02.29.20 Month in Review

What a wild close to February. The Dow dropped more this week than ever in history! The sell off was caused by the Corona virus in consistent panic selling. Like a ripple effect, the panic selling created wild volatility to the downside for most of the market with the exception of a few tickers. I'm excited I didn't let the noise scare me away from trading and kept focus to close the month on a high note.

This month I noticed a couple big things that I need to change: I need to stop looking at my P&L entirely. Not during my trades (which I'm pretty good about) and not at the beginning or end of any day. Prior to February I was constantly in tune with where I was in my P&L. Was I up or down? How much up? How much down? I was letting that effect me mentally to an alarming extent. I've been reviewing my previous months trading via a trend line chart and all over the place it flat lines immediately after taking a losing trade. When I finally initiate a trade after flat-lining I get overly cautious and close my position in complete defiance to my trading plan even though no new information came about causing me to do so. Closing my positions against my plan is something I've known I was doing but I didn't realize how drastically it was effecting my performance. I was at a point closing January where I was ready to throw in the towel, close my account, and move on with my life. Before I did that I decided I needed to take one last, real shot at executing my plans. If I could close February profitable I'd keep at it. If I kept being an idiot, game over.

My plan for February was to do three things: 1) size my risk down to a point where had I lost every single trade it would be insignificant overall; 2) ignore my P&L entirely and; 3) execute my trading plans precisely unless new information caused me to change my plan. For the most part I executed this plan perfectly and am more proud of myself for doing this than I have been about anything in a long time. It's so incredibly hard to remain emotionless while trading, even when the money piece doesn't matter. It's painful to be wrong and lose in a trade no matter the amount of money. In the middle of the month I had a double loss day where I lost twice in full sized positions. I looked at my P&L on that day and for the next week I was overly cognizant that I was up on the month and playing defense against my profitability.

If I'm writing in my journal (here) every day I know whether or not I'm doing well or poorly and should be unaffected by the dollar amount in either direction. Doing "well" means I'm executing good trades. Doing "poorly" means I'm trading less than ideal setups or trading with emotion. "A good trade isn't always a profitable trade." I think that's a quote from Mike Bellafiore's book One Good Trade but I may be paraphrasing. As a trader we're constantly looking for one good trade and then another, and another. When I'm trading well I should be playing offense and sizing up in my risk. When I'm losing, that's the time I should be playing defense and size my risk down.

Looking ahead into March I'm going to maintain my current risk, execute my plans as I have been, and this time not look at my P&L at all until I finish trading on the last day of the month. If I make it through March trading well I'll look at systematically sizing up starting in April. If I get overly emotional and trade poorly then I'll regroup. I can't let that happen.

02.27.20 $VIR

Today was a tricky for me. The market was still falling and the volatility was still insane and although I saw some pretty good setups, I was hesitant to trade most of them. I'm starting to realize I'm better with lower volatility tickers and need much more practice trading in highly volatile situations. I wish I could have participated in the down move the market was making more but I'm just not there yet. I feel like it's better to recognize that and ease my way into it that it is to hit it hard and blow up my account.

I did take a trade on $VIR and feel pretty good about it. It was just as volatile as the rest of the market. I was watching it throughout lunch form a pendant over VWAP. On one hand, I loved that it was holding VWAP and forming a pendant and I thought it if could break from the pendant it had a shot at making it back up to the high of day at $70. On the other hand this thing was making $5 moves like it was nothing, so getting into it and placing my stop in the correct spot would be tricky. I decided rather than getting in before the break and not being clear where I should put my stop (because of the volatility) I'd wait for the break and then jump on it with my stop at $52.50 to start. At first I was using a limit/stop order to enter the position, as I normally do, but realized I missed my fill at $50 and it wasn't coming back to pick me up. I sized down and switched to a market/stop order and of course got a pretty nasty fill at $56.47. When price broke through the smaller pivot inside the pendant I took my first piece off and closed 50% of my position. When price broke through the second lowest point of the pivot I closed my position to end the day, week, and month (I have an appointment tomorrow and can't trade).

Overall I'm happy with my trade but I do feel like I should have scaled out at my normal intervals (25% / 50% / 25%). Had I done that I would have hit my target at the high of day and this would have been a massive trade. My reasoning at the time for taking the position out at 50% / 50% was because I'd sized down to minimize my risk and by closing this way was just another form of risk mitigation. I suppose what I could have done differently was to take my first piece off at 25% then move my stop up to my entry which I usually don't do until my second take profit. I think that will be my rule moving forward.

