalization and skill. Thanks for reading, and thanks to all the truly great daytraders that have helped me. I hope to join you someday.

Stocks Mentioned In This Article
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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

After another string of 1R losses, the most recent today in Continental Airlines, Inc. (NYSE: CAL), I’m finally giving up on daytrading. Even though daytrading fits my personality and my desired risk management style, it doesn’t fit my capitalization level or my current skillset. True, with Zecco I have no commissions, but with less than $25K I have the patter daytrader rules to deal with, which limit me to 3 daytrades every 5 days. This does not allow expectancy or a high Risk:Reward style to play out, and my profitability is completely a function of my win/loss rate, which is about 30/70 over the last few months. With the PDT restrictions, I’m not really daytrading anyway, since I can’t take a lot of positions (a lot to me being maybe 3-4 per day). If my trading skills were exceptional, I could trade consistently enough to pull this off under these limitations, but they’re not and I can’t.

When I started trading, commissions killed my expectancy, which was about -0.5R per trade. After the advent of Zecco, I thought I’d be able to overcome the commission drag I had from my old broker, and I did. But my situation hasn’t changed, as the PDT get in the way. Now I’m either at zero expectancy or slightly negative depending on how “lucky” I get with my 3 trades per week. Babak’s international option would help with the PDT rules, but then I’d have very large commission drag for my small account size. Even if I could get the commissions lowered, or trade higher priced stocks with a per-share structure, I still don’t have the time to watch all day, which is another of my problems.

My pipedream was to double my tiny account over some period of a year or three, to prove to myself that I can trade profitably. Then I would put more money on the line and go from there, possibly even full-time. I haven’t achieved anywhere near those results, and I’m net down since I started two years ago. So a combination of undercapitalization and lack of skill are forcing me to accept reality: I can’t daytrade anymore. Without better skills, getting more money won’t solve my problems. I’ll just lose it 1R at a time instead of 1r at a time like I do today. Seriously, I must just suck at the markets. I always hear people say that “it’s easy to make money paper trading, then you trade for real and lose money”, but I even lose money paper trading!

So what now? I have to move up to the daily timeframe and set my stops and risk level such that getting stopped out in the same day is highly unlikely. My daytrades will then become a safety net rather than my intended trade vehicle. Ideally, I shouldn’t ever have to use the daytrades anymore. If I can get swing trading skills such that I can grow my account, I can then consider rounding up more capital to risk. My NR7 scan results have been disappointing, so I think I’ll head in a different direction, but I’m not sure where.

I hope to return to daytrading someday, but for now I sadly bid it farewell.

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

I took my second real trade off point-and-figure charts today, for a second win. Like my GSF trade yesterday, I second-guessed it and got out early. If I had left my original stop in place, and stuck with it longer, I would have made a bit more money. Oh well!

It was in SunPower Corporation (Nasdaq: SPWR). As you can see by the daily PnF, I’ve marked the overall trend as up, though it does look like it may be about to turn over. So, I think I’d take any setup long, and I’d take a short setup through the big daily support I outlined. This is how I do all my trades… I pick which direction(s) and levels I think are safe, based on the daily charts first. Then I look for entries on the intraday charts. Anyway…

To be honest, though, I don’t like SPWR’s spread (it’s not obscene, but it can get to 10 cents at times), so I wasn’t paying too much attention to it. Well, as it happens, on wallstreak, stock traders started talking about how it was too bad there were no short shares available. I think it was a short candidate for highchartpatterns.com, too. This got my attention, and made me think, “I’ve gotta get in long, if this one turns around!”

Well, sure enough, near the 55.25 support area on the daily chart, I got the turnaround I was looking for. Then, I hoped, some percentage of the people already positioned short would give up and drive the stock higher. I think that’s exactly what happened, but I didn’t wait long enough! Here’s the intraday chart:

I saw it having trouble getting above yesterday’s low (I’ve drawn a blue line to illustrate that). So, I got out as near that level as I could, given the 4 to 7 cent spread I was dealing with. Oh well, I made money, and got another PnF trade under my belt.

Read on if you want to see several more trades I spotted. I think I will do my best to be more aggressive tomorrow, as long as the market environment is sane enough:

Read the rest of this entry »

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SPWR	| |

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

Here’s three quick trades that I took as overnight plays ($@#%^& “Pattern Day Trader Rules”! cursecursemuttermutter). I entered within the last half hour of trading yesterday based on my read (i.e. Feel ‘em) of the charts. My intention was to hold overnight and then exit within the first 30 minutes this AM, which I did. Read the rest of this entry »

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 a swing trade in Continental Airlines, Inc. (NYSE: CAL). Yes, It’s NYSE–This one turned out okay. It’s actually a really good example of using Rule #2 correctly!

I saw CAL make a strong bearish reversal on the daily chart:

I took a 1.3% portfolio risk position size in my initial trade. As it broke down further, I added another 0.7% risk position size, to make up my maximum risk of 2% if my stop was hit. When you trade this way, if the position immediately reverses, you’ll take a loss on a smaller position size than if you put the whole thing on in the beginning (in my case, the whole 2%). I got shaken out this morning since I was aggressively protecting my profit. I could have made my original target if I had held:

I’m not sure exactly how to report my profit/loss on these added trades yet, so here’s the results for both:

Trade Summary:

Initial: CAL Short 20 Shares
Entry: $41.69, Stop: $43.02, Target: $38.00
R: $26.60, Exit: $39.44
P/L: 1.69R, or $45.00

Add: CAL Short 10 Shares
Entry: $41.07, Stop: $43.02, Target: $38.00
R: $19.50, Exit: $39.44
P/L: 0.84R, or $16.30

Overall: P/L: $61.30

Trade Grade:

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