Tuesday, April 03, 2007

April 3 Trade summary

Trade Summary-
I traded the first 2 hours today, like I normally do. I was short on YM 2min before a housing report came out, (a report I was unaware of coming out) and it ended up putting me in the red by a considerable amount due to the fact that I haven't been using stops. Although I was down about 30-40pts in only a few minutes, through correct position sizing, I was able to come out ahead today. All of my trades were short trades believe it or not. I'm surprised I didn't feel any anxiety today from having the pressure in the back of my mind of trying to fight back to get in the black on YM. I probably made more money today then I would have because I felt compelled to turn my P/L on YM positive. You'll notice I take a lot of my initial positions on YM. I normally do this because I may have less confidence in a trade, but want to get a feel for the market before entering trades on the riskier ER2 contract. I didn't look at my P/L today, but know that I came out positive.

Bad things today-
1. I had a position on before big news came out.(I didn't see it on my calendar, so was unaware of the news pending, however I should have listened to CNBC)
2. I know my second short trade on YM at 12556 was bad and that I shouldn't have entered on a tick low and I should have exited when the trade went against me within the first few minutes. I knew the pop was coming and failed to exit in time.

Good things today-
1. Used good position sizing to turn bad trades into winners.

Market observations-
Watching ZN and the Euro helped a little today, but my confidence in taking short trades was from watching NYSE A/D and NYSE TICK. Crude Oil took a dive today but XLE has been going up all day which is pretty bullish for the stock market. Also we've got new highs on several of the stock indices around the world. Also gold looks like it may have shot up off of comments from President Bush. Volatility looks to be declining and the market is starting to chop, so I'm done for the day.

I'm reflecting back on the day and regreting that I should have reversed all of my short positions once I covered them and went long, because there was easy money to be made on those reversals. I timed the short entries and exits pretty well, but failed to reverse and stay in the wave of the market. I think the only thing still holding me back from flipping positions and staying in the wave is experience. If I exit a short trade, I do so because I think the price is going to reverse, if you think the price is going to reverse then you should reverse your position as well as long as there is plenty volatility to keep the markets moving. In order to help coach myself with this trading weakness I'm going to be making audible alerts with my own voice asking the question "should you reverse position". I also need to start using my audible alerts for NYSE TICK extremes again, which should help me stay focused.

Links I'm reading-
TraderMike on position sizing.
GreenTraderTax for information on Taxes for traders.


andyoyellow on 10:01 AM said...

hi, new to your blog, came here from TraderFeed. was just wondering if you had a post about what your acronyms meant such as YM, ER, etc. thanks

HPT on 10:54 AM said...

YM is dow jones futures contract, ER2 is russell 2000 futures contract, ES is SP 500 futues contract. ZN is 10 year note futures contract.

Ryan on 5:07 AM said...


I'm struggling with the same thing regarding reversing positions. In fact, it seems like everytime I realize something I'm struggling with, you post something the next day about the same stuggle and how you are dealing with it. Keep up the good work.


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