02.26.20 I'm In My Head $NVAX, $LK, $AMRN, $CODX, $VIR

Shamefully, I was all over the place today. I'm still focusing too much on finishing the month on an uptrend that I'm not focusing on simply making one good trade at a time. That's all my focus needs to be or should be; make one good trade. I feel like I made two good trades today: one profitable but lacked follow through and two failed trades where I took a loss. A "good trade" doesn't have to be a winning trade and not all winning trades are "good trades." A good trade occurs when a setup occurs and a plan is executed. Anything outside that is not a good trade. All but two of my trades today were rubbish.

$NVAX was my first trade of the day and although I thought it was a good trade at the time, upon review I realize it wasn't. Long term resistance was $9.99 and we broke through that with huge volume but when we pulled in to retest the level as support, we didn't bounce right off the level. We broke back through and held that level sideways for too long. Had it come down, broke the level, and moved right back away from it then it would have been a better setup and made this a good trade. I shouldn't have been in this one.

$LK was my second trade of the day and offered up a great setup but no follow through. I was able to clear 25% of my position in front of the previous high and 25% after, then recognized we were changing direction and banged out the last 50% of my position before I moved into loss territory. My strategy on these pull back trades is to take 25% in front of the previous high of day or when my risk: reward ration reaches 1:1 (whichever happens first) then the bulk of my position, 50%, once we get the extension through the previous high and I hit 2:1 risk: reward. My second take profit was only 25% instead of 50% because I hadn't hit 2:1 yet and we were struggling to clear the previous high. We should have broke that level and continued without issue. I wanted to take some profit but leave the bulk in case I was wrong.

I initiated my $AMRN trade while I was trading $LK but this was so far from a good trade and such a rookie move I'm pretty disappointed with myself for taking it. I always have $AMRN on watch because I like trading it (although it hasn't been making predictable moves lately). Anyhow, it was in my watchlist and I could see the the price moving around. I pulled it up on my #2 screen and started watching it. I chased my entry, sat with the guilt for a few minutes, and finally decided to close the position. It made a couple bucks but I shouldn't have been in this trade at all. It was dumb and I was lucky.

Same as $AMRN, I was chasing the price of $CODX and took two trades on it. They made money but again, not trades I should have been in. I had an appointment I had to be at and was getting ready while watching this thing move without me. I got antsy and I got stupid. Another rookie move.

My first trade in $VIR was a good setup and a good trade but I have to admit, I was on edge from watching $CODX climb the entire time I was at my appointment. I was getting long at the tradeline after a nice solid push on volume. The tradeline usually would hold support and when we got an increase in volume on a drive away from the tradeline, I got long. I then got stopped out. In hindsight this thing was trading sloppy all day so maybe I could have seen the loss coming but it was still a good setup and worth taking a the shot. My second trade on this stock was our of frustration as price moved higher after I took the "L" from a failed trade. Amateur hour all day long for me... Tomorrow will be my last day trading for the week and the month since I'm tied up on Friday and won't be at my station. Tomorrow I need to be patient and execute one good trade, then another and only if there is genuine opportunity to do so.

02.25.20 $ARLO

Today was a little frustrating. I struggled to find anything I wanted to trade and balked at a couple names ($TVIX and $AMD). I wanted to participate in the moves those stocks were making but I just couldn't bring myself to trust what I was seeing. So many times recently we've dipped below support and been bought right back up. The last couple days haven't been the case. I did manage to find my way into a short position on $ARLO and feel like I traded it pretty well. I got my first take profit off as planned but missed my second opportunity by a hair, which would have been the bulk of my position. I still ended the trade profitable but was up triple at one point from where I finished. None the less, the plan is the plan and a target is a target and I'm doing everything I can to make a habit out of sticking to both my plan and profit targets, unless new information is presented to make me change my mind.

One thing I did while managing this trade was kept moving my stop down as price moved lower to make sure I didn't get wiped out in a reversal for no reason. I feel like I made the right call making those adjustments during the trade but again, had I not moved my stop to it's last position I would have closed at double where I did. Anyhow, a couple things I need to think about on this trade are whether or not moving my stops was the right call and if my profit targets were correctly assigned. I think all was good but will be worth reviewing later tonight.

