Friday, March 09, 2007

March 9th 2007 trading summary




Well, if I had taken my signals that I've designed I would have made a lot more money today. I really really need to work on this. I actually went short when I got a long signal from my indicator, and guess what happened, ER2 rallied against my short, just like my indicator predicted. First mistake of the day was by entering a short when we weren't above VAH. So, I added to the short at VAH and things rolled over and I made some profit. That's all fine and dandy but I missed out on the big picture. I could have made 5x as much money if I had stayed focused after booking my first profit for the day. Instead I was thinking that since I made a decent profit for the day that I should just quit for the day and be thankful for what I made since it was hard to make to begin with. Well, I was still in the trading zone, and I should have shorted again after the short covering pop, but instead I sat back and watched and placed the trades in my head. In the afternoon I gained some courage and realized that I should be more active and try to take my signals. So I went long on the 3pm reversal and got a little extra profit; however the trade took 1pt of heat and all I was thinking in the back of my head was how much it was going to suck if I lost all my profit for the day on this trade. I initially put in a 1pt stop, but canceled it because things were choppy and I knew that the shorts would cover as soon as the large ask at 782.7 was taken out, and that it was only a matter of time because the other indices and sectors were growing strength to the upside. I'm not sure why ER2 popped 3 pts in the final 2 minutes of trading, just another reason why I like to be done trading by 3:30pm EST.

Edit: OOPS, I traded the march contract today which is going to expire, and I just now noticed the June contract had 3x as much volume today. I was watching each day to see which contract had more volume, and I guess the majority of traders rolled over to the new contract today or yesterday. I was wondering why the volume bars on ES, ZN, ZF, and ER2 started looking messed up.

What I messed up on today was:
1.Didn't listen to signals
2.Didn't use 0.7pt stop on my "gut feeling trade"
3.Stopped trading after I got a good profit, only to miss the best move there after which would have profited me 5x as much money.
4.Became impatient and moved profit targets to "just exit the trade for a profit before it reverses again", when both times my profit targets would have been hit, which would have given me 1/3 more profits.
5.Didn't watch NQ or SMH for divergences between ER2
6.Watched Citigroup too much instead of ER2

What I did right:
1.I shorted near the VAH
2.I waited before adding to my loser short instead of getting angry and adding to it a few minutes later.(I should have cut the short altogether, eventually I'll get better)
3.I bought the 3pm reversal and held it even though I felt like the trade should have worked sooner.

Interesting things noticed today:
1.All of the market breadth indicators for all the exchanges do not help me except NYSE TICK and NYSE Advance/Declining issues.
*I noticed something new on NYSE A/D today, which was market volatility spikes and reversals occured when the NYSE A/D penetrated a support/resistance zone.(See the chart below)

Here's the chart of my new strategy called: Nyse advance/decline mid-day breakout fade strategy.


For the week, I did good overall-
Things I need to work on:
1.Trade your signals according to your volume profile methodology.
2.Trade more actively.
3.Pay attention to your ER2 chart, and don't make trading decisions based off of something you see happening in one individual stock.
4.Keep your profit targets.

Things I accomplished this week:
1.I found a new NYSE A/D strategy.
2.I made a new indicator that is good at picking tops and bottoms and refined my ER2 chart setup even more to my liking.
3.I made 3 videos which I will get to review to practice on.
4.I made money.

Things to do this Weekend-
1.Review recordings
2.Refine charts
3.Look at NYSE A/D strategy
4.Look at first hour of trading volume spikes in relation to volume profile
5.Make audible paintbar alerts for my trading signals

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