Monday, April 23, 2007

April 23 Trade Summary

I used the NYSE A/D and NYSE TICK to leverage myself into a short setup that was my big winner for the day. My goal is to find one good setup per day where I can use increased size with a profit target of 0.7-1.4 pts when trading ER2.

P/L= $402

This weekend I reviewed some of my recordings and noticed some good things that will help me in my trading. I noticed that I'm missing out on making more money because my trading execution platform was limiting my abilities. I have been trading from the basic IB order entry page, which is a really slow way to make trades if your looking to make your money by scalping. I was watching some of my videos and some of the ninja trader instruction videos and realized that I'm missing a lot of trade signals by not having a trading execution system that is fast enough to take my trades. So, today I started trading from IB's Book Trader, which with a single click, will execute my trade within a second. I missed about 3 scalp trades this morning from being to greedy in waiting for my entry to get hit. I was trying to sell the ask when the price was on the bid, and buy the bid when the price was on the ask. With time I should get better.

My motivation to start scalping more is from reading an old chat transcript posted over at Linda's Rascke's website. The chat transrcipt was an interview with trading coach Jeff Quinto from Photon Trading. He said that he tells his new traders to make many scalp trades and to look for 3-6 ticks as a profit target and to stratch the majority of trades. Doing this will give the trader more exposure and experience in the markets and should help that trader in their execution skills. This is also something that Dr. Steenbarger; from TraderFeed, talks about in his new book "Enhancing Trader Performance". The chat talked about when you should PRESS trades, by adding to winning core positions, and that he never adds to losers. If he has a loser he cuts it, because something has happened that he didn't expect and he doesn't know why, so he exits the losing trade. I also like how he went over the time frame he holds his trades. He said that he holds winners for an average of 6-7 minutes and 3 minutes for losing trades. This is interesting because my winning trades normally last 3-6minutes, and my losing trades normally last longer than 3min, sometimes 15min from averaging into the loser, so this is something I need to work on. I need to start looking to cut my losers as soon as they are a few ticks against me, or after 3minutes when scalping. To checkout the chat transript checkout Linda Raschke's website.

Here is my new monitor setup showing Book Trader for ER2 and YM along with all my other charts that I use to trade with.

Market Observations-

I missed the big move in ZN, I saw the setup and didn't take it. I was skeptical because there was light volume between 7:30-7:40am, and I was expecting a pullback, but it never happened and the trend continued. O'well, at least I'm getting better at my intraday analysis on ZN. I guess I should have gone long on JPY if I was afraid of the higher risk trading ZN.

Tommorow should be interesting with these key #'s out tommorow:

07:45 ICSC-UBS Store Sales
08:55 Redbook
09:00 Bank of Canada Announcement
10:00 Consumer Confidence
10:00 Existing Home Sales
01:00 5-Year TIPS Auction
01:00 4-Week Bill Auction

The weather out here in Cali is looking beautiful, so I'm going to enjoy it. Have a good day ya'll.


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