Edit: after taking a break, thinking about this trade and reviewing it further I realized what I could have done differently. I took too long to make up my mind when I added. I started debating whether or not to add to my position when it was retesting $4.18. When it failed I had plenty of time to add right then and didn't. I hesitated and waited until the price moved ~$0.08 lower before adding short. Had I added at $4.15 with my stop at $4.19, my average price per share would have been $4.13, which would have put my first profit target at $4.03 and my second at $3.93 and I could have got the bulk of my position closed with higher profits. An add anywhere after $4.14 and my results would be no different than they were. I guess the lesson is to 1) make my decision more quickly and 2) better define the result of my decision before making it. These thoughts are obviously in hindsight so I may be thinking too specifically about the trade but none the less, I know at a minimum I need to make decisions more quickly and this though reinforces that.

02.24.20 Fairly Active Day

Today was wild. There was a new report last night on the Coronavirus and the entire market sold off deeper than it has in a long time; dollar-wise it might be the biggest selloff ever but I'm not sure if judging based on percentage. The selloff took my watchlist for the week and through it right out the window. I ended the day green but I'm not overly happy how I got there. My day could have been somewhat better had I traded the chart patterns and not my P&L.

I was pretty active and after my first trade, I fell into old habits quickly. I was stopped out getting long $GNPX from a really nice setup. It was setup in a bull flag and I felt like I had my stop set appropriately for the scenario. I debated putting it under the previous all-time high but that seemed like too much room and would have put too much risk into the trade vs. the potential I was anticipating. Anyhow, I stopped below the pendant break, the trade line, and VWAP and was pretty irritated, especially when it recovered and put in a new high on the day.

I then got short $ROKU in a tier one position (25% of my desired position), looking for it to return to the low of day while it was below VWAP and the trade line and while it was failing to put in new highs. I actually added to this position when it retested VWAP to the upside and failed so I stopped out full-sized. I wasn't entirely unhappy with this trade but I still felt uneasy and irritated. When I got stopped out I waited a few minutes to see if I could tell if I just got outplayed on this trade or if it was reversing and showing strength. I ended up getting long after it pushed through VWAP on increased volume then retested VWAP and held. I could have executed my take profits on this trade much better than I did and this is where I feel like I fell into my old habits of not trading the chart vs. my P&L. It wasn't horrible or as bad I have have been in the past but my mind was definitely too focused on my P&L during the trade.

While I was short $ROKU I saw a setup in $TVIX and got long. Simultaneously, I was letting my P&L effect both of these trades so again, I could have done better executing my take profits. I also goofed my entry and entered with fewer shares than I wanted, so while it looks like I added at random, I was actually just bringing my position whole. I ended up taking a scalp on $TVIX coming out of the lunch session too. I saw a nice pop in volume and price action so I grabbed a few shares for a small move to add to my day.

I don't know. I did okay today and have definitely done worse. My execution was off on my take profits though.

New Attitude

I  mentioned in my post yesterday that I feel like pitcher in the ninth inning of a World Series no-no and woke up this morning realizing that's absurd. I'm like a World Series pitcher that was just barely born. My upward trend for February is so insignificant in the long run it's hardly worth worrying about right now. Do I want to finish the month on an upward trend? Absolutely. Is that trend a positive sign? It is, especially since it started exactly when I sized down to attempt controlling my trades better. The wild ups and downs aren't in this month's trend which is a significant difference compared to previous months. The fact of the matter though, is that I don't just need to finish one month with an upward trend; my actual goal is to finish ~120 months from now with a positive upward trend to a point I can retire (or just continue trading without a regular job).  I created the graph below to help me visualize where I am in relation to where my goal lies and one month is so insignificant in the long run, it's really not worth worrying about. Obviously there will be some draw-downs too and the graph doesn't reflect that - it's merely to demonstrate the insignificance one month has overall.

02.21.20 No Trade Friday

Today was actually pretty frustrating. Similar to yesterday, the $SPY put in a downward move then consolidated endlessly. When the $SPY consolidates, nothing seems to happen anywhere (for the most part). There were a couple shorts I liked but I couldn't get a borrow. A couple long setups I liked between 9:00 and 11:00 AM PST but I don't initiate trades in those hours unless the volume profile allows it. One trade in particular, I loved but just wasn't fast enough to notice and pull the trigger. The $SPY (of all things) put in a reversal signal with a few minutes to the bell but I missed it.

I'm also frustrated because I have a head game going on where I want to continue my upward trend in my P&L and am going back and forth with the thoughts, "am I being too picky? and "are you about to take this trade because you feel like you're being too picky?" The back and forth is usually what breaks my trend and gets me spiraling downward. I think the only difference between having these thoughts now vs. prior instances is that I'm recognizing the behavior. The big question becomes, what do I do about it? Realistically, the answer is to stay patient and don't let thoughts of my P&L trick me into trades that aren't flat out good setups but often that's easier said than done. I fell like a pitcher in the ninth inning of a no hitter.

We'll see how next week goes. I'm still stoked on the month I've put together so far but disappointed and frustrated with the last couple days. I can't allow myself to stop trading and point at my month as a positive uptrend; the trend also breaks if I stop trading. I'm definitely over the swings I've had prior to sizing my position and risk down where I'd be up a fair amount one day then down a good amount the next, continuously resulting in an even P&L balance. What I need is a trend that moves in one definitive direction so I can make a decision whether or not this career is still worth pursuing. I love the challenge of it but it needs to produce results. I have been hitting my targets and executing my trading plans almost without error all month long, which is a HUGE win for me. My mental battle of continuing to trade knowing I may break trend is just my current battle to overcome.

02.20.20 $TVIX

Today was really a non-event day for me. I couldn't fall asleep last night to save my life and only slept a few hours until I was supposed to get up. I gave it a shot but was just too run down to focus so I ended up going back to bed for a bit and skipping the morning session. When I got logged in I saw the S&P 500 sold off out of nowhere so I checked into that and found out some report on the Coronavirus gave negative news regarding the spread. I waited for an opening and got long $TVIX, while keeping an eye on the $SPY. I got my first piece off but shortly thereafter the $SPY put in a recovery sign (as it does) and appeared to start consolidating into a bear flag. My read on it was that it wasn't consolidating into a bear flag but was actually consolidating to recover the sell off and the day, so when my position in $TVIX showed weakness I sold it off and closed my position. Kept the trade profitable and although it ended up putting in a new high, it barely missed my second take profit target. I would have been out of this trade with marginal gains regardless. I'd really like to close this week strong so tonight I'm hitting the Melatonin so I can (hopefully) pass out and get a good night sleep.

02.19.20 $UBER (x2)

This morning was frustrating, to say the least. I really liked the setup on $UBER from the daily chart and once it put in a new high of day on increased volume, after consolidating in a pendant and breaking through what I was reading as a triple top in the morning session, I felt strongly we'd start making a move back up toward $41.50. I waited for the pull back and got long with my stop below the trade line and below all three levels of support from the pendant/triple top. Immediately after getting long we broke down and I was stopped out for a loss. To add to my frustration, a surge of volume came in and the ask started getting bought up right from my stop, to the penny. That surge in volume pushed the price back up to my original entry (from before I stopped out). I had to reset and think, do I take the loss on the day or hit it again?

I hit it again and put my stop one cent below where I had it before, confident my theory was right and I only got sniped by luck of the draw. The surge in volume that took out the red candle I lost on was my signal. I got long and took my first profit a little sooner than planned in my original trade but I needed to clear 25% of my position in front of the high of day. To compensate, I extended my second take profit a little beyond where I initially planned then took my final piece out as planned at $41.09. Had the stock been cranking I would have held on beyond $41.09 but the extensions higher were getting smaller and smaller from my point of entry and volume on each push was decreasing. Super stoked on turning my losing day to a winning day. 

02.12.20 $GNPX and $SPCE

I made 2 trades today and stopped out on both. $GNPX was a nice setup with a pull back into the initial morning high and that's where I got long. I was looking for the tradeline, VWAP, the 38.2 fib, and the initial morning high to hold me up then looking to push to a new high of day. We had good volume on the initial push to the high of day through the initial morning high and light volume on the pull back but it was a failed attempt. I'd take this trade again if it were in front of me and remains my number one setup.

My second trade was $SPCE and was a pretty good setup but not as good as $GNPX. we gapped up this morning to a new high again and instead of getting long in front of the initial morning high, I got long in front of the second morning high. Still a good entry and trade but not an A+ setup. Realistically, I shouldn't have been in this trade even though it was a valid setup. I was watching it hover the initial morning high so if it wasn't good enough to take a position at that point, what made it good enough to take in a secondary setup? Nothing. I should have had the first setup or nothing at all on this one. My theory on this trade was that shorts started piling in this morning when it was hovering the morning high and there'd be a new wave to start closing their position to increase price and push it up. My theory was right but only applied to the initial setup. By the time I was in the trade serious short sellers stepped in and got me.

There were a couple trades I wish I would have taken but hindsight isn't going to do me any good. I liked $UBER over the high of day in the afternoon session. $SPCE made a really nice bounce off yesterday's high this afternoon as well, which I was expecting but wasn't in the mood to take. I had two duds on the day already and have been fighting a headache all day. No need to add to my discomfort if I'm wrong. I can swallow today's loss but tonight I need to make sure I get better sleep than I have been so I can get back on the tear I've been on this month and bring in February green.

As an Aside, Berkshire Hathaway closed their $AAPL (Apple, Inc.) and $PSX (Philips 66) positions today and went long KR (Kroger). The stock gapped up on news of their position and is holding fairly well. I'm going to give it a couple days to see if it holds or drifts back into a better buy point for me, then I may take a position long and hang onto it as an investment rather than day-trade.

February 10-14, 2020: Week in Review

My intent at the beginning of the week was to journal everyday but I failed to do so. What I didn't fail to do was have the best week trading since I started. The momentum from the $BYND trade carried into this week and one trade after another I executed my plans perfectly. Not every trade worked out but even in those instances I executed my plan perfectly. A good trade isn't always a winning trade; a good trade occurs when the setup and risk are clearly identified and I stick to my plan. This week I need to make a point to journal each day, share the trades I took and why I took them. The reflection back on them will effect my future self in two ways: 1) if the trades are poor it gives me a chance to learn from my mistakes and study what I did wrong; 2) if my trades work it embeds a positive attitude and adds confidence. Both points encourage growth and growth is what I need to be successful.

02.07.20 $BYND

Today I made what I would consider one of, if not my best trades since I started trading intraday. I've been struggling to execute my trading plan for months and couldn't figure out why. I was comfortable losing the dollar amount I was risking but any time I got up in a trade and was profitable, my trading plan went out the window and I would take profit too soon. When trading in my paper account (fake trading) I have no issues at all. I switch to real money and I become a basket case.

A couple weeks ago I decided to size down to see if my position size might actually be the issue. This allows me to trade as though money isn't an issue while still trading real money and still having real risk involved. Sizing down created yet another issue, at least at first: because my position size and risk was so small, I was taking too many trades. I realized this last week. This week I feel like I really got into a good mindset, only initiated trades with quality setups, and stuck to my trading plans like glue, which beings me to today.

Today I wasn't sure what I was going to trade. Nothing looked very good from the bell except $BYND (Beyond Meat) and I've only traded it a couple times and got smoked each time. I decided I didn't care and brought it up on my main screen. It looked good and I was going to take a stab at it. It was showing strength so I marked out a couple levels: the most recent pivot high  on the daily chart at $114.15 and the second most recent pivot high at $130 (also on the daily chart). My target price was $123, the price at the opening bell when the stock was in a bull flag on the daily chart and failed. If the price could push through $114.15 on increasing volume then pull in to test this level, I'll get long in front of it. The price did exactly that and as it came down to test $114.15 I had support of VWAP with the trade line (9-EMA) coming up for additional support and the 50 fibinocci retracement level right there on top of $114.15. When I saw this level holding I got long at $115.38 with my first profit target through the break of the current high of day ($116.88). We broke through $116.88 and I took 25% of my position off the table at $117.14. I didn't like how quickly $116.88 was tested but we did push through the previous high of day on the highest volume of the day - no need for immediate concern. Price action was struggling to move higher so I thought I should get some more off the table; second take profit at $119.37.  We tried pushing higher but failed and price moved in yet again to test $116.88. This is where I wish I would have done something different.

When the price came back in to test $116.88 and held, I should have added back to my position and didn't. It was the perfect opportunity to take a position essentially risk free (if I was wrong I'd be giving up what I just made and break even on the trade). Anyhow, $116.88 held and eventually we put in another high of day but off a weak extension through the previous high. Because we didn't get a lengthy extension with high volume, I took another 10% of my position off the table, leaving me with 15% of my original position left trading. I still thought we had a chance to see $123 but it was lunch at this point. 9:00 AM - 11:00 AM PST volume dries up and trades can't be trusted. Eventually, my stop was broken and I sold out of my final piece of the position at $116.50 at 11:00 AM, just as we were coming out of lunch.

Easily my best managed trade in a long time and a great way to close the week.